Select Comfort Soars Most in a Year on Profit Forecast

Select Comfort Corp., 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.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE