Highlights From Mattress Firm's Q3 Earnings Conference Call
Mattress Firm Holding Corp (NASDAQ: MFRM) reported that it earned $0.82 per share on revenue of $699.5 million in its third quarter. The company's top and bottom lines were better than expected, as Wall Street analysts were looking for an earnings per share of $0.81 on revenue of $660.6 million.
Following the company's quarterly results, the company's CEO Stephen Stagner hosted a conference call to discuss its performance in the quarter and outlook.
Here are some of the highlights.
Related Link: Mattress Firm Tops Q3 Expectations
Third Quarter In Review
Third-quarter net sales grew over 50 percent, while adjusted EBITDA grew 41 percent.
Comparable store sales grew 3.8 percent, marking the ninth consecutive quarter of positive comparable store sales performance.
The strong comps were driven by a 3.9 percent increase in average unit price from the first half of 2015.
As a percentage of sales, gross profit fell 160 basis points from a year ago to 37.8 percent.
The company's effective income tax during the third quarter on a GAAP basis was 36.6 percent and the full year effective adjusted tax rate of 37.7 percent is below 2014's rate of 39.5 percent.
Seventy-two (72) new stores were opened, bringing the company's total store count to 2,295.
Outlook And Guidance
The company plans on focusing more on selling exclusive products that generate higher margins.
By converting Mattress Discounters and Mattress Pro stores to other banners, the company expects to see its advertising expenditures drop.
The company expects to see continued weakness in oil affected markets, which make up about 8 percent of the total store base.
Notable Quotes
Stagner recapping the third quarter performance stated, "We delivered a strong third quarter that was right in line with our expectations. Our recently streamlined organization executed nicely on our plan."
On the company's recent $780 million acquisition of Sleepy's, Stagner commented, "The acquisition of Sleepy's will mark an important milestone in the Mattress Firm journey to build the nation's first national mattress specialty retailer, by expanding our retail store network into key geographies in the Northeast and providing the benefits of additional scale."
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