8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON,  D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 13, 2005

SELECT COMFORT CORPORATION

(Exact name of registrant as specified in its charter)

Minnesota

(State or other jurisdiction of incorporation or organization)

0-25121	41-1597886
(Commission File No.)	(IRS Employer Identification No.)

6105 Trenton Lane North, Minneapolis, Minnesota 55442

(Address of principal executive offices)(Zip Code)

(763) 551-7000

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 7.01. REGULATION FD DISCLOSURE

On December 13, 2005, Select Comfort Corporation provided a pre-recorded update on its business trends for fourth quarter 2005. A copy of the press release announcing the details for accessing the recording is attached as Exhibit 99.1 to this Current Report on Form 8-K. A transcript of the recording is also attached as Exhibit 99.2 to this Current Report on Form 8-K.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(c)Exhibits.

Exhibit 99.1Press Release dated December 13, 2005

Exhibit 99.2Transcript of recorded business update dated December 13, 2005

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SELECT COMFORT CORPORATION
	(Registrant)
Dated: December 13, 2005	By:  /s/ Mark A. Kimball
	Title: Senior Vice President

INDEX TO EXHIBITS

The exhibits listed in this index are being furnished pursuant to Item 9.01 of Form 8-K and shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended, or incorporated by reference into any document filed under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, except as otherwise expressly stated in any such filing.

Exhibit No.Description of Exhibit

99.1Press Release dated December 13, 2005

99.2   Transcript of recorded business update dated December 13, 2005

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EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE      Contact:   Frank Milano                         Select Comfort Corporation                         (763) 551-6908 frank.milano@selectcomfort.com

SELECT COMFORT COMMENTS ON

2005 FOURTH QUARTER BUSINESS TRENDS

MINNEAPOLIS - (Dec. 13, 2005) - Select Comfort Corporation (NASDAQ: SCSS), the nation’s leading bed retailer and creator of the Sleep Number^® bed, today provided an update on its business trends for fourth quarter 2005. A digital replay of the update can be accessed after 3:00 p.m. Central Time on Dec. 13 through 5:00 p.m. Central Time on Dec. 20 by calling

888-286-8010 (International callers may dial 617-801-6888), or until Jan. 30, 2006 through the Investor Relations section of the company’s website at www.selectcomfort.com. The passcode for the telephone replay is 38453931. A transcript of the recording may also be accessed through the Investor Relations section of the company’s website at www.selectcomfort.com.

About Select Comfort

Founded in 1987, Select Comfort Corporation (NASDAQ: SCSS) is the leading bed retailer in the United States⁽¹⁾, holding 32 U.S. issued or pending patents for its personalized sleep products. The company designs, manufactures and markets a line of adjustable-firmness mattresses featuring air-chamber technology, branded the Sleep Number^Ò bed, as well as foundations and sleep accessories. Select Comfort products are sold through its nearly 400 U.S. retail stores; through selected bedding retailers; through its national direct marketing operations; and on the Internet at www.selectcomfort.com.

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(1)   Top 25 Bedding Retailers, Furniture Today, May 23, 2005

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EX-99.2

                                                                                                                                                                      ;                                                 Exhibit 99.2

Fourth Quarter 2005 Business Update

Good afternoon and welcome to Select Comfort’s fourth quarter update call. This is Jim Raabe, Chief Financial Officer at Select Comfort Corporation. This call was prerecorded on Tuesday, December 13th, and the replay will remain available on our website at www.selectcomfort.com until our next update or earnings release, currently planned for January 31^st, 2006.

Before I begin, let me remind you that the information in this call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties which may cause the company’s actual results in future periods to differ materially from forecasted amounts. These risks are outlined in our earnings releases and are discussed in some detail in our annual report on Form 10-K and other periodic filings with the SEC. We undertake no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances.

This call will cover two main points

·   First our sales and profit trends remain on track and we expect to meet or possibly exceed the high-end of our guidance

·   Second I will touch briefly on our outlook for 2006 and the expected impact of expensing stock options, which will begin in January

First, a few comments on fourth quarter performance. Sales trends within our various channels remain favorable and we continue to view our fourth quarter positively. Based on sales trends over the Thanksgiving holiday weekend and for the full holiday season to date, we expect sales for the quarter to meet or exceed our same store growth target of between 7 and 12 percent and our year-over-year revenue growth target of between 15 and 20 percent. Additionally, productivity initiatives throughout the company and our recent 5% price increase are expected to offset inflationary pressures and contribute to margin improvements.

Our previously stated full year guidance for 2005, excluding stock option expense, is for earnings per share of between one dollar, 5 cents and one dollar, 8 cents. We expect to be at the high end of this range with some upside potential.

Additionally, a few points covering frequently asked questions :

·   First, the foam supply constraints that recently affected our industry have abated and we are currently operating with normal production schedules.

·   Second, in the first week of fiscal December, we implemented a price increase that averaged 5 percent. The 5 percent price increase is in response to inflationary pressures including higher petroleum and petroleum-derivative product prices, and amounts to less of an increase than what we’ve seen at the wholesale level from most of our competitors. The price increase should protect our gross margins beginning in December 2005 and continuing into 2006.

·   Third, our distribution strategies remain on track. Our store count has increased by 7% in 2005 to 396 stores, in line with previously announced expectations, and we expect to expand our retail partner distribution to 295 third party mattress retailer doors by the end of the year. Our recently announced retail partnerships with Jordan’s and Slumberland exemplify what we look for in expanding our distribution beyond our company-owned distribution:

§   Branded retailers who are leaders in their respective markets

§   Significant experience with premium mattress sales, and

§   A commitment to working with us to build our Sleep Number^® brand.

Similarly, our relationship with Sleep Country, the leading mattress retailer in its Canadian markets, will help us to establish our first significant distribution outside the U.S. and is a first step in our efforts to build a global brand.

·   Finally, our cash position remains strong. In the fourth quarter we have repurchased 178,000 shares at a cost of $3.5 million. This brings our year-to-date repurchases to approximately 2.4 million shares at a cost of $50 million.

Next, I wish to address our outlook for continued aggressive growth in 2006, and the impact of implementing accounting changes for accounting standard number 123R relating to equity compensation.

First, our long-term growth targets remain unchanged:

·   Same store growth of between 7 percent and 12 percent;

·   Total revenue growth of between 15 percent and 20 percent, and

·   Earnings growth of between 20 percent and 25 percent.

We believe we have growth plans and productivity measures in place to achieve these targets again in 2006 as we have over the past 5 years.

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Our long term earnings growth targets reflect a like comparison of year over year earnings. In 2006, we will begin expensing the estimated value of stock options in our financial statements. Our reported quarterly and year-to-date net income and earnings per share figures in 2006 will reflect the effects of stock options expense, while the comparative results for 2005 periods will not include such charges.

In 2006, we estimate that expensing stock options will cost 2 to 3 cents per quarter on an after tax basis. The actual quarterly expense may fluctuate somewhat due to the accounting treatment for taxes associated with option expenses.

The change in accounting practice regarding the expensing of stock options has no operating effect on our business or on the superior cash flow generation of our business model. So while there will be no impact on our cash profits, there will be an apples-to-oranges P&L effect throughout 2006 as we report quarterly results reduced by estimated options expense versus 2005 results that did not reflect that estimated expense.

Let me conclude today’s call by restating:

·   Our fourth quarter sales and profit trends remain on track and we expect to meet or possibly exceed the high-end of our guidance, and

·   We expect to continue our aggressive growth rates in 2006. We are confident in the sustainability of our business model and remain on track to achieve our 2007 goal of $1 billion in sales and 12% operating margin.

Thank you for joining us on today’s call. We appreciate your continued interest in Select Comfort, and we look forward to your participation in our upcoming earnings call. This concludes today’s call.

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