Why Select Comfort Shares Sank


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Select Comfort plummeted 15% today after the specialty mattress retailer warned that it experienced worse-than-expected sales in February.

So what: The disappointing news reinforces serious concerns over the headwinds facing Select Comfort and its growth prospects going forward. While the company is certainly healthier than it was a few years ago, still-subdued consumer spending, coupled with increasingly intense competition from the likes of Mattress Firm Holding and Tempur-Pedic International , continues to weigh heavily on results.

Now what: Due to the weakness in February, management thinks it will likely miss its internal goals for the first quarter. "We believe this is a short-term issue associated with accelerated changes made to our media-buying strategy, and we are making the necessary corrections to both media buying and near-term expenses," said CEO Shelly Ibach. "We remain confident in our growth formula and are committed to our strategy of delivering an unparalleled sleep experience for our customers." With the stock hitting a new 52-week low today and trading at a forward P/E of 8, buying into that turnaround talk might even be worth considering.

Interested in more info Select Comfort?Add it to your watchlist.

The article Why Select Comfort Shares Sank originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool owns shares of Tempur-Pedic International. 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.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.