Select Comfort Beats on Both Top and Bottom Lines

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Select Comfort (NAS: SCSS) reported earnings on April 18. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Select Comfort beat expectations on revenues and earnings per share.

Compared to the prior-year quarter, revenue expanded significantly and GAAP earnings per share increased significantly.


Margins dropped across the board.

Revenue details
Select Comfort logged revenue of $262.4 million. The eight analysts polled by S&P Capital IQ expected sales of $235.7 million on the same basis. GAAP reported sales were 36% higher than the prior-year quarter's $193.1 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $0.45. The eight earnings estimates compiled by S&P Capital IQ averaged $0.41 per share on the same basis. GAAP EPS of $0.39 for Q1 were 30% higher than the prior-year quarter's $0.30 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 62.6%, 120 basis points worse than the prior-year quarter. Operating margin was 13.1%, 60 basis points worse than the prior-year quarter. Net margin was 8.5%, 10 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $194.2 million. On the bottom line, the average EPS estimate is $0.28.

Next year's average estimate for revenue is $895.8 million. The average EPS estimate is $1.40.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 2,514 members out of 2,852 rating the stock outperform, and 338 members rating it underperform. Among 978 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 901 give Select Comfort a green thumbs-up, and 77 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Select Comfort is outperform, with an average price target of $34.

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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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