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Shares of mattress makerSelect Comfort Corp. (NASDAQ: SCSS) jumped as much as 25.2% on Thursday after the company reported better-than-expected earnings. At 12:30 p.m. EDT shares were still up an impressive 24.9% on the day.
Revenue rose 12% in the first quarter to $394 million, including a 3% jump in same-store sales. Net income was up 88.6% to $24.5 million, and earnings per share more than doubled to $0.56. Analysts were expecting only $0.46 per share in earnings.
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Management also increased its full-year earnings outlook from a range of $1.20 to $1.40 per share to a new range of $1.25 to $1.50 per share. This outlook includes $0.15 to $0.22 per share in costs related to the Sleep Number 360 launch, the company's newest product coming to market.
Operations continue to perform well and management is very bullish on the new Sleep Number 360 smart beds. If same-store sales can continue to improve by low single digits, bolstered by new-store openings, the company's financial performance looks like it will be on a positive path. Shares aren't cheap at 21 times the high end of 2017 earnings estimates, but with great products and an effective retail strategy, Select Comfort is poised to be a great stock for long-term investors.
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