MINNEAPOLIS -- Select Comfort Corp.'s shares dropped in after-hours trading Wednesday after the mattress company issued a disappointing full-year revenue forecast.
Select Comfort said that its third-quarter profit increased by 52 percent on stronger sales. It also raised its full-year outlook, but revenue guidance didn't meet market expectations and that was enough to spook some investors.
Mattress makers have grown intensely competitive in recent years as consumers curbed big-ticket spending. However, Select Comfort used new products, aggressive marketing and added stores to get an edge. This is the second time that the company has raised its full-year forecast.
Select Comfort made $26.2 million, or 46 cents per share, in the quarter that ended Sept. 29. That's up from $17.2 million, or 31 cents per share, in the same quarter last year. Revenue increased 24 percent to $246.8 million.
Analysts expected the company to earn 41 cents per share on revenue of $244.9 million, according to FactSet.
Select Comfort, known for its Sleep Number beds, said revenue from stores open at least a year increased 21 percent as more shoppers spent more in its stores. That is a key indicator of a retailer's financial performance because it strips away the impact of recently opened or closed stores.
The company operated 394 stores nationwide at the end of the quarter and expects to have as many as 412 by the end of the year.
Select Comfort expects to earn $1.51 to $1.53 per share for the year on an adjusted basis. Analysts were expecting $1.41 per share. The company sees sales growing 20 percent year-over-year, which amounts to roughly $927.3 million in revenue for 2012. Analysts forecast revenue of $946.4 million for the year.
Shares of Select Comfort rose 43 cents to close at $32.63. They fell $1.23, or 3.8 percent, to $31.40 in after-hours trading.