Mattress Firm Q1 Net Drops on Rising Costs

Mattress FirmHOUSTON-Increased expenses trumped a healthy gain in sales to drive down Mattress Firm's first-quarter net income by 35.7 percent, to $7.7 million.

Selling, general and administrative expenses were up 28.3 percent in dollars and 185 basis points as a percentage of sales, to 31.9 percent. During the quarter, which ended on April 30, Mattress Firm incurred extra costs from the implementation of an enterprise resource planning system; the acquisitions of company franchisees Yotes and Southern Max, along with the acquisition of Sleep Experts Partners; and the amendment of its senior credit facility to help fund these purchases. In addition, Mattress Firm's gross margin fell 160 basis points to 36.2 percent.

Net sales jumped 20.9 percent to $276 million, including a same-store sales gain of 4.3 percent. The key driver was sales of conventional mattresses, which climbed 34.6 percent. Steve Stagner, Mattress Firm's president and CEO, said the first quarter marked the third straight quarter of an increase in same-store sales.

Looking ahead, Stagner said the company's infrastructure buildup and recent product changes position Mattress Firm for further growth. In addition, the 148 stores the company added through organic growth and acquisitions "fortifies our presence in key markets," he said. "We believe that our steady growth, together with an increasingly streamlined organization, will continue to enhance our operations and drive margin improvement, further solidifying our position as the nation's leading bedding specialty retailer."

HFN Staff | News & Commentary

HFN provides detailed information on the key home classifications: Housewares, Tabletop, Floor Covering & Rugs, Furniture, Home Textiles, Lighting, Home Decor, Mattresses & Bedding, Gifts, Major Appliances and Consumer Electronics as well as Business, Finance and Retail.

Videos

  • Patti Carpenter Talks Color and its Importance in the Home

    Camera Icon   More Videos

Subscribe to
HFN Omnichannel
Receive the news you need to know about the trends in the industry delivered right to your inbox.

Current Issue

  • HFN August 2017 cover

    HFN's DIGITAL EDITION

    August 2017


    COVER STORY: Sharpening the Focus on Millennials

    Find out what makes Millennials tick when it comes to home decorating, shopping and at-home entertaining with HFN's annual consumer study. Turns out, Millennials favor the in-store shopping experience.


    ALSO IN THIS ISSUE:

    • Power of the People - Crowdfunding campaigns provide needed capital, feedback for home and housewares product launches.
    •  Omnichannel Retailing: Visual Search Takes Off - Learn how voice and visual search are revolutionizing product discovery.