Select Comfort’s stock jumped 22 percent Friday after the once-troubled bed maker beat first-quarter expectations and maintained its full year profit forecast despite sluggishness in the sector.
The Plymouth-based company that makes adjustable, air-pressured beds, reported late Thursday that its first-quarter sales rose 1 percent to $353 million, topping analysts estimates of $344 million. Its profit of 27 cents a share was off sharply from a year ago but beat expectations by 7 cents a share.
Company officials said installation of an ERP computer system slashed profits by 25 cents per share for the quarter. CEO Shelly Ibach told analysts during a conference call Friday that the implementation of the ERP system represented “the last piece of our transformation.” She noted that the company had returned to normalized customer service levels.
“The system is already improving our customer experience and we expect to realize operating efficiencies in the back half of this year,” she said. “Our competitive advantages are stronger than they have ever been and we are now well positioned for accelerated long-term earnings growth.”
The company reiterated its 2016 outlook of $1.25 to $1.45 per share. The forecast compares with full-year 2015 earnings of 97 cents per share and comes at a time when the bed industry is facing some headwinds.
While the forecast for the year buoyed spirits, Piper Jaffray analyst Peter Keith said the company’s second-quarter forecast did not. He said management signaled that second quarter per-share results would be “essentially flat.” On average analysts were expecting a 13-cent-per-share boost. “The second-quarter guidance was below expectations,” Keith said.
Select Comfort shares rose $4.41 Friday, closing at $24.68 a share.