Select Comfort Corporation announced results for the fiscal second quarter ended June 30, 2007. Net sales decreased 5 percent to $179.0 million, compared to $188.1 million in the second quarter of 2006. Net income totaled $2.9 million, or $0.06 per diluted share, compared to $10.7 million, or $0.19 per diluted share, in the second quarter of 2006.
"Second quarter sales were in line with expectations outlined in the quarterly update communicated in mid-June," said Bill McLaughlin, Select Comfort chairman and chief executive officer. "Profits also were in line with our full-year expectations. And we continue to make productivity gains and leverage the cash advantages of our business model, which allow us to invest in our growth initiatives."
Sales growth from new company-owned stores, which totaled 48 net new stores in the past 12 months, and growth through the company's e-commerce channel were offset by a 14 percent decrease in comparable-store sales. "The company has experienced an improving trend in retail sales during the second quarter and into the third quarter as we implement the core elements of our 2007 plan," explained McLaughlin.
The gross profit percentage increased to 61.2 percent of net sales, an improvement of 80 basis points, compared to 60.4 percent in the second quarter of last year. The gross profit margin improvement reflects solid execution in achieving compliance with mandatory national fire retardant requirements, which took effect July 1, 2007.
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