Sleep Country Canada sales up 9.4%
Strong Canadian operations spur growth
Michael J. Knell -- Furniture Today, August 15, 2008
TORONTO — Sales and earnings for Sleep Country Canada Income Fund continued on their steady growth in the second quarter, driven by strong same store sales growth at its two Canadian banners and despite the weak market conditions endured by its U.S. operations.
Sales of C$91.4 million in the quarter were up 9.4% from the same period a year ago. Net earnings were C$5.8 million or 42 cents per trust unit, up 7.4% from a year earlier.
Sales for the Sleep Country Canada and Dormez-vous banners advanced 12.9% with same-store sales rising 4.5%. However, sales under the Sleep America banner in Arizona fell 3.5%.
EBITDA (earnings before interest, taxes, depreciation and amortization), the fund’s preferred measure of performance, rose 2% to C$8.6 million, driven by an EBITDA growth of 13.4% by its Canadian business.
For the six months that also ended June 30, sales of C$173 million were up 5.9% from the first half of last year. The Canadian business was up 9% while Sleep America sales declined 3.1%, the fund said.
For the first half, both EBITDA and net earnings declined. EBITA was C$14.3 million, compared to C$16 million in 2007. Meanwhile, net earnings dropped to C$9.8 million or 70 cents per share. Net earnings for the first six months of 2007 were C$10.3 million or 73 cents per share.
Stephen Gunn, chairman and CEO, told analysts during a conference call that the fund continues to perform well, particularly in Canada.
“We rolled out our new initiative to sell more pillows across Canada in the second quarter and are pleased with its early success and the fact that we can now offer our customers a complete sleep system,” he said.
At the end of the quarter, Sleep Country Canada Income Fund operated 133 stores under the Sleep Country banner and 27 stores in Quebec under the Dormez-vous banner. The fund also owns Sleep America, with 46 stores in Arizona.
