The 10-second takeaway
For the quarter ended March 31 (Q1), Select Comfort beat expectations on revenues and earnings per share.
Compared to the prior-year quarter, revenue expanded significantly and GAAP earnings per share increased significantly.
Margins dropped across the board.
Select Comfort logged revenue of $262.4 million. The eight analysts polled by S&P Capital IQ expected sales of $235.7 million on the same basis. GAAP reported sales were 36% higher than the prior-year quarter's $193.1 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $0.45. The eight earnings estimates compiled by S&P Capital IQ averaged $0.41 per share on the same basis. GAAP EPS of $0.39 for Q1 were 30% higher than the prior-year quarter's $0.30 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 62.6%, 120 basis points worse than the prior-year quarter. Operating margin was 13.1%, 60 basis points worse than the prior-year quarter. Net margin was 8.5%, 10 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $194.2 million. On the bottom line, the average EPS estimate is $0.28.
Next year's average estimate for revenue is $895.8 million. The average EPS estimate is $1.40.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 2,514 members out of 2,852 rating the stock outperform, and 338 members rating it underperform. Among 978 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 901 give Select Comfort a green thumbs-up, and 77 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 $34.
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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. 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.