SCC 1Q sales up 8.9%
TORONTO – Sleep Country Canada continued to post revenue increases during the first quarter of 2018, driven by upticks in both same store sales and store count. Sales were up for both mattresses and accessories. Earnings, however, were flat on a year-over-year basis.
For the three months ending 31 March 2018, revenue was $135.3 million, up 8.9% over the $124.2 million recording for the first quarter of 2017. Same store sales climbed 5.1% and this country’s largest mattress specialist opened 13 new stores during the period.
In its earnings announcement, the company it was the 19th consecutive quarter of same store sales growth.
Mattress revenue climbed 8.2% to $108.3 million – from $100.1 million for the comparable period. Meanwhile, accessory sales were $27.0 million, an 11.5% gain over $24.1 million.
The company noted the mattress industry is affected by seasonality with first quarter sales typically being the lowest during the year. On average over the past three years, Sleep Country has generated 20% of its revenue in the first quarter.
Net income for the three months ending 31 March 2018 was at $10.3 million or 28 cents per share, relatively unchanged from $10.3 million or 27 cents per share for the comparable period.
“Our investment in marketing during Q1 grew traffic, increased conversion in our stores, and produced increases in both mattress and accessory revenue. We plan to continue these investments in Q2 to capitalize on the seasonally stronger quarters ahead,” Sleep Country president and chief executive officer David Friesema said in a statement.
The company reported media and advertising expenses increased by $1.5 million. Approximately $1 million of the increase was attributable to an increase in its digital marketing spend to drive online traffic as well as for higher fees costs associated with the appointment of a new advertising agency.
“Our enhanced digital advertising resulted in strong growth in traffic on our e-commerce web site in Q1 and we will also continue to grow our digital advertising in future quarters,” Friesema said, adding, “Our omni-channel business will also be accelerated with three or four new mattress-in-a-box offerings being introduced starting in Q2.”
Sleep Country will also up the number of new stores to be opened in 2018 to at least 15, with an additional eight to twelve stores slated for 2019. “Also, with 14 store renovations completed to date, we are confident that we will achieve our 25 to 30 renovations in 2018,” Friesema noted. “This is particularly exciting as our renovated stores continue to outperform the growth of our legacy stores.”
At the end of March, Sleep Country operated 250 stores across Canada, including 54 operating under the Dormez-Vous banner in Quebec, as well as 16 distribution centres.