Mattress Firm Net Skies by 23.3 Percent in Q1
HOUSTON-Bolstered by sales gains from stores acquired last year, Mattress Firm enjoyed a 23.3 percent increase in net income in its fiscal first quarter, to $12 million.
Sales from Mattress Giant stores that were purchased in May of last year helped fuel Mattress Firm's total net sales by 31.5 percent to $276 million in the quarter, which ended on April 30. In a conference call yesterday to financial analysts, Steve Stagner, the retailer's president and CEO, said these stores delivered a 38 percent growth in year-over-year sales. In addition, Stagner noted that Mattress Firm opened 46 new stores in the first quarter, elevating its total store count to almost 1,100 units.
Same-store sales fell 5.2 percent in the quarter, which Stagner attributed to a slowdown in traffic and a decline in average unit selling price. He also noted that the acquired Mattress Giant stores, because this purchase was closed after last year's first quarter, were not part of the company's comparable-store base. One cause for the downward trend in traffic was "the sharp reduction in advertising by the bedding manufacturers over the recent quarter," Stagner said.
First-quarter gross margin was down 150 basis points to 37.8 percent. Operating expenses jumped 26.4 percent in dollars but fell back 120 basis points as a percentage of sales to 30.1 percent.
The outlook for the remainder of this fiscal year is positive, Stagner told the analysts. Along with the former Mattress Giant locations joining the comparable-store base, "we expect overall trends to improve starting with the summer selling season, as we begin to anniversary some weaker comparable-store sales for the balance of the year, the bedding manufacturers ramp up their advertising and we receive the benefit of selling the new and innovative beds featured on our floors," he said.