Select Comfort misses profit expectations

Just as it warned, specialty bedmaker Select Comfort Corp. missed quarterly profit expectations for a fifth consecutive quarter Wednesday as a tepid holiday season curbed demand for its high-end adjustable beds.

But CEO Shelly Ibach sought to quell concerns during a conference call with analysts, saying that new products and better marketing could bolster the Plymouth company. "As we look to 2014, we are cautiously optimistic about the combined impact of what we believe are fundamental product innovations and the most tested new advertising campaign in our history," Ibach said Wednesday.

Two weeks ago, Select Comfort unveiled the largest ad campaign in company history, featuring two humorous TV commercials for Sleep Number adjustable air beds. A third commercial launches Saturday that will feature the new Sleep Number x12 bed, which boasts anti-snore technology and movement tracking data.

"I have seen the new ads. They are quite impressive," Wedbush Securities equity research analyst Joan Storm said.

But even with the product and advertising blitz, Select Comfort expects adjusted earnings for 2014 to be flat and match the $1.07 per-share earnings of 2013.

The guidance assumes single-digit revenue growth and a net gain of 20 to 30 new stores this year, officials said.

Ibach told analysts that Select Comfort expects a tepid first half of 2014 as it closes out two series of older bed models and introduces new beds with more bells and whistles at lower price points.

Select Comfort, which opened 28 stores and closed 11 locations during the quarter, has struggled all year. Earnings fell 48 percent to $6.4 million, or 12 cents a share, while sales rose 5 percent to $231 million. Analysts had expected quarterly earnings of 15 cents a share.

The company, which reported financial results after the market closed, also hit a 52-week low of $15.31 Wednesday. Shares closed at $15.67, down about 1 percent.