One of the best performing stocks on Sept. 4 was Mattress Firm Holdings (NASDAQ:MFRM). After news broke that the retailer's revenue and earnings beat expectations, shares of the business rose about 12% in late morning trading. According to its press release, revenue soared nearly 36% from $302.5 million to $410 million year-over-year, coming in higher than the $406.6 million analysts anticipated. The big driver behind this growth was the increase in store count management announced, with the number of locations in operation shooting up 32% to 1,480 from the 1,121 reported the same time last year, accompanied by a 9.7% improvement in comparable store sales.
|Earnings per Share (adj.)||$0.43||$0.60||$0.61|
From a profit standpoint, the business did even better. For the quarter, Mattress Firm reported earnings per share of $0.41, coming in line with the $0.41 seen last year. After accounting for one-time expenses, profits hit $0.61, $0.01 above forecasts and 42% greater than the $0.43 in adjusted profits reported a year earlier. This growth was driven largely by the jump in sales the company reported, but can also be chalked up to a drop in its general and administrative expenses from 9% of sales to 6.5%.
In a previous article I wrote on Mattress Firm, I indicated that, while expectations are high, the business's long-term performance suggests that it might make for an interesting prospect. This is now especially true after the retailer announced the acquisition of Sleep Train for $425 million, which will help push its store count to around 2,000 locations. However, for those who aren't interested in Mattress Firm after its share price rose so much, Tempur-Sealy International (NYSE:TPX), a company that receives over 10% of its sales from Mattress Firm, might make for an interesting play.
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