Select Comfort's sales shoot up 33% in 4th qtr.
By Furniture Today Staff -- Furniture Today, February 10, 2003
Minneapolis — Buoyed by a 38% jump in same-store sales from its retail operations, Select Comfort recorded its sixth straight quarterly profit.
The company, the nation's biggest manufacturer and retailer of air beds, said total fourth-quarter sales shot up 33%, and sales for all of 2002 rose 28%.
Fourth-quarter net income was $7.7 million, compared with $1.1 million in the fourth quarter of 2001. For the full year, net income totaled $37.1 million, compared with a loss of $12.1 million in 2001.
"Our snowball has been formed and has been launched downhill," Select Comfort President Bill McLaughlin said during a conference call. "We knew that 2002 was a time to earn real profit and generate cash ... but we couldn't have predicted 28% (sales) growth and 27% same-store growth."
Sales for the year totaled $335.8 million, compared with $261.7 million in 2001.
In the fourth quarter, revenues were $92.3 million, compared with $69.3 million in the fourth quarter of 2001.
McLaughlin said growth was driven by a successful advertising and marketing effort that brought consumers into its 322 stores. The stores, which accounted for about 80% of last year's revenues, focused on selling a good night's sleep instead of a particular product or price point, he said.
Select Comfort will spend about $50 million on advertising in 2003, some $10 million more than in 2002, McLaughlin said. Much of this year's budget will be devoted to national cable TV ads, but that will be supplemented by local advertising in more than 100 markets where Select Comfort has stores.
"Every dollar we spend on advertising adds weight to the (brand) awareness created by previous investments," he said.
McLaughlin said 20 to 30 new stores are scheduled to open this year, and about 100 units will be remodeled.
| Select Comfort | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are loses or declines. | |||
| Quarter ended 12/28 | 2002 | 2001 | Change |
| (a) Includes a $380,000 extraordinary loss from the early extinguishment of debt in both periods. The 2002 year also includes a $233,000 pretax charge for store closings and asset impairments. (b) Includes pretax charges for store closings and asset impairments of $1.3 million in the 2001 quarter and $1.8 milion in the 2001 year. The 2001 quarter also includes a $115,000 income tax benefit. (c) Based on average shares outstanding of 36.6 million in the 2002 quarter, 30.9 million in the 2001 quarter, 34.5 million in the 2002 year and 18.2 million in the 2001 year. | |||
| Sales | $92,263,000 | $69,341,000 | 33.1% |
| Operating income | 8,836,000 | 2,977,000 | 196.8% |
| Net income | (a)7,711,000 | (b)1,065,000 | 624.0% |
| Earnings per share (c) | 0.21 | 0.04 | 425.0% |
| Year ended 12/28 | 2002 | 2001 | Change |
| Sales | $335,795,000 | $261,687,000 | 28.3% |
| Operating income | 21,255,000 | (8,776,000) | — |
| Net income | (a)37,122,000 | (b)(12,066,000) | — |
| Earnings per share (c) | 1.09 | (0.66) | — |
