Mattress Firm's 4Q net income down on charges

Mattress Firms' 4th-quarter profit down on acquisition costs but issues solid forecast

Associated Press

HOUSTON (AP) -- Mattress Firm Holding Corp. reported Tuesday that its fourth-quarter net income fell sharply on costs for a recent acquisition, but it forecast a solid year ahead with help from the newly acquired stores.

The Houston company bought Factor Mattress & Water Bed Outlet of Charlotte Inc. for $11.4 million in a deal that closed in December. The company is in the process of rebranding the 27 former Mattress Source stores owned by the company as Mattress Firm stores.

Mattress Firm opened 30 new stores and closed 11 during the quarter as well, bringing its total base to 1,057 stores.

The company earned $7.6 million, or 22 cents per share, for the period that ended Jan. 29. That's down from $17.4 million, or 56 cents per share, in the same quarter last year. After adjusting for $2.4 million of acquisition-related costs, impairment charges and other expenses, it earned 30 cents per share in the most recent period.

Its total net revenue increased 37 percent to $258.2 million with help from new and acquired stores. Its revenue at stores open at least a year, considered a key indicator of performance as it excludes recently opened or closed stores, fell 1.6 percent.

The quarter's results fell short of market expectations. Analysts polled by FactSet were expecting the company to earn 32 cents per share on revenue of $262.1 million.

Mattress Firm President and CEO Steve Stagner said fiscal 2012 was a record year for the company and with the integration of the acquired stores substantially complete, it expects to make gains in the current year.

The company forecast earnings of $1.90 to $1.98 per share on an adjusted basis for the current fiscal year on revenue between $1.24 billion and $1.25 billion. Analysts were anticipating earnings of $1.96 per share on revenue of $1.21 billion.

Shares added 23 cents to $31.25 in after-hours trading on the news. Its stock had fallen $1.15 to close regular trading at $31.02.

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