Select Comfort Provides Business Performance Update

This firm is one of the first out this month on Business Wire reporting a somewhat unfavorable update to their Q4 performance projection.

These are the "Sleep Number Bed" people, who sell that somewhat discretionary consumer product.

Excerpt from the release:

The mid-point of the company’s fourth-quarter EPS guidance range of $0.18 to $0.26 assumed low-double-digit growth in total net sales and mid-single-digit growth in company-controlled comparable sales.

Through November, company performance was trending consistent with the EPS guidance range, with solid sales results and expense controls. 

From Cyber Monday through the end of December, however, sales trends fell below internal goals. As a result, the company now expects fourth-quarter EPS to be below the low end of its guidance range. 

“The sales slowdown following the Thanksgiving holiday reflected a tepid retail holiday shopping season. We expect this challenging environment to continue in 2014 and are planning accordingly,” said Shelly Ibach, president and CEO, Select Comfort.

FYoY Treasury spending was reported here as DOWN by $37B in the months of October and November in light of the so-called government "shutdown"; accordingly these negative developments in business sales results at this firm immediately following these two months of Treasury spending cuts should not be surprising.

The CEO indicates that they expect the current "challenging environment" to continue, and are "planning accordingly", reasons for this thinking are not given.

If this firm is planning to cut back in some way in response to what they view as a generally "challenging environment", expecting the current short term business environment to continue for the rest of the FY, this may not turn out to be the best course of action for the firm as the December Treasury spending data reveals a recovery in Treasury spending in December with a slight $5B YoY increase last month; post the short-term effects of the "shutdown".