Mattress Firm sales soar 45% in second quarter

Second-quarter snapshot
Net sales $262 million
Net income $10.1 million
Adjusted operating margin 9%

Mattress Firm Holding Corp., the parent of Houston-based bedding retailer Mattress Firm, reported that net sales for its second fiscal quarter were $262 million, a 45% increase over the second quarter of 2011. The fiscal quarter ended July 31.

The increase in sales was the result of comparable-store sales growth of 5%, the acquisition of 181 Mattress Giant stores and the opening of 27 new stores during the quarter, according to the company.

Net income for the second quarter was $10.1 million. Earnings per share were $0.30.

Income from operations during the second quarter was $17.6 million. Excluding $5.9 million of acquisition-related costs, adjusted income from operations was $23.5 million, an increase of $9.1 million—or 63.1%—over the prior-year period.

Adjusted operating margin during the quarter improved 100 basis points from 8% in 2011 to 9% in 2012.

Costs related to the Mattress Giant acquisition totaled $5.9 million and consisted of $1.3 million in costs of sales attributed to duplicate warehouse facilities and costs of remerchandising the former Mattress Giant stores, as well as $4.6 million classified as general and administrative expenses related to direct costs of the transaction, costs of retraining Mattress Giant personnel and duplicate costs of the Mattress Giant corporate office.

Mattress Firm said it has completed the majority of the transition of Mattress Giant corporate office support functions to its Houston corporate office and continues the process of consolidating warehouse facilities.

“Our performance demonstrates the tremendous capacity of this organization as we successfully integrated and absorbed levels of growth unprecedented in this industry in such a compressed timeframe, while achieving record sales and profitability during the same period,” said Steve Stagner, Mattress Firm president and chief executive officer. “By accomplishing this, it reaffirms that our core strategy of further penetrating our existing markets concurrently with expanding into new markets is driving market share and profitability. With sales results from Labor Day coming in at the levels we anticipated, we remain confident that our comparable-store sales trends will improve during the second half of fiscal year 2012, relative to the second fiscal quarter. Furthermore, comparable-store sales growth should accelerate in the fourth fiscal quarter with the addition of the first wave of approximately 50 former Mattress Giant stores acquired in November 2011 in the comparable-store base.”

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