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Select Comfort (SCSS) to Post Q1 Earnings: What's in Store?

Zacks Equity Research

Select Comfort Corporation SCSS is slated to report first-quarter 2017 results on Apr 19, after the closing bell. In the previous quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 21.9%.

Notably, the company’s earnings have surpassed the Zacks Consensus Estimate in two out of the trailing four quarters, with an average beat of 52.9%. Let’s see how things are shaping up prior to this announcement.

What to Expect?

The question lingering in investors’ minds now is whether Select Comfort will be able to post positive earnings surprise in the quarter to be reported. The current Zacks Consensus Estimate for the quarter under review is 46 cents, reflecting a year-over-year increase of more than 68%. We note that the Zacks Consensus Estimate has been witnessed upward revisions in the past 7 days. Analysts polled by Zacks expect revenues of $370 million, in comparison with $353 million reported in the prior-year quarter.

We note that the stock has outperformed the Zacks categorized Furniture market industry and the S&P 500 in the past three months. The company’s shares have gained 21.9%, while the Zacks categorized industry has gained 10.1% in the past three months. Meanwhile, the S&P 500 has increased 2.9%.

Factors at Play

Following the completion of its multi-year transformation in 2016, the Select Comfort has fortified consumer innovation leadership as well as competitive advantages. The company has 550 Sleep Number stores countrywide. In 2017, the company anticipates minimum of four to five points of sales growth from new stores, while comps are expected to increase by low-single digit.

In 2017, the company expects earnings per share in the range of $1.20 to $1.40, which includes 15 cents to 22 cents increase in costs due to the launch of fresh Sleep Number 360 smart bed line as well as owing to the redesign of logistics network.

What Does the Zacks Model Unveil?

Our proven model does not conclusively show that Select Comfort is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Select Comfort has an Earnings ESP of -4.35% as the Most Accurate estimate stands at 44 cents, while the Zacks Consensus Estimate is pegged higher at 46 cents. Although, the company’s Zacks Rank #3 increases the predictive power of ESP, we need to have a positive ESP to be confident about an earnings surprise.

Select Comfort Corporation Price, Consensus and EPS Surprise


Select Comfort Corporation Price, Consensus and EPS Surprise | Select Comfort Corporation Quote

Stocks Poised to Beat Earnings Estimates

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Newell Brands Inc. NWL has an Earnings ESP of +13.79% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Energizer Holdings, Inc. ENR has an Earnings ESP of +3.03% and a Zacks Rank #2.

J. C. Penney Company, Inc. JCP has an Earnings ESP of +100.00% and a Zacks Rank #3.

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