Mattress Firm Warns of Loss Over Store Rebranding
June 09 2016 - 4:50PM
Dow Jones News
Mattress Firm Holding Corp. on Thursday warned it expects to
post a loss for the year as it moves to rebrand its more than 3,400
stores.
On Thursday, the Houston-based company booked a $139 million
charge tied to the store rebranding, which pushed it to a quarterly
loss.
Shares, down 46% over the past 12 months, fell 11% in
after-hours trading to $29.60, below the 52-week low set last
month.
Mattress Firm now projects a loss of $1.57 to $1.62 a share for
the year that ends Jan. 31 on sales of $3.83 billion to $3.88
billion, compared with a profit of $1.82 a share on $2.54 billion
in sales last year.
On an adjusted basis, Mattress Firm estimated a profit of $1.98
to $2.08., compared with $2.36 a year earlier.
The rebranding, which would bring the company's more than 3,400
stores under the Mattress Firm name, is expected to be completed by
the first quarter of 2017.
Meanwhile, for the current quarter, the company forecast 27
cents to 32 cents a share in profit, or 62 cents to 69 cents a
share on an adjusted basis. Analysts had projected profit of 86
cents a share, or 92 cents on an adjusted basis, according to
Thomson Reuters.
Founded in 1986, the Houston-based company has been expanding
through acquisitions, including rival Sleepy's in February.
The expansion has bolstered sales but also resulted in rising
costs. In the latest period, operating expenses more than doubled
to $434.6 million.
Over all, Mattress Firm reported a loss of $119.2 million, or
$3.22 a share, compared with a profit of $5.4 million, or 15 cents
a share, a year earlier. Excluding impairment-related charges and
other items, the loss was 17 cents a share, compared with a
year-earlier profit of 33 cents a share.
Sales rose 49% to $839.4 million, while sales at established
locations fell 1.1%.
Gross profit margin narrowed to 31.7% from 35.8% a year
earlier.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
June 09, 2016 17:35 ET (21:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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