SCC Q2 revenue up 16%
TORONTO – Sleep Country Canada (SCC), this country’s largest retailer of mattresses and related sleep products, has reported revenue increases of 15.9% for the second quarter of 2019, even though same store sales slowed by more than half when compared to the same period of last year and earnings were somewhat impacted by its recent acquisition of Endy, the online mattress specialist.
Revenue for the three months ending 30 June 2019 were $166.6 million, up 15.9% from $143.7 million for the same period in 2018. Same store sales were u 1.9%, down from 4.4% for the second quarter last year.
Mattress sales were up 15% to $133.7 million, compared to $115.8 million last year.
However, the sale of accessories – ranging from linens and pillows to mattress protectors – grew 17.9% to $32.9 million from $27.9 million the prior year.
The adoption of new accounting principals meant SCC recast some of its 2018 sales and earning figures.
Adjusted net income was $12.5 million or 33 cents per share, compared to $12.8 million or 34 cents per share for the comparable period – down 2.1% on a per share basis. The company attributed the decline to incremental expenses incurred with the acquisition of Endy last December.
During the second quarter, SCC opened six new stores – including the 60th Dormez-vous store in Quebec – and renovated eight others.
“We are pleased with our Q2 results as we continue to see our long-term strategic investments grow our market share. Highlights from this quarter include solid performance from our existing and new store network, tremendous e-commerce growth fueled by our family of three brands, another quarter of accelerated growth in our accessories business, promising progress on our cloud-based Oracle eCommerce platform and ERP, and exposure to an expanding customer base resulting from new partnerships, such as Walmart and Urban Barn,” SCC chief executive officer David Friesema said in a statement.
“It is clear that our omnichannel strategy is working, and we look forward to expanding our reach and forming new partnerships that resonate with Canadians,” he added. “Our diverse product assortment and omnichannel accessibility were well-received by our loyal core and new customers. The continued expansion of our sleep accessory selection positions us to continue to take share in this attractive and fragmented market.”
For the six months also ending 30 June 2019, SCC revenues increased by 13.2% to $315.9 million from $279.0 million for last year’s comparable period.
Growth was driven by the addition of 15 new stores since June 30, 2018, continued accessories product expansion and an increased omni-channel footprint – the addition of Endy – but was partially offset by a same store sales decline of 0.7%.
Mattress revenue increased by 12.6% to $252.4 million compared to $224.1 million for the first half of 2018, while accessories revenue grew 15.8% to $63.5 million from $54.9 million.
Adjusted net income for the first six months of 2019 was $21.2 million or 57 cents per share, compared to $24.4 million or 66 cents per share a year ago – a drop of 13.6% on a per share basis.
Sleep Country Canada Holdings operates three retail banners including Sleep Country, Dormez-vous? and Endy, this country’s largest online mattress-in-a-box retailer. As of 31 July 2019, it operated 274 stores and 17 distribution centres across Canada.