|Mattress Firm third-quarter snapshot|
|Net sales||$464.3 million|
|Net income||$15.6 million|
|Earnings per share||$0.45|
Mattress Firm Holding Corp., the parent of Houston-based bedding retailer Mattress Firm, reported third-quarter net sales of $464.3 million, a 42.3% increase compared with the third quarter of 2013, reflecting comparable-store sales growth of 8.5%, and incremental sales from new and acquired stores. During the quarter, the company completed the acquisition of a number of mattress retailers, including Mattress Discounters, Back to Bed, Bedding Experts, Mattress Barn, as well as Sleep Train Inc. and all of its subsidiaries.
Net income declined to $15.6 million, a 13.9% drop compared with the third quarter of 2013. Earnings were impacted by acquisition-related costs, an enterprise software implementation and other expenses, Mattress Firm said.
Earnings per share using generally accepted accounting principles (GAAP) for the third quarter were $0.45; excluding one-time items, adjusted EPS for the quarter was $0.70.
In the third quarter, the company opened 54 new stores, closed eight and acquired 460, bring its total store count to 1,986.
Gross margins were 39.4%, compared with 38.6% in the same quarter of 2013. Total operating expenses as a percent of sales were 32.9%, compared with 29.4% in the prior-year quarter.
For the full year, Mattress Firm raised its sales outlook from $1.55 – $1.59 billion to $1.77 – $1.79 billion.
“The increase in net sales … reaffirms the validity of the relative market-share strategy,” said Steve Stagner, Mattress Firm chief executive officer. “Furthermore, the integration of the Sleep Train and Back to Bed operations continues to progress, providing us with the confidence that our company will derive further benefits from our deliberate strategic growth initiatives. We expect to realize such benefits relatively quickly in the case of Sleep Train, but over time from the Back to Bed operations, as we will need to work through the immediate drag period, which is typical with all of our acquisitions that require the rebranding of stores. We estimate that our entry into and operation of the Chicago market in the third quarter resulted in an approximate loss of $0.03 per diluted share, excluding acquisition-related costs.
“We remain steadfast in our commitment to pursuing the relative market share strategy and creating value for our shareholders as we expand our presence as the leading national mattress specialty retailer,” Stagner added.
On Nov. 5, Mattress Firm entered into an agreement to purchase retailer Sleep America in Arizona. That deal is expected to close in the fourth quarter.