Fourth Quarter Highlights
Annual Highlights
1 See the Non-IFRS Measures section of this news release. |
CEO'S Commentary
"We are very pleased with our achievements in the fourth quarter and for the year as a whole. In a challenging retail environment, Sleep Country continues to perform well thanks to the efforts of our associates who everyday create a great customer experience."
Mr. Friesema added, "Our performance in Q4 was enhanced by our increased marketing spend in the second half of the year and our strategic initiatives throughout the year. In 2017 we also launched our eCommerce platform, completed the relocations of four largest distribution centers, opened 12 new and renovated 31 stores, and launched our mattress-in-a-box brand, Bloom. The success of these strategies is evident in our overall 2017 financial performance and reinforces the direction that we plan to continue into 2018.
Dividend Declaration
On
Select Financial and Operational Results
(All amounts in thousands except store and share data)
Q4 2017 |
Q4 2016 |
% |
YTD |
YTD 2016 |
% |
|
Revenue |
$153,559 |
$135,430 |
+13.4% |
$588,014 |
$523,787 |
+12.3% |
SSS1 |
9.3% |
9.6% |
N/A |
8.8% |
10.0% |
N/A |
Stores opened |
3 |
1 |
- |
12 |
11 |
- |
Stores renovated & relocated |
10 |
9 |
- |
31 |
20 |
- |
Operating EBITDA1 |
$25,681 |
$19,123 |
+34.3% |
$99,847 |
$85,045 |
+17.4% |
Net income |
$14,780 |
$11,177 |
+32.2% |
$59,071 |
$49,574 |
+19.2% |
Adjusted net income1 |
$15,831 |
$11,655 |
+35.8% |
$61,992 |
$51,103 |
+21.3% |
Earnings per share (basic) |
$0.39 |
$0.30 |
+30.0% |
$1.57 |
$1.32 |
+18.9% |
Adjusted earnings per share1 |
$0.42 |
$0.31 |
+35.5% |
$1.65 |
$1.36 |
+21.3% |
1 See the Non-IFRS Measures section of this news release |
Summary of Fourth Quarter Financial Results
Fourth quarter revenue grew 13.4% to
The mattress industry is affected by seasonality with fourth quarter sales typically the second highest during the year. On average over the past three years, Sleep Country has generated 20% of its revenue in the first quarter, 23% in the second quarter, 31% in the third quarter and 26% in the fourth quarter.
Gross profit during the fourth quarter increased 19.6% to
Total General and Administration ("G&A") expenses increased by 8.2% to
During the fourth quarter of 2017, Operating EBITDA1 increased 34.3%, or
Adjusted Net Income1 increased 35.8% in the fourth quarter of 2017 to
Net income in Q4 2017 was
Summary of Annual Financial Results
For the year ended
Gross profit increased to
Operating EBITDA1 for 2017 increased by 17.4% to
Adjusted Net Income1 increased 21.3% in 2017 to
Net income in 2017 was
Outlook
"Throughout 2017 we delivered strong financial performance and supported that growth with strategic investments resulting in exceptional results," said Mr. Friesema. "As we enter into 2018, we plan to execute on our ongoing objectives by continuing to grow our market share, and exploring new opportunities while improving our current customer experience to drive SSS growth."
Mr. Friesema added, "we also plan to continue with our store renovation program by renovating 25 to 30 stores to expand the benefits we have seen from our new concept stores. To further strengthen our presence across
"During 2017, we increased our advertising spend by 19% which translated into significant total revenue and Same Store Sales growth, however the increase in advertising spend was not uniform across all quarters and spend in any one particular quarter can have a delayed effect on revenue in future quarters. In 2018 we plan to continue to invest in our media and advertising platform with the highest growth planned for the first half of the year to continue to support our eCommerce and Bloom brand launch which began in the second half of 2017. Advertising has proven to be one of Sleep Country's most powerful growth drivers and, with the support of a new advertising agency, we have begun the process of refreshing our accessories marketing materials, creating strategies to support the launch of new products and driving further sales through our eCommerce platform.
"As
Conference Call
Sleep Country's CEO,
About Sleep Country
Sleep Country is
Non-IFRS Measures
This news release makes reference to certain measures that are not recognized under IFRS and do not have a standardized meaning prescribed by IFRS. They are therefore unlikely to be comparable to similar measures presented by other companies. These measures are provided as additional information to complement IFRS measures by providing further understanding of the Company's results of operations from management's perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the Company's financial information reported under IFRS. The Company uses non-IFRS measures including "Same Store Sales" or "SSS", "EBITDA", "Operating EBITDA", "Adjusted Net Income" and "Adjusted Earnings Per Share" to provide investors with supplemental measures of its operating performance and thus highlight trends in its business that may not otherwise be apparent when relying solely on IFRS financial measures. The Company also believes that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. The Company's management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of management compensation. For a reconciliation of these non IFRS measures refer to the Company's MD&A for 2017 which is available on SEDAR at www.sedar.com.
Forward-Looking Information
Certain information in this news release contains forward-looking information and forward-looking statements which reflect the current view of management with respect to the Company's objectives, plans, goals, strategies, outlook, results of operations, financial and operating performance, prospects and opportunities. Wherever used, the words "may", "will", "anticipate", "intend", "estimate", "expect", "plan", "believe" and similar expressions identify forward-looking information and forward-looking statements. Forward-looking information and forward-looking statements should not be reads as guarantees of future events, performance or results, and will not necessarily be accurate indications of whether, or the times at which, such events, performance or results will be achieved. All of the information in this news release containing forward-looking information or forward-looking statements is qualified by these cautionary statements.
Forward-looking information and forward-looking statements are based on information available to management at the time they are made, underlying estimates, opinions and assumptions made by management and management's current good faith belief with respect to future strategies, prospects, events, performance and results, and are subject to inherent risks and uncertainties surrounding future expectations generally. Such risks and uncertainties include, but are not limited to, those described in the Company's 2017 annual information form (the "AIF") filed on
Readers are urged to consider the risks, uncertainties and assumptions carefully in evaluating the forward-looking information and forward-looking statements and are cautioned not to place undue reliance on such information and statements. The Company does not undertake to update any such forward-looking information or forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable laws.
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