Top Performer for Thurs: Select Comfort (SCSS)

At the time of this writing, the Dow is down triple digits and the NASDAQ and S&P are both slumping by more than 1.5%, but shares of Select Comfort Corporation (SCSS - Snapshot Report) are up approximately 4%.

That's a pretty impressive performance on an otherwise challenging day, and it's also enough to earn a spot on the Zacks #1 Rank Top Performers List for Thursday.

Volume today is at 419,000 shares, which is below the daily average of about 690,000.

Select Comfort is engaged in the manufacture, specialty retailing and direct marketing of premium quality, innovative adjustable-firmness beds and other sleep-related products. It is part of the Furniture industry on the Zacks #1 Rank List, along with Tempur-Pedic International Inc. (TPX - Snapshot Report).

Earnings Estimates

Expectations for both this year and next have shot higher for Select Comfort in the past month. The Zacks Consensus Estimate for this year is currently at 16 cents per share; it was at a loss of 7 cents just 1 month ago. There are 3 covering analysts for this period and they have all contributed to this advance.

Meanwhile, the Zacks Consensus Estimate for next year has jumped about 162% in 30 days to 34 cents per share. That marks year-over-year profit growth of more than 112%. There are 4 covering analysts for this period and, like this year's guidance, all of them have participated in the higher revision.

New Credit Agreement for Select Comfort

Some of the more recent news from Select Comfort came early this week when it announced an amended and restated credit agreement with its lenders. The credit facility provides and initial commitment of up to $55 million and extends through Jun 30, 2011.

SCSS also received a $10 million investment from Sterling Partners pursuant to terms of the Securities Purchase Agreement.

"With this credit agreement and Sterling Partners investment, we have now addressed a key priority of improving our capital structure," said President/CEO of Select Comfort, Bill McLaughlin. "While we continue to pursue steps to further strengthen our capital position, we believe we have a solid foundation and look forward to building on our positive momentum."

Third-Quarter Report

That "positive momentum" was on display in its third-quarter report from Oct 22. Select Comfort announced earnings per share of 20 cents, excluding items, which beat the Zacks Consensus Estimate of 7 cents by more than 185%. It was the third consecutive quarter of better-than-expected earnings.

Net sales declined 6% to $147.5 million from $157.2 million last year, while same-store sales grew 9%. There were 14% fewer stores open than in the previous year.

SCSS attributed the quarter's results to its focus on controlling costs, building its brand for improved sales, and preserving cash. The company said it is taking a conservative approach and is prepared to capitalize on growth opportunities.

Looking forward, Select Comfort expects full year earnings per share between 2 cents and 8 cents per share.