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Select Comfort Shares Fall

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It was revealed on Thursday that Select Comfort (NASDAQ: SCSS), a $1.17 billion company, is down 20.52% in the morning.

We wrote yesterday that Mattress Firm (NASDAQ: MFRM) saw shares fall 10% on Tuesday evening, and Tempur-Pedic (NYSE: TPX) is down 48.73% too.

Select Comfort is the latest bed-related company to take a big hit, as it appears reports that investors are putting their money under their mattress in this tough economic climate have been hugely exaggerated.

We said yesterday that it stands to reason that, when times are tough, people will cope with an old mattress even if there is a spring poking through. Hey, you can always turn it over. People do crazier things in times when the money isn't flooding the bank.

All of which spells trouble in the long term for the whole bed and mattress industry, though one would imagine all of that could change very quickly given the slightest sign of a recovery.

Some analysts believe that there is a domino effect going on within the industry and that Select Comfort is simply trading in sympathy with Tempur-Pedic. That could well be the case, but it seems like a huge gamble.

Either way, Select Comfort certainly offered a gloomy outlook for the year, stating that the company expects earnings per share of $1.32 to $1.40 this year, up from $1.07 last year, with comparable sales expected to increase a minimum of 15%.

It's not all doom and gloom then, with two analysts keeping their Buy ratings on the company, with 12-month price targets of $40 to $41.

It has been an eventful week for Select Comfort too, with the company announcing several key changes to its leadership structure on Tuesday.

“This is an exciting time for Sleep Number as we continue to focus on delivering an unparalleled sleep experience for our customers,” explained Shelly Ibach, CEO. “To that end, we've built an experienced, consumer-centric senior leadership team dedicated to realizing our potential as both a brand and company for the benefit of customers, employees and shareholders.”

Michael Bills came onboard as senior vice president and chief marketing officer, while Annie Bloomquist has been promoted from vice president to senior vice president and chief product officer. Hunter Saklad has also joined the senior leadership team. The company will be hoping that these changes are the springboard required to help the numbers move in the right direction.

The International Sleep Products Association reported that bedding unit sales were up a meager 2% in 2011, with the dollar value of shipments increasing by 10%.

Follow me @BCallwood.

Posted-In: Earnings News Retail Sales Best of Benzinga


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