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Mattress Firm earnings spring upward by 45%

Sales increase came from new, acquired stores

Staff Staff, Larry Thomas -- Furniture Today, December 5, 2013

HOUSTON — Bedding retailer Mattress Firm said its net income shot up more than 45% in the third fiscal quarter on a 17.7% increase in sales.

The Top 100 retailer said the sales increase came from new and acquired stores, as well as a 2.9% comparable-store sales jump.

Sales for the 13 weeks ended Oct. 29 totaled $326.2 million, up from $277.3 million in last year's third fiscal quarter.

Net income totaled $18.1 million or 53 cents per share. That was up from $12.5 million or 37 cents per share in the same quarter last year.

"As a result of initiatives we recently put in place, combined with the early benefits we are experiencing from a renewed commitment of manufacturer advertising spend, we successfully drove traffic and comparable store sales growth in our third fiscal quarter," said Steve Stagner, president and CEO. "We implemented a number of sales initiatives during the quarter that encouraged our sales associates to improve their productivity and capture a higher percentage of sales from customers."

Stagner acknowledged the initiatives hurt margins, but said it resulted in positive sales momentum that has continued into the fourth quarter.

Gross margin from retail operations was 38.6% in the most recent quarter, down from 39.7% in last year's third fiscal quarter.

"We remain focused on our strategy of driving continued sales growth and building relative market share," Stagner said.

The company opened 40 stores during the quarter and opened a total of 121 locations in the first nine months of its fiscal year.

Sales for the 39 weeks ended Oct. 29 totaled $904.7 million, a 20.8% increase from $749.1 million in the comparable period. The company said comparable-store sales fell 0.5%, but it expects comparable-store figures to be flat to a low single-digit gain for the fiscal year that ends Jan. 28.

Net income for the most recent 39 weeks totaled $44.3 million or $1.30 per share. That was up 37.2% from $32.3 million or 95cents per share in the first 39 weeks of the previous fiscal year.

Mattress Firm said it now expects sales for the fiscal year to be $1.217 billion to $1.224 billion. That's up from a September forecast of $1.194 billion to $1.207 billion.

Earnings per share are projected at $1.65 to $1.73. The September forecast was $1.66 to $1.74.

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