Select Comfort plunges on Q4 sales warning
Select Comfort Corp. (Nasdaq: SCSS) shares are plunging after the maker of the Sleep Number Bed said after Wednesday’s close that it expects fourth-quarter sales below expectations.
In a conference call, CFO Jim Raabe said fourth-quarter sales “will fall short of previous guidance.”
“We expect difficult sales trends to continue into 2008 and are adjusting costs and pricing to ensure room for continued investment in growth,” Raabe said. “Our focus for 2008 is to stabilize profits and maximize cash generation, while selectively investing in opportunities to restore same-store growth and the company’s competitive advantages.”
Raabe said the Minneapolis, Minn.-based firm projects a year-over-year decline, due to sales that have declined since Thanksgiving weekend. In October, the company projected 2007 sales in the range of $820 million to $830 million and earnings of between $0.75 and $0.81 per share.
In response to rising costs, he said the company is raising prices in January.
“We are extremely disappointed in our operating performance this past year. At the same time, we remain confident in our ability to return the company to sales and profit growth,” he said. “As we have done before, we are taking the deliberate steps required to stabilize the business and to invest selectively in the future.”
In response to the fourth-quarter sales warning, brokerage firm Northland Securities downgraded the company to “market perform” from “outperform.”
In morning trading, SCSS shares are down 22.32%, or $2.25, at $7.83. Over the last 52 weeks, shares have ranged from $7.78 to $20.17.
