SCC racks up record 2017
TORONTO – Sleep Country Canada successfully defended its position atop the leader board as this country’s largest mattress specialty retailer, recording upticks in revenue, earnings and same store sales for both the fourth quarter and the full 2017 calendar year. The publicly-held specialist added 12 stores to its nationwide network during the year.
Revenue for the three months ending December 31, 2017, grew 13.4% to $153.6 million from $135.4 million for the fourth quarter of 2016.
The company attributed the advance to same store sales growth of 9.3% and the addition of 12 new stores since the year began. Spending on advertising also increased 7.8% during the period to $8.3 million (although as a percentage of sales, the ad spend fell to 5.3% from 5.7% the prior year). Sleep Country also opened three new stores and renovated or relocated another 10 units during the period.
Both product segments – mattresses and accessories – saw year-over-year improvements with mattress sales climbing 13.9% to $122.7 million from $107.7 million. Meanwhile, sales of accessories – which includes pillows, mattress pads, sheets, duvets, headboards, footboards and platform furniture – were up 11.2% to $30.9 million from $27.8 million.
Net income was $14.8 million or 39 cents per share, compared to $11.2 million or 30 cents per share for the comparable period in 2016 – a 30% leap on a per share basis.
“We are very pleased with our achievements in the fourth quarter and for the year as a whole,” Sleep Country president and chief executive officer David Friesema said in a statement.
“Our performance in Q4 was enhanced by our increased marketing spend in the second half of the year and our strategic initiatives throughout the year,” he continued, adding, “In 2017, we also launched our e-commerce platform, completed the relocations of four largest distribution centers, opened 12 new and renovated 31 stores, and launched our mattress-in-a-box brand, Bloom. The success of these strategies is evident in our overall 2017 financial performance and reinforces the direction that we plan to continue into 2018.”
For the year ended December 31, 2017, revenue was $588.0 million, up 12.3% from $523.8 million in 2016, driven primarily by an 8.8% uptick in same store sales.
Mattress sales were up 12.9% to $474.6 million and accessory revenue increased by 9.7% to $113.4 million.
Net income for 2017 was $59.1 million or $1.57 per share, up from $49.6 million or $1.32 per share in 2016 – an increase of 18.9% on a per share basis.
“Throughout 2017 we delivered strong financial performance and supported that growth with strategic investments resulting in exceptional results,” said Friesema. “As we enter into 2018, we plan to execute on our ongoing objectives by continuing to grow our market share, and exploring new opportunities while improving our current customer experience to drive SSS (same store sales) growth.”
The company also plans to renovate between 25 and 30 stores this year.
“To further strengthen our presence across Canada, we intend to open eight to 12 stores per year in 2018 and for the foreseeable future,” Friesema added. “In addition to enhancing and expanding our brick-and-mortar presence, we will continue to invest in, and explore new opportunities for our e-commerce platform starting with the expansion of our Bloom mattress-in-a-box line up which will feature three new mattresses.”
He also noted Sleep Country’s 19% increase in advertising spending translated in significant revenue and same store sales growth. These investments will continue in 2018 with emphasis given to the company’s e-commerce initiatives and the growth of its Bloom brand of mattresses.
“Advertising has proven to be one of Sleep Country's most powerful growth drivers and with the support of a new advertising agency, we have begun the process of refreshing our accessories marketing materials, creating strategies to support the launch of new products and driving further sales through our e-commerce platform,” Friesema said, adding, “As Canada's leading specialty mattress retailer, we enter into 2018 as a highly competitive company that is continuously improving its existing business model, thoughtfully expanding its offering and aggressively acting on opportunities.”
At the end of 2017, Sleep Country Canada Holdings operated 194 stores and 14 distribution centres under the Sleep Country Canada banner in every province across the country except for Newfoundland & Labrador as well as 53 stores and two distribution centres under the Dormez Vous banner in the province of Quebec.