Stock Buzz: Select Comfort Corporation (NASDAQ:SCSS)


Select Comfort Corporation (NASDAQ:SCSS) reported earnings for the three months ended March 2016 on April 28, 2016. The company earned $0.27 per share on revenue of $352.98M. Analysts had been modeling earning per share of $0.2 with $341.63M in revenue.

Select Comfort Corporation (SCSS) on April 28, 2016 reported first quarter 2016 results for the period ended April 2, 2016.

“We are pleased with our first quarter results, which were on track with our expectations. We have completed our ERP system implementation – the last piece of our transformation – and have returned to normalized customer service levels,” said Shelly Ibach, president and chief executive officer of Select Comfort. “The system is already improving our customer experience and we expect to realize operating efficiencies in the back half of this year. Our competitive advantages are stronger than they have ever been and we are now well positioned for accelerated long-term earnings growth.”

First Quarter Overview

Net sales increased 1% to $353 million, including a 4% comparable sales decline

Earnings per diluted share were $0.27, compared with $0.54 in the prior year’s quarter, including an estimated $0.25 impact from lost sales and inefficiencies related to our ERP implementation

Cash provided by operations of $64 million, up from $49 million in the prior year, funded the repurchase of $50 million of company stock (2.6 million shares) and $12 million of capital spending during the quarter

Financial Outlook

The company reiterates its outlook for 2016 earnings per diluted share of $1.25 to $1.45, compared with full-year 2015 earnings per diluted share of $0.97. The outlook assumes low-teen sales growth for the full year, with low single-digit growth in the first half of the year. Our 2016 outlook includes an estimated $0.30 earnings per share reduction related to the ERP transition (primarily in the first quarter), including $40 to $50 million of estimated sales impact. The outlook assumes a 10% increase in store count in 2016 and anticipates 2016 capital expenditures will be approximately $70 million. The outlook does not contemplate a worsening consumer spending environment.

Select Comfort Corporation earnings per share showed a decreasing trend of -22.7% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 169%.Analysts project EPS growth over the next 5 years at 11.45%. It has EPS annual growth over the past 5 fiscal years of 11.2% when sales grew 14.9. It reported 0.9% sales growth, and -50.8% EPS decline in the last quarter.

The stock is trading at $21.81, up 52.73% from 52-week low of $14.28. The stock trades down -29.53% from its peak of $30.95 and 6.79% above the consensus price target of $23.29. Its volume clocked up at 0.43 million shares which is lower than the average volume of 0.78 million shares. Its market capitalization currently stands at $1.02B.


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