SAN FRANCISCO (Thomson Financial) - Shares of Select Comfort tumbled
Thursday after the Minneapolis-based mattress company swung to a first-quarter
loss and sales fell 22% from the previous year.
After the close of trading Wednesday, Select Comfort reported a
first-quarter net loss of $7.13 million, or 16 cents a share, compared with net
income of $10.7 million, or 21 cents a share, in the first quarter of 2007.
The mean estimate of analysts polled by Thomson Reuters was for a per-share
profit of 9 cents.
Net sales for the quarter fell to $168.2 million from $216.5 million.
The company expects net losses to continue for the second quarter, with
earnings improving in the second half as "seasonally higher sales periods return
and the benefits of cost reduction initiatives and media spend begin to take
effect."
Stifel Nicolaus said the company's outlook for 2008 remains "challenging,"
and the broker now expects a second-quarter loss of 8 cents a share, wider than
its previous projection of a loss of 2 cents share. The broker expects a 2008
loss of 13 cents a share, down from its earlier forecast of earnings of 28
cents.
"We are not overly optimistic about the consumer and have no metrics on the
early effectiveness of the advertising campaign," the broker wrote in a note to
clients. "This makes it very difficult to assess the probability of a revenue
recovery, something that we believe needs to occur to stave off further
financial pressures."
Shares of Select Comfort fell 20.7& to $2.56 on volume of 871,300 versus a
30-day average volume of 612,609.
Gabriel Madway
gm/jw
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