Select Comfort shares plunge after cutting outlook

MINNEAPOLIS (AP) -- Shares of Select Comfort Corp. plunged in after-hours trading Wednesday, after the mattress retailer posted a 23 percent drop in third-quarter profit and slashed its full-year outlook, citing the uncertain economy.

The Minneapolis company said its net income fell to $20.3 million, or 36 cents per share, for the three months ending Sept. 28. That compares with $26.2 million, or 46 cents per share, in the 2012 third quarter.

Revenue rose 7 percent to $263.7 million, from $246.8 million a year ago.

Analysts, on average, expected earnings of 43 cents per share, on revenue of $277.5 million, according to FactSet.

Sales at company-controlled stores open at least a year fell 1 percent. The figure is a key gauge of a retailer's health, because it strips out recently opened or closed stores and measures growth at ongoing locations. Select Comfort sells its mattresses and bedding products at about 400 Sleep Number stores around the country and online.

Because of challenging economic conditions, Select Comfort is "actively managing costs across the company," said Shelly Ibach, the retailer's president and CEO. Operating expenses rose almost 13 percent.

The company cut its full-year outlook to $1.14 per share and $1.22 per share, from its previous expectations of $1.30 per share and $1.45 per share. Analysts were forecasting earnings of $1.33 per share, with estimates ranging from $1.23 to $1.42.

For the fourth quarter, Select Comfort expects earnings of 18 cents per share to 26 cents per share. Analysts expect 31 cents per share, according to FactSet.

Shares of Select Comfort fell $5.70, or 24 percent, to $18.50 in after-hours trading follow the results. The stock closed the regular session down 49 cents, or 2 percent, at $24.20.