SCC 3Q sales up 10%
TORONTO – Sleep Country Canada (SCC) continued to solidify its position as this country’s largest mattress retailer reporting upticks in overall revenue, earnings and same store sales for both the third quarter and 2017 year-to-date.
For the three months ending September 30, 2017, total revenues were $177.1 million, advancing 10.1% from the $160.8 million for the same period last year. Same store sales were up 7.3%, building on the 7.7% for 2016’s third quarter. The company maintained this was the 17th consecutive quarter for sales growth.
Net income for the period was $22.8 million or 61 cents per basic share, up from $21.4 million or 57 cents per share – an uptick of 7.0% on a per share basis.
Mattress sales climbed 11.5% during the quarter to $140.7 million. Meanwhile accessory sales – which include linens, pillows, bed frames, mattress protectors and similar items – were up 5.2% to $36.4 million.
“We are very pleased with our overall performance, both revenue and earnings, in this past quarter,” Sleep Country chief executive officer David Friesema said in a statement. “SSS (same store sales) of 7.3% exceeds the 3% to 6% long term guidance we gave two years ago when we went public. At the same time we successfully completed several major initiatives that we have been strategically planning for well over a year, and are very pleased with our position for future growth.
“The strategy to invest in e-commerce, our new Bloom brand, real estate, both stores and distribution centres, as well as our team was strengthened in 2017,” he continued, adding, “We are very pleased with the progress on ecommerce and Bloom since our launch in May. Our mattress-in-a-box brand, Bloom, is showing growth, and we are well positioned with our omni-channel offering to grow this category amidst a new competitive landscape. We remain laser focused on opportunities in this area as demonstrated by our advertising investment in this new brand.”
He also noted that over the past 12 months, Sleep Country has upgraded five of its distribution centres – including the new head office facility in the Greater Toronto Area. They have also opened two new stores in the third quarter and nine for the year-to-date.
For the nine months also ending September 30, 2017, total revenues were $434.5 million, up 11.9% from the $388.3 million last year.
Net income was $44.3 million or $1.18 per share, compared to $38.4 million or $1.02 per share – up 15.7% on a per share basis.
Mattress sales were up 13.1% to $345.3 million while accessory sales climbed 7.3% to $89.2 million.
“As we move into the last quarter of the year, we are trending ahead of our expectations in terms of new store openings and renovations,” Friesema said. “We plan to complete three more store openings in the fourth quarter, for a total of 12 for the year. We still see a strong market opportunity to continue this growth, targeting eight to 12 store openings per year for the foreseeable future.”
By the end of 2017, the company will also have renovated a total of 31 stores, putting them ahead of their projection of 20 to 30 stores a year.
“As consumer behaviour and the competitive landscape both continue to evolve at a rapid pace, we are very excited about the opportunities that this will have for our business,” Friesema continued. “In addition to having long tenured, well trained team that is passionate about sleep and providing great service, we remain focused on developing advertising strategies that capture consumers’ attention, inspire action and result in increased market share. To this end, the expansion of our online presence with a robust e-commerce platform brings with it additional long term benefits for the strength of our brand. We have amplified our digital marketing strategy given this new platform, as well as the launch of Bloom.
Completing the relocation of its distribution centres, he added also means the company is better positioned to deliver a better overall experience to the customer because of improved efficiencies and greater capacities.
At the end of September, the company had 244 stores and 16 distribution centres in operation across the country, including some 54 stores operating under the Dormez-Vous banner in Quebec.