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Acquisitions lift Mattress Firm sales to $1B

HOUSTON - Fueled by acquisitions and new store openings, bedding retailer Mattress Firm recorded a 37% sales increase in the fourth quarter and saw sales top the $1 billion mark in the fiscal year that ended Jan. 29.
     The fiscal year sales of $1.007 billion represented a 43.1% increase from the previous year.
     Most of the top-line growth was due to the addition of 328 stores during the year, including 242 added through acquisitions. The company ended the year with 1,007 company-owned stores.
     Same-store sales were down 1.6% for the quarter but were up 6.1% for the full fiscal year, the company said.
     Fourth-quarter net income fell more than 50% to $7.59 million or 22 cents per share, due largely to higher income taxes and acquisition expenses. The previous year's fourth quarter had net income of $17.3 million or 56 cents per share, including an income tax benefit of $9.69 million.
     For the full year, net income was $39.9 million or $1.18 per share. That compares with $34.4 million or $1.40 per share in the previous year. Pershare figures were lower in the most recent fiscal year due to a secondary stock offering that added almost 10 million outstanding shares.
     "We achieved significant growth in 2012, unprecedented in our industry, as we drove net sales by 43.1% to above the $1 billion mark and increased our store base by 45% to over 1,000 units," said Steve Stagner, president and CEO. "Overall, fiscal 2012 was a record year for Mattress Firm."
     The fourth quarter saw the company complete its third major acquisition of the year - the 24-store Mattress Source chain based in Charlotte, N.C.
     Earlier in the year, the company acquired the 181-store Mattress Giant chain and the 34-store Mattress Xpress.
     Looking ahead to 2013, Stagner said the integration of the acquired stores should result in higher operating margins and improved sales. Plus, the company plans to add more than 100 stores.
     "We expect to drive sales and operating margin expansion from the ongoing sales growth of acquired stores, which will be enhanced as we pass the anniversary dates of our 2012 acquisitions," he said. "We envision this growth, combined with a third consecutive year of opening more than 100 organic new stores in line with the continued execution of our relative market share strategy of penetrating markets, will further strengthen and fortify our leadership position."
     For the current fiscal year that will end Jan. 28, 2014, the company is projecting sales of $1.237 billion to $1.25 billion and earnings per share of $1.81 to $1.89.

Mattress Firm

Earnings per share are fully diluted, and all figures in parentheses are losses or declines.

13 weeks ended 1/29

2013

2012

Change

Sales

$258,246,000

$188,558,000

37.0%

Operating income

18,691,000

14,483,000

29.1%

Net income (a)

7,594,000

17,372,000

(56.3%)

Earnings per share

0.22

0.56

(60.7%)

52 weeks ended 1/29

2013

2012

Change

Sales

$1,007,337,000

$703,910,000

43.1%

Operating income

73,570,000

56,607,000

30.0%

Net income (b)

39,871,000

34,351,000

16.1%

Earnings per share (c)

1.18

1.40

(15.7%)

(a) Includes income tax benefit of $9.69 million in 2012.

(b) Includes income tax benefit of $8.82 million in 2012.

 (c) Based on weighted average share count of 33.77 million in 2013 and 24.59 million in 2012.

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