Select Comfort Corp.

Select Comfort Corp. (SCSS - Snapshot Report) just surged into a new multi-year high after reporting strong Q2 results that included a 15% earnings surprise. With estimates on the rise and a bullish growth projection, this Zacks #1 Rank stock has plenty of momentum.

Company Description

Select Comfort Corp develops, manufactures and sells adjustable beds and sleeping accessories in the United States, Canada and Australia. The company was founded in 1987 and has a market cap of $1.2 billion.

Shares of SCSS jumped into a new multi-year high on October 18 after the company reported strong Q2 results that came in ahead of expectations.

Second-Quarter Results

Revenue for the period was up 25% from last year to $200 million. Earnings also came in strong at 31 cents, 15% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 30% over the last four quarters.

The good quarter was driven by strong company-controlled same-store sales, up 26% from last year. Average retail sales per store was also up sharply, jumping an impressive 29% from last year.

Gross margin increased 50 basis points to 63%, an impressive margin profile by any standard.

Estimates

We've seen some solid movement in estimates off the good quarter, with the current year gaining 6% to $1.01 while the next-year estimate added 9 cents to $1.25, a bullish 23% growth projection.

Valuation

With a PEG ratio of .91, SCSS trades at a discount to the benchmark of 1 for value.

12-Month Chart

On the chart, shares jumped into a new multi-year high on the good quarter. Take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Whisper Trader Service.

Read the full analyst report on SCSS