Houston-based sleep shop chain Mattress Firm reported a net loss for the first quarter of 2016, ended May 3, of $119 million, compared with a net profit of $5.5 million in the prior-year quarter.
Adjusted earnings per share declined $0.17. First-quarter net sales rose to $839.4 million, a 49.2% increase compared with the prior-year quarter. The increase reflected incremental sales from acquired and new stores and was partially offset by a comparable-store sales decline of 1.1%, for the quarter.
Mattress Firm said it had lowered its guidance for the year, expecting to finish 2016 with an earnings loss between $1.57 and $1.62 per share, and same-store sales growth of 1% to 2%.
In the first quarter, it opened 85 new stores, acquired 1,065 and closed 37, ending the period with 3,472 stores.
The company said that during the next 18 months it will rebrand all stores operating under different brand names to Mattress Firm.
“We are disappointed in our first-quarter results, as we experienced unrelated challenges in three primary areas,” said Steve Stagner, Mattress Firm executive chairman and chairman of the board. “These issues have been resolved and are largely behind us; however, there was clearly an impact to sales in Q1 that continued early into Q2. … Trends have returned to positive low-single digit comparable-store sales growth over Memorial Day and in the days since the holiday, inline with our revised guidance for the remainder of the year. This gives us additional confidence that we have put these obstacles behind us. Despite a challenging quarter, I am proud to say that our team worked tirelessly to move the organization past these challenges, and we are now better positioned to execute on our long-term strategy, as we build a national chain under the Mattress Firm brand.”