Mattress Firm Net Accelerates in Second Quarter; Company to Acquire Mattress X-press
HOUSTON-Fueled by a huge leap in sales, net income for Mattress Firm rose 177.4 percent in the second quarter ending July 31, totaling $10.1 million.
The mattress specialty retailer also continued on its acquisition trail, agreeing to purchase the assets of Mattress X-press. When finalized, the deal will further enlarge Mattress Firm's store count by 35, with 30 stores in South Florida and five in Georgia. The closing is expected to take place some time in this fiscal quarter.
Net sales in the second quarter rose 45.6 percent to $262 million, including a same-store sales gain of 5 percent. Along with the comparable-store increase, the company logged incremental net sales of $75.3 million from the opening of new stores and the addition of stores acquired since last year's second quarter.
Gross margin fell 30 basis points to 39 percent, due in part to costs related to the acquisition of Mattress Giant which boosted cost of goods sold by 50 basis points. That acquisition also increased selling, marketing, general and administrative expenses through the extra costs of the transaction, of retraining Mattress Giant personnel and from duplicate costs of the Mattress Giant corporate office. SG&A rose 49.4 percent in dollars and 90 basis points as a percentage of sales, to 32.8 percent.
Steve Stagner, Mattress Firm president and CEO, said the second-quarter performance "reaffirms that our core strategy of further penetrating our existing markets concurrently with expanding into new markets is driving market share and profitability."
Once the Mattress X-press acquisition is done, the Mattress X-press stores will be rebranded as Mattress Firm stores.