Select Comfort's '03 sales surge 36.5% to $458.5 million
By Larry Thomas -- Furniture Today, February 23, 2004
MINNEAPOLIS — MINNEAPOLIS — Buoyed by substantial gains at its 344 company-owned stores, Select Comfort said sales jumped more than 36% in 2003.
The company, which makes and sells the Sleep Number airbed, said the gain included same-store sales growth of 31%. And that figure came on the heels of a 27% same-store sales jump in 2002.
"It was another exceptional year in terms of executing our core growth initiatives in sales, profit and innovation," said President and CEO Bill McLaughlin.
Sales for the year totaled $458.5 million, up from $335.8 million in 2002. Net income fell by nearly 28% to $27.3 million, or 69 cents per share.
For the fourth quarter, however, net income rose by 42.4% to $11.1 million. It was the once-troubled company's 10th consecutive quarterly profit.
Fourth-quarter sales leaped 48.6% to $137.1 million, a figure boosted by a 28% jump in same-store sales.
During a conference call with securities analysts, McLaughlin said sales growth was fueled by some $60 million worth of national and local advertising. The national ads boosted brand awareness, while local efforts drove consumers into stores, he said.
And he said the pump priming wouldn't stop there. Select Comfort plans to spend at least $80 million on advertising in 2004, including intensive local efforts in 13 markets.
"This is our most aggressive local market expansion to date," he said. "We have a small share of the national market, but a much higher share of local markets (where we have stores.)"
He told analysts the company plans to open 25 to 30 stores this year, including several in the New York and Los Angeles markets. The expansion will be funded with internally generated cash.
Jim Rabe, chief financial officer, said sales should increase another 20% to 25% this year, bringing the total to $550 million to $580 million. He predicted that same-store sales will increase 15% to 22%.
| Select Comfort | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 1/3 | 2004 | 2003 | Change |
| Sales | $137,138,000 | $92,263,000 | 48.6% |
| Operating income | 16,981,000 | 8,836,000 | 92.2% |
| Net income | (a)11,056,000 | (b)7,765,000 | 42.4% |
| Earnings per share (c) | 0.28 | 0.21 | 33.3% |
| Year ended 1/3 | 2004 | 2003 | Change |
| Sales | $458,489,000 | $335,795,000 | 36.5% |
| Operating income | 42,774,000 | 21,255,000 | 101.2% |
| Net income | (a)27,253,000 | (b)37,685,000 | (27.7%) |
| Earnings per share (c) | 0.69 | 1.09 | (36.7%) |
| (a) Includes pretax charges for store closings and asset impairments of $4,000 in the 2004 quarter and $71,000 in the 2004 year. The 2004 year also includes $81,000 in interest expense on convertible debt. (b) After interest expense on convertible debt of $54,000 in the 2003 quarter and $563,000 in the 2003 year; includes a $380,000 extraordinary loss in both periods on the early extinguishment of debt. The 2003 year also includes a $233,000 pretax charge for store closings and asset impairments and a $17.8 million income tax benefit. (c) Based on average shares outstanding of 39.9 million in the 2004 quarter, 36.6 million in the 2003 quarter, 39.3 million in the 2004 year and 34.5 million in the 2003 year. | |||
