The 10-second takeaway
For the quarter ended Sep. 29 (Q3), Select Comfort met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share increased significantly.
Margins expanded across the board.
Select Comfort notched revenue of $246.8 million. The 10 analysts polled by S&P Capital IQ wanted to see revenue of $245.2 million on the same basis. GAAP reported sales were 24% higher than the prior-year quarter's $199.6 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.46. The 10 earnings estimates compiled by S&P Capital IQ predicted $0.41 per share. GAAP EPS of $0.46 for Q3 were 48% higher than the prior-year quarter's $0.31 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 65.1%, 210 basis points better than the prior-year quarter. Operating margin was 16.3%, 300 basis points better than the prior-year quarter. Net margin was 10.6%, 200 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $228.3 million. On the bottom line, the average EPS estimate is $0.32.
Next year's average estimate for revenue is $939.2 million. The average EPS estimate is $1.53.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 2,499 members out of 2,840 rating the stock outperform, and 341 members rating it underperform. Among 909 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 835 give Select Comfort a green thumbs-up, and 74 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 $36.00.
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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.