Can Select Comfort Meet These Numbers?

Select Comfort (Nasdaq: SCSS  ) is expected to report Q3 earnings on Oct. 17. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Select Comfort's revenues will grow 22.8% and EPS will grow 32.3%.

The average estimate for revenue is $245.2 million. On the bottom line, the average EPS estimate is $0.41.

Revenue details
Last quarter, Select Comfort notched revenue of $205.2 million. GAAP reported sales were 27% higher than the prior-year quarter's $161.5 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Last quarter, EPS came in at $0.30. GAAP EPS of $0.30 for Q2 were 50% higher than the prior-year quarter's $0.20 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Recent performance
For the preceding quarter, gross margin was 64.1%, 60 basis points better than the prior-year quarter. Operating margin was 12.6%, 170 basis points better than the prior-year quarter. Net margin was 8.3%, 130 basis points better than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $944.5 million. The average EPS estimate is $1.47.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 2,501 members out of 2,841 rating the stock outperform, and 340 members rating it underperform. Among 911 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 839 give Select Comfort a green thumbs-up, and 72 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Select Comfort is outperform, with an average price target of $38.63.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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