Select Comfort downgraded to "market perform"

07/13/04 - Piper Jaffray

NEW YORK, July 13 (New Ratings) – Analyst Michael E Cox of Piper Jaffray downgrades Select Comfort Corporation (SCSS) from "outperform" to "market perform." The target price has been reduced from $34 to $21.

In a research note published this morning, the analyst mentions that the downgrade in rating is based on the company’s lower-than-expected 2Q sales results and the reduced 2004 guidance. The shortfall in the company’s 2Q04 sales performance could be attributed to internal factors, such as an inadequate sales compensation structure, the analyst adds. Although remedial actions are in place, Select Comfort’s top line trends are expected to remain subdued in the near-term, the analyst believes.