After a pair of disappointing quarters, it was refreshing to tune into Select Comfort's (NASDAQ:SCSS) mid-quarter update earlier this week and not hear the following:

  • A swarm of South American pin-needled insects are deflating our air-chamber mattresses.
  • Lindsay Wagner has traded in her Sleep Number bed for a Tempur-Pedic (NYSE:TPX) product.
  • The sky is falling, but we didn't hear about it because we were sleeping through it in our cozy beds.

Instead, the company held the line, reaffirming its earlier guidance for all of 2007. It still expects revenues to grow by 12% to 15%. Earnings per diluted share should grow by roughly 20%, coming in between $1.02 to $1.09 per share.

The outlook calls for a slow start to the year, with a moderate acceleration into the second half. So even though the company has seen store-level trends of flat to slightly favorable comps in some regions through the first 10 weeks of the current quarter, don't expect comps to show improvement until the third quarter.

A new media campaign is in the works, and the pilot should roll out in a few weeks. The company is looking to add 10 net new stores to grow its namesake units to 447, with its third-party distribution outlets holding steady at 822 doors.

Closing at $17.28 yesterday, Select Comfort is fetching a reasonable 16 to 17 times this year's profit guidance. If that doesn't sound cheap to you, it is to Select Comfort. The company continues to voraciously wolf down shares. So far in 2007, it has spent $36 million to repurchase nearly 2 million of them.

As an investor, I like to see that. I'm not happy with the lull in Sleep Number popularity, but slower growth is certainly better than no growth at all. The company should hold up well if the economy teeters, because mattress makers like Sealy (NYSE:ZZ) have been pretty recession-resistant in the past. Bed replacements aren't necessarily tied to real estate cycles.

However, I do remain skeptical when a company warns that growth will pick up over the course of the year. Usually, that's a way to camouflage current softness. That's not much of a surprise in Sleep Number's case, after its lackluster close to 2006, but it will make it harder for me to sleep comfortably as a Select Comfort shareholder until we make it through 2007.

For more the Sleep Number seller, check out:

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Longtime Fool contributor Rick Munarriz thinks that a good night's sleep is better than a balanced breakfast to start the day off right. He does own shares in Select Comfort. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.