Mattress Firm Holding Corp., the parent of Houston-based sleep shop chain Mattress Firm, reported net income of $5.5 million, a 29% decrease compared with the first quarter of 2014. Net sales increased 68.7% to $562.6 million and reflect comparable-store sales growth of 1.3% and incremental sales from new and acquired stores.
First quarter earnings per share, using generally accepted accounting principles, were $0.15. Adjusted EPS, excluding acquisition-related costs, ERP software implementation costs and secondary offering costs, were $0.33, Mattress Firm said.
The retailer opened 78 new stores and closed nine in the first quarter, bringing the total number of company-operated stores to 2,163.
Income from operations was $18.8 million. Adjusted income from operations was $29, million, a 45% increased compared with the prior-year quarter. Adjusted operating income margin was 5.2% of net sales, a 13% decrease compared with first-quarter 2014.
The company increased its sales guidance range by $20 million primarily as a result of the anticipation of 20 incremental net new stores and reaffirmed its adjusted EPS financial guidance for the full year of $2.50 to $2.70.
“We are pleased our dedicated organization delivered 68.7% net sales growth and our seventh consecutive quarter of positive comparable-store sales, as we continue to navigate a period of extraordinary integration of multiple acquisitions,” said Steve Stagner, Mattress Firm chief executive officer. “As we had anticipated and previously communicated, our operation of the Chicago market in the first quarter impacted our results as we worked to convert the stores, leading to an approximate loss of $0.07 per diluted share, excluding acquisition-related costs. Once we converted the majority of the signs in our Chicago market prior to Memorial Day, we saw an immediate and now sustained lift in sales as expected.
“On the West Coast, our Sleep Train business has continued to outperform our expectations and we remain highly confident that we can achieve the synergy targets of $20 million over three years that we identified previously,” Stagner added. “Furthermore, results from the Memorial Day holiday demonstrate that we have built solid sales momentum that we expect to continue, which further validates our relative market share strategy that over time creates long-term shareholder value.”
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