SCC sales climb again
TORONTO – Sleep Country Canada Holdings, the publicly-held parent company of this country’s largest specialty mattress retailer, reported its 20th consecutive quarter of growing sales and earnings saying both total unit sales and average ticket price were up while same store sales also increased by respectable margins.
For the three months ending 30 June 2018, the company said revenue was $143.7 million, up 8.1% from the $132.9 million for the second quarter of 2017. Same store sales climbed 4.4%, building on the 7.5% garnered during the comparable period.
Mattress sales were up 6.3% at $115.8 million for the period while accessory revenue gained 13.7% to $27.9 million.
During the period, the company renovated nine stores and opened six new stores, including Spruce Grove, Alberta; Richmond, British Columbia; and, North York, Ontario under the Sleep Country banner and Anjou, Quebec under Dormez-Vous.
Net income was $12.3 million or 33 cents per share, compared to $11.3 million or 30 cents per share – an uptick of 10% on a per share basis.
“This most recent quarter marked our 20th consecutive quarter of impressive growth,” chief executive officer David Friesema said in a statement. “Much of our growth was driven by two of our largest strategic initiatives: first, increasing mattress units sold, with a focus on growing our market share in the below $1,000 price category. Our pricing analysis, and the fact that our mattress average unit selling price actually increased in the quarter clearly indicates that we attracted more customers and expanded our base. Secondly, increasing our awareness as a sleep accessory retailer. Q2 saw a marked increase in customer visits to buy accessories only.
“We experienced weak traffic in April as reported by other retailers, however this was offset by solid store traffic in May and June, he continued. “All other KPI’s (key performance indicators) were positive for the quarter. Of particular importance we experienced accelerated mattress unit growth even in comparison to 2017.”
For the six months also ending 30 June 2018, total revenues were $279.0 million, up 8.5% from the $257.1 million for the first half of 2017. Same store sales were up 4.7%.
During the period the company renovated 20 stores and opened nine new stores while mattress sales increased 7.5% to $224.1 million and accessory revenue climbed to $54.9 million – an uptick of 12.7%.
Net income was $22.6 million or 61 cents per share compared to $21.6 million or 57 cents per share a year ago, up 7.0% on a per share basis.
Looking ahead, Friesema was enthusiastic about Sleep Country’s continued performance.
“We enter the second half of 2018 in a strong position to execute on our objectives for the year,” he said. “Last quarter we revised our estimate for store openings, guiding to a minimum of 15 new stores in 2018. With six months left in the year, we are able to commit to opening 17 stores this year but continue our future guidance at eight to 12 stores per year in 2019 and beyond.
“We are continuing to expand our mall store initiative and will have seven mall locations by the end of the year,” he continued. “Our financial flexibility has allowed us to increase our planned store openings for the year and take advantage of the favourable location opportunities.”
In early July, Sleep Country opened a store in the West Edmonton Mall, reputedly the largest shopping centre of its kind in the country and one of the biggest in North America.
At the second of the first half, Sleep Country Canada Holdings operated 256 stores and 16 distribution centres across the country, employing two banners: Dormez-Vous in Quebec and Sleep Country Canada in every other province, except Newfoundland & Labrador, where it has no presence.