|Net sales||$333.5 million|
|Net income||$7.7 million|
|Adjusted operating margin||6%|
Mattress Firm Holding Corp., the parent of Houston-based retailer Mattress Firm, reported that net sales for its first fiscal quarter were $333.5 million, a 20.9% increase over the first quarter of 2013. The fiscal quarter ended April 29.
The increase in sales was the result of comparable-store sales growth of 4.3% and incremental sales from new and acquired stores, according to the company. During the quarter, Mattress Firm acquired 92 stores, opened 56 new stores and closed eight, bringing the total number of company-owned stores to 1,365.
Net income for the first quarter was $7.7 million. Earnings per share were $0.22.
Income from operations during the first quarter was $15.4 million. Excluding $4.6 million of costs related to enterprise software implementation, acquisitions and debt amendment, adjusted income from operations was $20 million, a decrease of $3.8 million—or 16%–over the prior-year quarter.
Adjusted operating margin during the quarter was 6%, as compared with 8.6% in the first quarter of 2013.
During the quarter, Mattress Firm completed the acquisition of two franchisees at a cost of $15.5 million, and the acquisition of mattress retailer Sleep Experts at a cost of about $65 million. In April, the company announced it would acquire the entire assets and operations of Mattress Liquidators Inc., owner of about 75 Mattress King and BedMart storefronts, in Colorado and Arizona, respectively.
Mattress Firm updated its financial guidance for fiscal 2014, raising its revenue outlook to reflect the anticipated effect of recently announced acquisitions. Net sales are expected to range from $1.5 billion to $1.56 billion. It reaffirmed its full-year adjusted earnings per share guidance of $1.88 to $2.00.
“Our strategy of driving sales during our first fiscal quarter resulted in approximately 21% total sales growth and a 4.3% comparable-store increase, which represented our third straight quarter of positive same-store sales,” said Steve Stagner, Mattress Firm president and chief executive officer. “With an accelerated infrastructure build-up to support additional store growth and the recent unprecedented level of condensed product changes to our floor materially behind us, we are focused on improving our EPS performance as we move through the year. Initial consumer acceptance of the new products, coupled with a focused and well-prepared sales team, helped generate strong sales momentum over the Memorial Day holiday. Furthermore, we are excited to have added 148 stores through organic growth and acquisitions during the first quarter, which fortifies our presence in key markets. We believe that our steady growth, together with an increasingly streamlined organization, will continue to enhance our operations and drive margin improvement, further solidifying our position as the nation’s leading bedding specialty retailer.”