SCC earnings for 2020 jump 15% as sales climb 6.4%

TORONTO – Double-digit increased in its e-commerce business drove record fourth quarter 2020 sales and earning for Sleep Country Canada Holdings (SCC), this country’s largest sleep specialist reported last week.

Revenue for the three months ending 30 December 2020 was $248.9 million, up 33.4% from the $186.5 million recorded for the last three months of 2019. Same store sales rose a rocket-fueled 32.4%, far outpacing the 1.9% growth rate for the comparable period.

SCC reported e-commerce accounted for 20.1% of revenue for the fourth quarter – approximately $50 million – which was higher than the 18.1% for the third quarter and much higher than the pre-pandemic level of about 8%. However, no comparative data was provided.

The publicly held retailer said mattress sales for the quarter were $196.8 million, up 34.5% from the comparable period’s $146.2 million. Meanwhile, sales of accessories were pegged at $52.1 million, a 29.3% gain from $40.3 million.

Net income for the fourth quarter was $26.6 million or 72 cents per diluted share, compared to $14.0 million or 38 cents per diluted share – an uptick of 89.5% on a per share basis.

“Sleep Country’s exceptional Q4 results conclude the biggest quarter and year in our company’s 26-year history, with our strongest growth, profitability and cash flow. Our business showed remarkable resilience during this past year,” SCC president and chief executive officer Dave Friesema said in a statement.

“These outstanding results were achieved despite our store network being closed for 10.5% of operating days this quarter, including 65% of stores closed during Boxing Week – the most significant retail week in our calendar,” he added.

Revenue for the 12 months also ending 30 December 2020 was $757.7 million, up 6.4% from the $712.4 million rung-up for 2019.

E-commerce accounted for 21.4% of sales for the year, approximately $162.1 million.

Mattress sales were up 6.4% at $600.6 million, compared to $564.7 million. Accessory sales also climbed 6.4% to $157.1 million.

Net income for the year was $63.3 million or $1.71 per diluted share, compared to the prior year’s $55.5 million or $1.49 per diluted share – an uptick of 15.3% on a per share basis.

At the end of 2020, SCC operated some 281 stores and 17 distribution centres across the country, a net gain of five over 2019. It intends to add at least another six new stores to its network in 2021.

“We are better positioned for profitability, growth and market share expansion than ever before,” Friesema told shareholders. “Sleep Country's future is very bright as we continue to grow and optimize our enhanced model to help Canadians achieve their best sleep as a pillar of health and wellbeing.”

In addition to Endy, the country’s largest direct-to-consumer e-commerce mattress retailer, SCC operates the Dormez-vous brick-and-mortar banner in Quebec and Sleep Country across the rest of Canada.

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