Select Comfort Soars Most in a Year on Profit Forecast

Select Comfort Corp. (SCSS), the maker of Sleep Number adjustable beds, advanced the most in more than a year after raising its full-year profit forecast.

The shares gained 27 percent to $27.60 at the close in New York, the biggest jump since April 21, 2011. Select Comfort, based in Plymouth, Minnesota, had risen less than 1 percent this year through yesterday.

Select Comfort, which is looking to boost annual revenue by 38 percent to $1.5 billion in 2015, reported second-quarter earnings and sales that topped analysts’ estimates. The company plans to increase its number of stores by as much as 8 percent this year to 412, according to a statement yesterday.

The company “saw no impact from competitor price promotions and product introductions that have elevated concerns on Select Comfort’s shares since early May,” Peter Keith, a New York-based analyst for Piper Jaffray Cos., wrote in an investor note today.

Keith, who rates the shares overweight, said the increase in the annual profit forecast “now looks conservative.”

Full-year earnings per share will be $1.35 to $1.41, up from a prior forecast of $1.32 to $1.40, the company said in the statement. The average analyst estimate was $1.39, according to data compiled by Bloomberg.

Second-quarter net income rose 50 percent to $17 million, or 30 cents a share, from $11.3 million, or 20 cents, a year earlier. Analysts had estimated 27 cents.

Revenue increased 27 percent to $205 million from $161 million. The average estimate was $197.6 million.

To contact the reporter on this story: Niamh Ring in New York at nring@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net SCSS US <Equity> CN

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.