Tag Archives: Sleep Number

Business, Finance, Occupation & Industry

Is Select Comfort's Stock Destined for Greatness?

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By Alex Planes, The Motley Fool

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Investors love stocks that consistently beat the Street without getting ahead of their fundamentals and risking a meltdown. The best stocks offer sustainable market-beating gains, with robust and improving financial metrics that support strong price growth. Does Select Comfort fit the bill? Let’s take a look at what its recent results tell us about its potential for future gains.

What we’re looking for
The graphs you’re about to see tell Select Comfort‘s story, and we’ll be grading the quality of that story in several ways:

  • Growth: Are profits, margins, and free cash flow all increasing?
  • Valuation: Is share price growing in line with earnings per share?
  • Opportunities: Is return on equity increasing while debt to equity declines?
  • Dividends: Are dividends consistently growing in a sustainable way?

What the numbers tell you
Now, let’s take a look at Select Comfort‘s key statistics:

Source: SCSS Total Return Price data by YCharts.

Passing Criteria

3-Year* Change 

Grade

Revenue growth > 30%

71.8%

Pass

Improving profit margin

(78.1%)

Fail

Free cash flow growth > Net income growth

(19.2%) vs. 119.7%

Fail

Improving EPS

77.9%

Pass

Stock growth (+ 15%) < EPS growth

183.7% vs. 77.9%

Fail

Source: YCharts. * Period begins at end of Q4 2009.

Source: SCSS Return on Equity data by YCharts.

Passing Criteria

3-Year* Change

Grade

Improving return on equity

(41.8%) **

Fail

Declining debt to equity

(100%)

Pass

Source: YCharts. * Period begins at end of Q4 2009.
** Begins at Q4 2010 due to abnormally high starting value in 2009.

How we got here and where we’re going
Despite significant growth on some metrics, Select Comfort‘s had a hard time justifying its share price of late — which may explain why shares have fallen so far in the past few months. At three of seven passing grades, Select Comfort‘s performance definitely leaves room for improvement. For curious investors, the question is: will that improvement happen in 2013? If not now, when?

Select Comfort‘s been tossing and turning uncomfortably all year. Its latest agony, which arrived last month, warned of a short-term sales weakness that resulted in big profit target cuts on Wall Street. Despite the worry, Select Comfort‘s forward P/E is an even 10  as of this writing, and could easily slip into single digits on one underwhelming day. Keep in mind, also, that the average $1.85 price target cited last month is still a 35% increase over 2012’s result.

That makes Select Comfort, surprisingly, the best bargain by far in the shrinking mattress segment. An acquisition last year left only Tempur-Pedic and Mattress Firm remaining to contend with Select Comfort, and at present both have P/E’s more than twice as high as that of the maker of Sleep Number beds. This is a bit surprising, as the last time I examined Tempur-Pedic, it was the best value, and part of that rationale was that its growth rates were reportedly lower than Select Comfort‘s. …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

This Week's 5 Dumbest Stock Moves

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By Rick Aristotle Munarriz, The Motley Fool

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Stupidity is contagious. It gets us all from time to time. Even respectable companies can catch it. As I do every week, let’s take a look at five dumb financial events this week that may make your head spin.

1. I think Icahn
Carl Icahn didn’t become a billionaire by making dumb mistakes, but his move to rattle the cage at Dell has all the makings of a disaster.

Dell received a $24.2 billion offer to take the company private last month, but Icahn feels that the buyout price of $13.65 a share is too low.

Simply being unhappy isn’t enough for Icahn, obviously. He’s an activist at heart, so he’s taken a stake in the fading PC maker and threatening “years of litigation” if he doesn’t get his way.

What’s his plan? Well, no one has offered to top the $24.2 billion offer, but Icahn is proposing — if the deal doesn’t pass — for Dell to pay a special dividend of $9 a share. Dell obviously doesn’t have that kind of money, so it would have to take on new debt to make it happen.

Really?

Dell’s behind the times, and it’s too late in a world that has eased up on PCs over the past two years. Analysts see revenue slipping again this year, with profitability taking an even bigger hit. Taking on more debt is the last thing that Dell needs right now.

2. Fumbling away an opportunity
DIRECTV may not realize that its exclusive deal with the NFL to air every regular season game in its entirety is perhaps the only reason why it’s able to command such a lofty premium over rival satellite television and most cable providers.

Speaking at Deutsche Bank Media, Internet & Telecom Conference in Florida this week, DIRECTV CFO Pat Doyle — as retold in Hollywood Reporter — said that the company is weighing changes to its NFL Sunday Ticket when it comes up for renewal.

The NFL is likely to command a princely ransom when the current deal expires in 2015, and Doyle said that the satellite television giant is considering striking a cheaper non-exclusive deal with the football league or dropping the package altogether.

Yikes. Maybe Doyle is merely negotiating in public, but at a time when live sports programming is about the only thing keeping many homes from cutting the cord with pay TV providers, it would be a devastating blow for DIRECTV to lose the one thing that sets it apart from everybody else.

3. Letting the bed bugs bite
In a week when the market was rallying to fresh all-time heights, shares of Select Comfort hit a new 52-week low after posting a disappointing sales update.

The company behind the Sleep Number air-chambered mattress warned that sales have been soft since the beginning of last month. Unlike its beds, there’s little that Select Comfort can do to adjust that firmness.

“We believe this is a short-term issue associated …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Select Comfort Provides Business Performance Update

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By Business Wirevia The Motley Fool

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Select Comfort Provides Business Performance Update

MINNEAPOLIS–(BUSINESS WIRE)– Select Comfort Corporation (NAS: SCSS) today reported it has experienced below-plan sales since Feb. 1, 2013 and will likely miss its internal goals for the first quarter.

“We believe this is a short-term issue associated with accelerated changes made to our media-buying strategy, and we are making the necessary corrections to both media buying and near-term expenses,” said Shelly Ibach, president and CEO, Select Comfort. “We remain confident in our growth formula and are committed to our strategy of delivering an unparalleled sleep experience for our customers.”

The company plans to discuss its outlook for the balance of the year following the release of first-quarter financial results scheduled for April 17, 2013. The company does not provide quarterly financial guidance and does not plan to provide additional commentary regarding first-quarter sales or earnings performance prior to April 17, 2013.

About Select Comfort Corporation

Select Comfort Corporation is leading the industry in delivering an unparalleled sleep experience by offering consumers high-quality, innovative and individualized sleep solutions and services, which include a complete line of SLEEP NUMBER® beds and bedding. The company is the exclusive manufacturer, marketer, retailer and servicer of the revolutionary Sleep Number bed, which allows individuals to adjust the firmness and support of each side at the touch of a button. The company offers further personalization through its solutions-focused line of Sleep Number pillows, sheets and other bedding products. And as the only national specialty mattress retailer, consumers can take advantage of an enhanced mattress-buying experience at one of more than 400 Sleep Number stores across the country, online at SleepNumber.com, or via phone at (800) Sleep Number or (800) 753-3768.

Forward-looking Statements

Statements used in this news release relating to future plans, events, financial results or performance are forward-looking statements subject to certain risks and uncertainties including, among others, such factors as general and industry economic trends; consumer confidence; the effectiveness of the company’s marketing messages; the efficiency of its advertising and promotional efforts; consumer acceptance of its products, product quality, innovation and brand image; availability of attractive and cost-effective consumer credit options; execution of the company’s retail store distribution strategy; the company’s dependence on significant suppliers, and its ability to maintain relationships with key suppliers, including several sole-source suppliers; the vulnerability of key suppliers to recessionary pressures, …read more
Source: FULL ARTICLE at DailyFinance