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Larry Thomas

Mattress Firm sales jump 47.9% with 24.8% same-store growth

Aided by tax benefit, retailer posts $17.4M profit in fourth quarter

HOUSTON — Top 100 retailer Mattress Firm said its sales leaped 47.9% in its fiscal fourth quarter, driven by more than 90 new and acquired stores, as well as same-store sales growth of 24.8%.

The retailer also recorded a profit of $17.4 million or 56 cents per share in the quarter ended Jan. 31, reversing a net loss in last year's fiscal fourth quarter. The net income figure included a one-time tax benefit of $14.2 million from the reversal of a valuation allowance for deferred tax assets.

"We completed fiscal year 2011 with great momentum, producing our highest quarterly sales and comparable-store sales growth in the fourth quarter and accentuating the strong financial results experienced throughout the year," said CEO Steve Stagner.

Mattress Firm ended the quarter, and its fiscal year, with 729 company-owned stores. During the fourth quarter, 41 stores were opened, 55 were acquired from Mattress Giant, and seven were closed.

Net sales for the quarter totaled $188.6 million, up from $127.5 million in the same quarter the previous year.

In last year's fiscal fourth quarter, the company had a net loss of $1.63 million or 7 cents per share.

For the fiscal year, sales were $703.9 million, an increase of 42.5% from $494.1 million the previous fiscal year. Same-store sales rose 20.5%.

Net income for the year was $34.4 million or $1.40 per share. That included a one-time tax benefit of $20.1 million from the reversal of a valuation allowance for deferred tax assets.

"Our results for the year, driven by solid comparable-store sales growth that has continued for the past two years, reflect the strength and expanding appeal of our brand, customer loyalty, and benefits we derive from selling the leading brands in the bedding industry," Stagner said. "In addition, we are encouraged by the consistent sales increases reported by the bedding industry as we believe pent-up consumer demand and product innovations are driving customers into the market."

Mattress Firm also announced it plans to acquire the remaining assets of Mattress Giant, which includes about 180 stores in Florida and Texas. (See separate story.) As a result of that deal and the opening of about 100 new stores, the company said it expects sales of $1.03 billion to $1.06 billion for the current fiscal year, which ends Jan. 29, 2013.

Earnings for the fiscal year are projected to be $1.40 to $1.48 per share.

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