− Net Sales Increased 50.7% on 3.8%
Comparable-store Sales Growth −− Expects Adjusted EPS of
Between $0.80 to $0.82 –− Reaffirms Midpoint of Full Year
Fiscal 2015 Sales, Adjusted EBITDA and Adjusted EPS Guidance
–− Will Host Third Fiscal Quarter Earnings Conference Call
on Monday, December 7th −
Mattress Firm Holding Corp. (the “Company”) (NASDAQ: MFRM), the
nation’s largest specialty mattress retailer, today reported
preliminary net sales and Adjusted EPS for the third fiscal quarter
(thirteen weeks) ended November 3, 2015. Net sales for the third
fiscal quarter increased 50.7% to $699.5 million, reflecting
comparable-store sales growth of 3.8% and the addition of new and
acquired stores. The Company expects third fiscal quarter earnings
per diluted share (“EPS”) on a generally accepted accounting
principles (“GAAP”) basis of $0.65 to $0.67, and EPS on a non-GAAP
adjusted (“Adjusted”) basis, excluding acquisition-related costs
and impairment and severance charges, is expected to be between
$0.80 and $0.82 per diluted share for the third fiscal quarter.
“We delivered strong results in the third quarter, with over 50%
net sales growth driven by our acquired stores, new stores, and our
3.8% same store sales growth,” stated Steve Stagner, chief
executive officer. “This represents our ninth consecutive quarter
of positive same store sales growth. We currently anticipate
reporting third quarter Adjusted EPS growth of 14% to 17%, in-line
with our expectations for the quarter. Our entire organization is
executing well and benefiting from the streamlined organizational
structure and management initiatives we have in place. We remain
focused on executing on our growth plan and creating value for our
shareholders through our relative market share strategy.”
Reported sales results and expected GAAP and Adjusted EPS are
preliminary and remain subject to adjustment until the filing of
the Company’s Quarterly Report on Form 10-Q with the U.S.
Securities and Exchange Commission. The Company expects to report
its finalized third fiscal quarter results on December 7, 2015.
Expected third fiscal quarter diluted EPS on a GAAP basis and
Adjusted basis are reconciled in the table below:
Third Fiscal Quarter Reconciliation of GAAP to Adjusted
EPS Thirteen Weeks
Ended October 28, 2014 November 3, 2015
GAAP EPS $ 0.45 $0.65 to $0.67 Acquisition-related costs (1) 0.18
0.14 ERP system implementation costs (2) 0.03 - Other (3)
0.04 0.01 Adjusted EPS *
$
0.70 $0.80 to $0.82 * Due to
rounding to the nearest cent, totals may not equal the sum of the
lines in the table above.
(1) Reflects the acquisition-related costs as
defined under U.S. GAAP, including advisory, legal, accounting,
valuation, and other professional or consulting fees and, in
addition, costs of integrating store and warehouse operations and
corporate functions.
(2) Reflects implementation costs consisting
primarily of training-related costs in connection with the roll-out
of the Microsoft Dynamics AX for Retail Enterprise Resource
Planning system ("ERP system").
(3) Reflects a loss on debt extinguishment
incurred in connection with the October 2014 refinancing of the
Company’s Senior Credit Facility related to the Sleep Train
acquisition. Reflects severance expense related to changes in
organizational structure recorded in October 2015.
Net Sales and Store Unit Information
The components of the net sales increase for the thirteen and
thirty-nine weeks ended November 3, 2015 were as follows (in
millions):
Progression in Net Sales
Thirteen Weeks Thirty-Nine Weeks
Ended Ended November 3, 2015
November 3, 2015 Net sales for prior year
period $ 464.3 $ 1,207.7
Increase (Decrease)
in Net Sales
Comparable-store sales 17.2 32.4 New stores 62.1 165.3 Acquired
stores 159.5 526.6 Closed stores
(3.6
) (8.9 ) Increase in
net sales, net
235.2
715.4 Net sales for current year period
$ 699.5 $
1,923.1 % increase 50.7 % 59.2 %
The activity with respect to the number of Company-operated
store units for the thirteen and thirty-nine weeks ended November
3, 2015 was as follows:
Thirteen Weeks Thirty-Nine
Weeks Ended Ended November 3, 2015
November 3, 2015 Store units, beginning of period 2,223
2,094 New stores 87 236 Closed stores (15 ) (35 ) Store units, end
of period 2,295 2,295
Financial Guidance for Fiscal Year 2015
The Company also reaffirmed the midpoint of its financial
outlook for sales, Adjusted EBITDA and Adjusted EPS for the full
fiscal year (52 weeks) ending February 2, 2016 (“fiscal year
2015”). This outlook is based on year-to-date results and
efficiency initiatives that have been recently implemented by
management. These projections are forecasts and are intended solely
to give investors an understanding of management’s expectations for
the full fiscal year based on recent business trends. The
projections do not take into account, or give effect for,
acquisitions that may be completed by the Company during the fiscal
year or any other events that are beyond the Company’s reasonable
control. Please refer to "Reconciliation of Reported (GAAP) to
Adjusted Statements of Operations Data" in the second quarter
earnings release dated September 11, 2015 for a reconciliation of
GAAP EPS to Adjusted EPS and other information which is not
calculated on a GAAP basis. Comparable-store sales growth for
fiscal year 2014 excludes incremental sales related to the 53rd
week of operations. Adjusted data for future periods reflects
management’s reasonable estimates of appropriate adjustments based
on historical experience. Percentage growth calculations in the
table below represent the midpoints of the guidance range
provided.
Fiscal 2015 % Growth (1)
Net Sales (in millions) $2,530 - $2,550
41% Adjusted EBITDA (in millions) $255 - $260
35% Adjusted EPS $2.33 to $2.42
17%
(1) Represents approximate growth from actual
results for the 53-weeks ended February 3, 2015 (excluding the
incremental sales impact of the 53rd week for purposes of
comparable-store sales growth), to the midpoint of the fiscal 2015
guidance.
Mattress Firm to Host Third Fiscal Quarter 2015 Earnings
Conference Call on December 7th
The Company will release finalized financial results for the
third quarter of the 2015 fiscal year before the market opens on
Monday, December 7, 2015.
The Company will host a conference call for investors and other
interested parties beginning at 8:30 a.m. Eastern Time on Monday,
December 7, 2015. The call will be hosted by Steve Stagner, chief
executive officer, Ken Murphy, president, Alex Weiss, chief
financial officer, and Scott McKinney, vice president of investor
relations.
The conference call will be accessible by telephone and the
Internet. To access the call, participants from within the U.S. may
dial (877) 705-6003, and participants from outside the U.S. may
dial (201) 493-6725. Participants may also access the call via live
webcast by visiting the Company's investor relations website at
ir.mattressfirm.com.
A replay of the call will be available beginning at
approximately 11:30 a.m. Eastern Time on December 7, 2015 through
approximately midnight Eastern Time on December 21, 2015. To access
the replay, the domestic dial-in number is (877) 870-5176, the
international dial-in number is (858) 384-5517, and the passcode is
13625562. An archive of the webcast will also be available on the
Company's website for a limited time.
Forward-Looking Statements
Certain statements contained in this press release are not based
on historical fact and are “forward-looking statements” within the
meaning of applicable federal securities laws and regulations. In
many cases, you can identify forward-looking statements by
terminology such as “may,” “would,” “should,” “could,” “forecast,”
“feel,” “project,” “expect,” “plan,” “anticipate,” “believe,”
“estimate,” “predict,” “intend,” “potential,” “continue” or the
negative of these terms or other comparable terminology; however,
not all forward-looking statements contain these identifying words.
The forward-looking statements contained in this press release,
such as those relating to our net sales, GAAP and Adjusted EPS and
net store unit change for fiscal year 2015 and any anticipated
effects of any recent acquisitions, are subject to various risks
and uncertainties, including but not limited to downturns in the
economy; reduction in discretionary spending by consumers; our
ability to execute our key business strategies and advance our
market-level profitability; our ability to profitably open and
operate new stores and capture additional market share; our
relationship with our primary mattress suppliers; our dependence on
a few key employees; the possible impairment of our goodwill or
other acquired intangible assets; the effect of our planned growth
and the integration of our acquisitions on our business
infrastructure; the impact of seasonality on our financial results
and comparable-store sales; our ability to raise adequate capital
to support our expansion strategy; our success in pursuing and
completing strategic acquisitions; the effectiveness and efficiency
of our advertising expenditures; our success in keeping warranty
claims and comfort exchange return rates within acceptable levels;
our ability to deliver our products in a timely manner; our status
as a holding company with no business operations; our ability to
anticipate consumer trends; risks related to our primary
stockholder, J.W. Childs Associates, L.P.; heightened competition;
changes in applicable regulations; risks related to our franchises,
including our lack of control over their operation and our
liabilities if they default on note or lease obligations; risks
related to our stock and other factors set forth under “Risk
Factors” in our Annual Report on Form 10-K for the fiscal year
ended February 3, 2015 filed with the Securities and Exchange
Commission (“SEC”) on April 3, 2015 and our other SEC filings.
Forward-looking statements relate to future events or our future
financial performance and reflect management’s expectations or
beliefs concerning future events as of the date of this press
release. Actual results of operations may differ materially from
those set forth in any forward-looking statements, and the
inclusion of a projection or forward-looking statement in this
press release should not be regarded as a representation by us that
our plans or objectives will be achieved. We do not undertake to
publicly update or revise any of these forward-looking statements,
whether as a result of new information, future events or
otherwise.
Non-GAAP Financial Measures
Adjusted EPS and the other “Adjusted” data provided in this
press release are considered non-GAAP financial measures. We report
our financial results in accordance with U.S. GAAP; however,
management believes evaluating our ongoing operating results may be
enhanced if investors have additional non-GAAP basis financial
measures to facilitate year-over-year comparisons. Management
reviews non-GAAP financial measures to assess ongoing operations
and considers them to be effective indicators, for both management
and investors, of our financial performance over time. Our
management does not advocate that investors consider such non-GAAP
financial measures in isolation from, or as a substitute for,
financial information prepared in accordance with U.S. GAAP.
About Mattress Firm
With more than 2,400 company-operated and franchised stores
across 41 states, Mattress Firm Holding Corp. (MFRM) has the
largest geographic footprint in the United States among multi-brand
mattress retailers. Founded in 1986, Houston-based MFRM is the
nation's leading specialty bedding retailer with over $2.5 billion
in sales over the past 12 months. MFRM, through its family of
brands, including Mattress Firm and Sleep Train, offers a broad
selection of both traditional and specialty mattresses, bedding
accessories and other related products from leading manufacturers,
including Sealy, Tempur-Pedic, Serta, Simmons, Stearns &
Foster, and Hampton & Rhodes. More information is available at
www.mattressfirm.com. MFRM's website is not part of this press
release.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151130006164/en/
Mattress Firm Holding Corp.Investor Relations
Contact:Scott McKinney, 713-328-3417Vice President of Investor
Relationsir@mfrm.comorMedia Contact:Kimberly Wise,
214-646-1659kwise@jacksonspalding.com
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