Mattress Firm Profit Tops Estimates; Stock Up - Update

(RTTNews) - Mattress Firm Holding Corp. (MFRM) Wednesday reported a better-than-expected increase in third-quarter profit, helped mainly by double-digit growth in sales.

Looking ahead to fiscal 2014, the company lowered its net earnings guidance, reaffirmed its adjusted earnings outlook and raised its sales expectations.

Investors were enthused with the results and Mattress Firm stock gained 11 percent in after-hours trade on the Nasdaq.

Mattress Firm operates as a specialty retailer of mattresses, and related products and accessories.

The Houston, Texas-based company posted quarterly net income of $18 million or $0.53 per share, compared with $12.5 million or $0.37 per share last year.

Excluding items, adjusted earnings for the quarter were $18.7 million or $0.55 per share, compared with $15.7 million or $0.47 per share a year ago.

On average, eight analysts polled by Thomson Reuters expected earnings of $0.54 per share. Analysts' estimates typically exclude special items.

Sales for the quarter climbed 17.7 percent to $326 million from $277 million a year ago. Analysts expected sales of $320.4 million.

On a same-store basis, sales were up 2.9 percent.

Mattress Firm opened 40 new stores and closed six stores bringing the total number of company-operated stores to 1,155 at the end of the quarter.

After the end of the quarter, the company closed the acquisition of a small mattress retailer operating under the name Mattress People. Also, last month, it agreed to acquire the assets of Perfect Mattress of Wisconsin LLC, a Mattress Firm franchisee for about $6.3 million, subject to customary adjustments.

For fiscal 2014, Mattress Firm now expects net earnings of $1.65 to $1.73 per share, from prior range of $1.66 to $1.74 per share. Adjusted earnings are still expected between $1.75 and $1.83 per share. It now expects sales of $1.217 billion to $1.224 billion, from prior range of $1.194 billion to $1.207 billion.

Analysts expect earnings of $1.77 per share on sales of $1.20 billion for the year.

Mattress Firm stock closed Wednesday at $34.24, down $1.71 or 4.76%, on a volume of 627 thousand shares. In after hours, the stock gained $4.01 or 11.71% at $38.25.