UPDATE: Select Comfort Corp (SCSS) Misses Q1 EPS by 2c; Cuts FY13 EPS Outlook

(Updated - April 17, 2013 4:11 PM EDT)

Select Comfort Corp (Nasdaq: SCSS) reported Q1 EPS of $0.41, $0.02 worse than the analyst estimate of $0.43. Revenue for the quarter came in at $258 million versus the consensus estimate of $287.95 million.

Sales and EPS compare with $262.38 million and $0.45 reported in the same period last year.

Certain financial highlights from the quarter:

• Company-controlled comparable sales declined 9% year-over-year.
  
• Operating income, adjusted both years for the non-cash impact of the 2012 chief executive officer (CEO) transition, decreased to $34.8 million, compared with $39.9 million in the first quarter of
• 2012. As a percentage of net sales, adjusted operating income was 13.5% compared to 15.2% in the first quarter of 2012.
  
• The 170 basis-point, year-over-year decrease in adjusted operating margin included a 200 basis-point increase in sales and marketing expenses and a 50 basis-point increase in research and development expenses, partially offset by a 70 basis-point improvement in gross margin and a 20 basis-point decrease in general and administrative (G&A) expenses.

"As reported in early March, changes to our media buying negatively impacted traffic and sales, resulting in first-quarter underperformance. We took decisive action to correct the issue and are making steady progress against a backdrop of soft industry performance,” said CEO Shelly Ibach. “During the quarter, we progressed as planned in the other key areas of our customer-focused growth strategy, specifically exclusive distribution and product innovation.”

Sees FY2013 EPS of $1.30 - $1.45, versus prior guidance of $1.65 - $1.80 and the consensus of $1.52. The company currently anticipates that 2013 capital expenditures will be $70 million to $80 million, reflecting continued investment in new stores, relocated and remodeled stores, and customer-management systems, along with new investments in product innovation.

For earnings history and earnings-related data on Select Comfort Corp (SCSS) click here.

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