Sleep Country reports sales, earnings decline in first quarter

26 May 2023 Michael J. Knell

TORONTO – Sleep Country Canada Holdings (SCC), parent to this country’s largest physical and digital retailers of mattresses and related sleep products, reported only a slight decrease in overall revenue for the first quarter of 2023.

For the three months ended March 31, 2023, the publicly held company said revenue fell 0.3% to $206.5 million from $207.0 million for the same period last year.

The decrease was attributed to a 6.2% decline in same store sales, which was partially offset by incremental revenue earned from Silk & Snow – the e-commerce specialist it acquired on January 1, 2023 – as well as the net one new store opened during the quarter and an increase in its average unit selling price (AUSP).

Sleep Country Canada said revenues for the first quarter of 2023 slid 0.3% over the same period last year while earnings declined 34%. However, e-commerce sales climbed 7% to an estimated $46 million. E-commerce accounted for 22.3% of revenue in the first quarter, up from 20.8% during the first three months of 2022. In dollar terms, that’s a 7.0% jump from roughly $43.0 million in 2022 to approximately $46.0 million this year.

Mattress sales for the period were $155.4 million, down 2.1% from $159.0 million while accessories accounted for $51.1 million – up 6.5% from $48.0 million.

Net income was $11.3 million or 33 cents per share, compared to $18.5 million or 50 cents per share – a decline of 34.0% on a per share basis.

“For the first quarter of the year, despite ongoing tightening in consumer spending and macro-economic uncertainty, the company’s results remain solid,” SCC president and chief executive officer Stewart Schaefer said in his message to shareholders. “If we compare it to Q1 2022, which was our best Q1 in the company’s history, we were pleased to maintain steady revenues, while continuing to drive our business forward, deliver on our strategic plan and maintain our position as Canada’s leading omnichannel sleep retailer.”

Stewart Schaefer “As a spotlight on the quarter, we continued to see strong contributions from brick and mortar, while experiencing softer online sales, as consumers lean more towards in-person shopping,” he continued. “With our strategic plan in place and the strength of our balance sheet, we continued to execute well with a focus on building the country’s best sleep ecosystem of innovative products and channels, as well as exceeding our customers’ expectations. We kicked off Q1 2023 with the closing of the acquisition of Silk & Snow in the first week of January, followed by the opening of two new Sleep Country/Dormez-vous retail stores.

“Subsequent to quarter end, we were excited to acquire Casper Sleep’s Canadian operations, adding one of North America’s leading sleep brands to our growing family,” Schaefer added.

At the end of March, SCC operated 290 brick-and-mortar stores under the Sleep Country and Dormez-vous banners as well as several digitally native platforms including Silk & Snow, Endy, Hush and Casper.

Related Story: SCC buys Casper Canada

Related Story: SCC to acquire Silk & Snow