New stores push Mattress Firm sales up more than 50%
Larry Thomas -- Furniture Today, December 5, 2012
HOUSTON — Bedding retailer Mattress Firm said sales jumped more than 50% in the quarter ended Oct. 30 due largely to acquisitions and store openings.
Same-store sales, however, also rose 6.6% in the quarter as the company continued to drive strong performance from existing stores.
Net income edged up 1.1% to $12.5 million, or 37 cents per share.
Total sales for the quarter, including a net gain of 282 acquired and newly opened stores since the fiscal year began, were $277.3 million. That was up from $183.5 million in the same quarter a year ago.
The retailer ended the quarter with 1,011 company-owned stores, including 34 stores in South Florida and Georgia from the September acquisition of Mattress X-Press. After the quarter ended, the company announced it had agreed to acquire Charlotte, N.C.-based Mattress Source, which has 28 stores in North Carolina and South Carolina.
"Our core strategy of further penetrating our existing and new markets continues to result in increased market share and profitability, and the acquired stores continue to generate total sales above our initial expectations," said Steve Stagner, president and CEO.
For the nine months ended Oct. 30, sales totaled $749.1 million, an increase of more than 45% from $515.3 million in the first nine months of the previous fiscal year.
Nine-month net income totaled $32.3 million or 95 cents per share. That compares with $17 million or 76 cents per share in the comparable period the previous year. The year-ago figure included a $1.87 million loss from debt extinguishment.
Stagner said the company has seen lower-than-expected growth in store traffic since early November, as well as a pressure on the average ticket.
As a result, Mattress Firm has cut its sales projections for the fiscal year to $1.01 billion to $1.015 billion. That is down from earlier guidance of $1.022 billion to $1.039 billion.
Earnings-per-share estimates also were cut to a range of $1.18 to $1.21. The previous forecast was $1.47 to $1.50.
Stagner noted that despite the lower projections, sales in the current fiscal year will be more than 40% above the prior year.
"As we look to fiscal 2013, we remain confident that the execution of our growth strategy and improving operating efficiencies will drive market share and earnings-per-share gains," he said.