Select Comfort Beats on Both Top and Bottom Lines

Seth Jayson, The Motley Fool
Updated

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

The 10-second takeaway
For the quarter ended June 30 (Q2), Select Comfort beat expectations on revenues and beat expectations on earnings per share.

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


Margins increased across the board.

Revenue details
Select Comfort logged revenue of $205.2 million. The eight analysts polled by S&P Capital IQ predicted a top line of $196.0 million on the same basis. GAAP reported sales were 27% higher than the prior-year quarter's $161.5 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
EPS came in at $0.30. The eight earnings estimates compiled by S&P Capital IQ anticipated $0.27 per share. GAAP EPS of $0.30 for Q2 were 50% higher than the prior-year quarter's $0.20 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 64.1%, 60 basis points better than the prior-year quarter. Operating margin was 12.6%, 170 basis points better than the prior-year quarter. Net margin was 8.3%, 130 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $240.1 million. On the bottom line, the average EPS estimate is $0.40.

Next year's average estimate for revenue is $929.4 million. The average EPS estimate is $1.44.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 2,507 members rating the stock outperform and 339 members rating it underperform. Among 854 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 772 give Select Comfort a green thumbs-up, and 82 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Select Comfort is buy, with an average price target of $38.63.

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The article Select Comfort Beats on Both Top and Bottom Lines originally appeared on Fool.com.

Seth Jaysonhad no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is the 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 don't 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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