Mattress Firm Net Climbs 45.6 Percent in Q3
HOUSTON-With sales rising from both existing and recently acquired stores, Mattress Firm logged a 45.6 percent gain in third-quarter net income, which totaled $18.1 million.
Total net sales in the quarter, which ended on Oct. 29, were $326.2 million, up 17.7 percent and including a gain in same-store sales of 2.9 percent. Speaking yesterday in a conference call to financial analysts, Steve Stagner, Mattress Firm's president and CEO, said the company's acquired stores, including former Mattress Giant locations purchased in May 2012, delivered same-store sales growth of 15 percent in the quarter.
Stagner also said the retailer's upward top-line trend owes to sales initiatives put in place in response to pressure from consumer spending trends: first, a greater emphasis on unit capture and market-share gain through increased transactions; second, a more aggressive approach on a number of select price points; and third, broadening the availability of third-party consumer financing.
Stagner acknowledged that the effort to capture additional units did have an impact on gross margin, which fell 110 basis points to 38.6 percent in the quarter. Selling, general and administrative expenses rose 8.2 percent in dollars but fell back 250 basis points as a percentage of sales, to 29.4 percent.
During the conference call, James Black, Mattress Firm's executive vice president and chief financial officer, said the company expects fourth-quarter same-store sales to finish with an increase in the mid- to high single digits. Full-year total sales are expected to increase 21 percent over the prior fiscal year, Black said.