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Select Comfort Reiterates 2013 Guidance

Zacks Equity Research

Mattress retailer, Select Comfort Corporation (SCSS), reiterated its outlook for 2013, which it had trimmed at the time of the announcement of third-quarter 2013 results on Oct 16, 2013.

The company now maintains its full-year 2013 GAAP earnings guidance in the range of $1.14–$1.22 per share. It also reaffirmed the fourth-quarter earnings projection of 18–26 cents a share. Net sales are still expected to grow at a low double-digit rate during the final quarter.

This manufacturer of premium quality, innovative adjustable-firmness beds and other sleep-related products had anticipated comparable-store sales to grow in the mid single-digits.

Select Comfort reported third-quarter earnings per share of 36 cents, which came below the Zacks Consensus Estimate of 42 cents and fell 21.7% from the year-ago quarter. Tough macroeconomic conditions, higher costs and lower-than-expected sales were the primary factors behind the dismal performance. Consequently, the company lowered its full-year earnings guidance. (Please Read: Select Comfort Misses Earnings, Guides Low).

A downtrend was triggered in the Zacks Consensus Estimate following the company’s lower-than-anticipated results and truncated guidance. This is evident from the movement witnessed in the Zacks Consensus Estimate that dropped 12.1% to $1.16 for 2013 and 15.7% to $1.40 per share for 2014 in the past 30 days.

With the Zacks Consensus Estimate for both 2013 and 2014 going down, the company now has a Zacks Rank #5 (Strong Sell).

Other stocks that are worth considering  include Hanesbrands Inc. (HBI), Best Buy Co., Inc. (BBY) and Five Below, Inc. (FIVE). While Hanesbrands and Best Buy carry a Zacks Rank #1 (Strong Buy), Five Below has a Zacks Rank #2 (Buy).

Read the Full Research Report on BBY
Read the Full Research Report on HBI
Read the Full Research Report on SCSS
Read the Full Research Report on FIVE

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