Select Comfort Profit Tops Estimate; Stock Up - Update

(RTTNews) - Mattress maker Select Comfort Corp (SCSS) Wednesday reported a decline in second-quarter profit, hurt mostly by weak margins that offset double-digit sales growth, with both earnings and revenue falling short of Wall Street estimates.

The company reiterated its earnings guidance for 2014 below consensus. Following the announcement, Select Comfort shares gained 9 percent in after-hours trade on the Nasdaq.

Minneapolis, Minnesota-based Select Comfort posted quarterly net income of $8.5 million or $0.16 per share, compared with $9.9 million or $0.18 per share last year.

On average, nine analysts polled by Thomson Reuters expected the company to earn $0.14 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the second quarter grew 13 percent to $234.8 million from $207.4 million a year ago. Analysts expected sales of $223.7 million for the quarter.

The quarter benefited from a 7 percent increase in company-controlled comparable sales.

Results were offset by gross margins that decreased to 60.7 percent from 63.4 percent last year, and operating margin to 5.4 percent from 7.3 percent. The company incurred more costs toward sales and general overheads.

For fiscal year 2014, the company continues to expect earnings of $1.07 per share, while analysts currently expect $1.10 per share.

SCSS closed Wednesday at $18.98, down $0.22 or 1.15%, on a volume of 2 million shares. In after hours, the stock gained $1.77 or 9.33%.