On April 25, Sleep Number bed creator Select Comfort
- 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) |
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.
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