As a Select Comfort
Select Comfort shares sank by 31% to a new Sleep Number low on Thursday, after the company posted disappointing fourth-quarter results.
Net sales slipped by 4% to $190.7 million during the period, but profitability fell by 75% to $0.05 a share. Earnings aren't the only things that have shrunk to a quarter of what they used to be. Select Comfort's stock is also trading at a quarter of its 52-week high.
It's a grim report. It also comes two weeks after rival Tempur-Pedic
It's official, then. The high-end mattress market is in a rut. It doesn't matter if you're trying to sell beds that are dual-chambered air mattresses by Select Comfort or the pressure-relieving TEMPUR material that sets Tempur-Pedic apart from more mainstream manufacturers like Sealy
Selling big-ticket items in a soft economy isn't helping. Housewear retailers like Bed Bath & Beyond
This year won't get any better for Select Comfort. The company expects earnings to fall further in 2008 than they did in 2007. Store-level comps are likely to continue to diminish.
One can always hope that some of the stimulus package rebate checks will go to mattress upgrades, but that may be wishful thinking at this point.
Sleepers appear willing to lie in the beds they've already made. As a Select Comfort investor, I'm starting to feel the same way.
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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.