Monday January 6th, 2014 wasn't such a great day to own shares of Select Comfort (SNBR -7.05%), a provider of mattresses and other related products that fall under the Sleep Number name. After announcing preliminary results for the company's fourth quarter, shares dove 19.06% from $21.35 to $17.28, 4% above its 52-week low. After such a tremendous fall, shareholders and prospective shareholders might be wondering if the company could make for an attractive investment opportunity or if now is the ideal time to run for the exits.

Revenue was reasonable but earnings not so much
For the quarter, Select Comfort said that its revenue will come in at $231 million. This represents a 4.7% gain compared to the $220.6 million the company saw during the same quarter a year earlier, but fell short of the $242.6 million that Mr. Market anticipated. According to the company's press release, sales figures came in strong during the quarter through November, but, "from Cyber Monday through the end of December, however, sales trends fell below internal goals".

In light of these results, management expects earnings per share to fall in the lower end of the $0.18 to $0.26 range the company initially estimated. This likely means that the company's earnings for the quarter will fall at or below the $0.22 it earned the same quarter last year.

Select Comfort has a history of success
Leading up to this quarter, Select Comfort has, in many ways, surprised the market. Over the past four fiscal years, sales at the $955 million mattress retailer have grown tremendously. Between 2009 and 2012, the company grew revenue by 71.8% from $544.2 million to $935 million. Over that same timeframe, sales at Tempur Sealy International (TPX 0.42%) rose 68.8% from $831.2 million to $1.4 billion. In fact, only Mattress Firm Holding Corporation (NASDAQ: MFRM) has surpassed Select Comfort's growth as revenue rose 133.1% from $434.4 million to $1 billion.

Looking at profitability, we continue to see that Select Comfort's results have been strong. Over the past four years, net income rose an impressive $119.4% from $35.6 million to $78.1 million. While a good portion of this increase can be attributed to the company's growing revenue, the rest of it can be chalked up to cost containment that stemmed from economies of scale. For instance, Select Comfort saw its cost of revenue fall from 38.3% of sales in 2009 to 36.2% in 2012, while its selling, general, and administrative expenses fell from 56.7% of sales to 50.3%. These data points suggest that management has benefited from its growing market presence and has been able to exert its influence to keep costs lower.

But of course, Select Comfort wasn't the only mattress company to see improved operating results. Over the same timeframe, net income at Tempur Sealy also improved, rising by 25.6% from $85 million to $106.8 million. However, it should be noted that rising costs as a percentage of revenue have resulted in the company's net income falling every year since 2010. The primary culprit in the higher costs was the company's selling, general, and administrative expenses, which rose 87.4% since 2009.

Mattress Firm's results have also been encouraging. Between 2009 and 2012, net income at the company rose from a loss of $4.7 million to a gain of $39.9 million. Just as with the case of Select Comfort, the company has benefited handsomely from rising revenue as a catalyst for improving its bottom line, but it also saw improved cost efficiencies in the process. For instance, over that timeframe the company's cost of revenue fell from 64.6% of sales to 60.7%. However, this was partially offset by its selling, general, and administrative expenses rising from 29.4% of sales to 31.5% as the company works on expanding its operations and attracting a larger customer base.

Foolish takeaway
For the quarter, sales at Select Comfort have risen while its profitability will likely fall marginally. Initially, this is bad news that should signal to investors that now might be the time to sell. However, when you consider that the company has a strong track record for increasing its revenue and an even stronger one for improving its profitability, then it's hard to not want to buy. This is especially true when you realize that the company, which is trading at 14 times earnings, is far cheaper than Mattress Firm at 28 times or Tempur Sealy at 42 times. In fact, at this price, it might be impossible to say no.