SELECT COMFORT ANNOUNCES THIRD QUARTER 2017 RESULTS
Reported net sales increase of 9% to $403 million
Generated record operating cash flow of $176 million for the first nine months of the year
Increased share repurchase authorization to $500 million
Maintained midpoint of EPS outlook, while narrowing range to $1.30 to $1.45 per share
MINNEAPOLIS - (October 17, 2017) - Select Comfort Corporation (NASDAQ: SCSS) today reported third quarter 2017 results for the period ended September 30, 2017.
“Strong demand in the quarter for our revolutionary Sleep Number 360™ smart beds, higher than expected gross margins, and disciplined expense controls partially offset unexpected hurricane impacts,” said Shelly Ibach, president and chief executive officer of Select Comfort. “We are excited with how the consumer continues to respond to our innovations focused on quality sleep and wellness. With cash flow generation at record levels and the underlying strength of our business, we are increasing our share repurchase authorization to $500 million and are reaffirming the midpoint of our 2017 EPS guidance.”
The company also announced that effective November 1st, it will officially change the corporate name to Sleep Number Corporation and will also change the Nasdaq ticker symbol from SCSS to SNBR.
Third Quarter Review
Net sales increased 9% to a quarterly record of $403 million, including 6 percentage points of growth from stores opened in the last twelve months and a 5% comparable sales increase
Gross profit increased 9% to $253 million, with a gross margin rate of 62.9%
Earnings per diluted share increased 11% to $0.62, compared with $0.56 in the prior year’s quarter
Cash Flows and Balance Sheet Review
Generated a record $176 million in net cash from operating activities for the first nine months of 2017, compared with $145 million for the same period last year
Invested $38 million in capital expenditures and returned $115 million of cash to shareholders through share repurchases during the first nine months of 2017 compared with $39 million and $95 million, respectively, for the same period last year
Return on invested capital (ROIC) was 13.8% for the trailing twelve-month period, well above our cost of capital
Share Repurchase Authorization
The company also announced an increase in the outstanding share repurchase authorization to $500 million, effective at the beginning of the fiscal fourth quarter. The company is committed to delivering superior shareholder returns, including returning cash to shareholders through share repurchases. Since the beginning of 2012, Select Comfort has invested $465 million in capital spending and acquisitions, while also returning $453 million in cash to shareholders through share repurchases.
The company updated its outlook for 2017 earnings per diluted share to a range of $1.30 to $1.45 per share. The outlook includes an estimated $0.18 EPS impact from incremental costs related to the launch of the Sleep Number 360™ smart bed line and the evolution of our supply chain. The outlook assumes high single-digit sales growth, including 5 to 6 percentage points from net new store openings and low single-digit comp store growth. The company anticipates 2017 capital expenditures to be approximately $55 million.
The following information was filed by Select Comfort Corp (SCSS) on Tuesday, October 17, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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Ticker: SCSS CIK: 827187 Form Type:10-Q Quarterly Report Accession Number: 0000827187-17-000054 Submitted to the SEC: Fri Oct 27 2017 4:11:50 PM EST Accepted by the SEC: Fri Oct 27 2017 Period: Saturday, September 30, 2017 Industry: Household Furniture