Mattress Firm Posts $17.4 Million Net Income in Q4, Deals for Mattress Giant
HOUSTON-Reversing a net loss from last year's fourth quarter, Mattress Firm recorded net income of $17.4 million in the fourth quarter of this year.
The company also said it has signed an agreement to acquire the assets of Mattress Giant, another specialty mattress retailer, for $47 million. The deal, which is expected to close some time in the fiscal second quarter, will increase Mattress Firm's store count by 180, adding stores in Texas and Florida, boosting Mattress Firm's overall store count to more than 900. All of the Mattress Giant stores will be renamed Mattress Firm and will be merchandised with Mattress Firm's product offerings.
Mattress Firm had purchased 55 Mattress Giant stores in Atlanta, St. Louis and Minneapolis in November 2011.
The company's bottom-line performance in the fourth quarter, which ended on Jan. 31, brought net income for the fiscal year as a whole to $34.4 million, up from $349,000 in fiscal 2011. Net sales for the fourth quarter rose 48 percent to $188.6 million, including a jump of 24.8 percent in same-store sales. For the year, net sales increased 42 percent to $703.9 million, including a 20.5 percent increase in same-store sales.
Steve Stagner, Mattress Firm's CEO, credited the growth in comparable-store sales for setting the stage for the company's strong fiscal performance. Noting that 2011 marked a solid improvement overall in the mattress market, Stagner said, "We believe pent-up consumer demand and product innovations are driving customers to the market."
Gross margin in the quarter gained 333 basis points to close at 40.2 percent. Operating expenses were up 46 percent but dropped 52 basis points to 32.8 percent.
Commenting on the Mattress Giant acquisition, Stagner said, "By acquiring these stores, which historically have represented the best-performing locations in Mattress Giant's system, we immediately strengthen our ability to capture additional sales and better serve the customer."