Select Comfort Doesn't Let the Bedbugs Bite: Fool by Numbers

• Email
• Share
• Print

On April 25, Sleep Number bed creator Select Comfort (Nasdaq: SCSS) released first-quarter earnings for the period ended March 31.

• Despite an 11% decrease in same-store sales, revenue grew marginally with the help of new store openings.
• The implementation of a hub-and-spoke logistics network improved margins.
• The board of directors authorized a $250 million stock repurchase program.
• It looks as if the CAPS community prefers a good night's sleep on a Select Comfort bed; the company has a four-star rating, while rival Sealy Corporation (NYSE: ZZ) gets just one star.

(Figures in millions, except per-share data)

Income Statement Highlights

	Q1 2007	Q1 2006	Change
Sales	$216.5	$212.3	2.0%
Net Profit	$10.7	$11.7	(9.0%)
EPS	$0.21	$0.21	0.0%
Diluted Shares	51.8	56.5	(8.3%)

Get back to basics with the income statement.

Margin Checkup

	Q1 2007	Q1 2006	Change*
Gross Margin	62.0%	60.1%	1.9
Operating Margin	7.8%	8.6%	(0.8)
Net Margin	4.9%	5.5%	(0.6)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets	Q1 2007	Q1 2006	Change
Cash + ST Invest.	$36.0	$41.4	(12.9%)
Accounts Rec.	$14.5	$13.4	8.2%
Inventory	$25.0	$22.2	12.8%

Liabilities	Q1 2007	Q1 2006	Change
Accounts Payable	$57.0	$38.5	48.2%
Long-Term Debt	$0.0	$0.0	N/A

The balance sheet reflects the company's health.

Cash Flow Highlights

	Q1 2007	Q1 2006	Change
Cash From Ops.	$27.5	$9.7	184.5%
Capital Expenditures	$8.4	$6.6	26.9%
Free Cash Flow	$19.1	$3.1	524.6%

Free cash flow is a Fool's best friend.

Related Foolishness:

• Counting Cheap at Select Comfort
• Select Comfort vs. Under Armour: Select Comfort
• The Best Retail Stock for 2007: Select Comfort

Select Comfort has been recommended by the Motley Fool Hidden Gems team. Get the newest small-cap stock pick (and access to all previous selections) with a 30-day free trial.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.