First Quarter Highlights
Highlights Subsequent to Quarter End
1 See the Non-IFRS Measures section of this news release.
CEO'S Commentary
"We are pleased to deliver strong results in the first quarter of 2018," said
"We attribute our success to our talented teams and the continued execution of our strategic objectives and strict focus on our growth initiatives," Mr. Friesema added. "During the quarter, we opened three new stores and renovated 10 locations. Since
"Based on the success of our growth initiatives, the board has decided to increase our dividend for the third time in three years, since going public."
1 See the Non-IFRS Measures section of this news release.
Dividend Declaration
On
Select Financial and Operational Results
(All amounts in thousands unless otherwise stated; other than store and share data)
Q1 2018 |
Q1 2017 |
% Change |
|
Revenue |
$135,281 |
$124,206 |
+8.9% |
SSS1 |
+5.1% |
+11.9% |
|
Stores opened |
3 |
2 |
|
Stores renovated & relocated |
11 |
14 |
|
Operating EBITDA1 |
$19,293 |
$18,219 |
+5.9% |
Net income |
$10,320 |
$10,311 |
+0.1% |
Adjusted net income1 |
$11,029 |
$10,783 |
+2.3% |
Earnings per share (basic) |
$0.28 |
$0.27 |
+3.7% |
Adjusted earnings per share1 |
$0.30 |
$0.29 |
+3.4% |
1 See the Non-IFRS Measures section of this news release
Summary of First Quarter Financial Results
First quarter revenue grew 8.9% to
The mattress industry is affected by seasonality with the first quarter sales typically the lowest during the year as consumers tighten their budget after the holiday season along with cold winter weather in many parts of the country lowering customers desire to shop. 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 first quarter increased 10.7% to
Total General and Administration ("G&A") expenses increased by 17.8% to
During the first quarter of 2018, Operating EBITDA1 increased 5.9%, or
Depreciation and amortization expenses increased by
Adjusted Net Income1 increased 2.3% in the first quarter of 2018 to
Net income in Q1 2018 remained relatively unchanged at
1 See the Non-IFRS Measures section of this news release
Outlook
"Our investment in marketing during Q1 grew traffic, increased conversion in our stores, and produced increases in both mattress and accessory revenue. We plan to continue these investments in Q2 to capitalize on the seasonally stronger quarters ahead." said Mr. Friesema. "Our enhanced digital advertising resulted in strong growth in traffic on our eCommerce website in Q1 and we will also continue to grow our digital advertising in future quarters. Our Omni-channel business will also be accelerated with 3-4 new mattress-in-a-box offerings being introduced starting in Q2."
"We are also pleased to announce that we will exceed our expected growth in new store openings for the year and are raising our 2018 guidance to at least 15 stores. We reaffirm our guidance to opening eight-12 stores per year in 2019 and beyond. Also, with 14 store renovations completed to date, we are confident that we will achieve our 25-30 renovations in 2018. This is particularly exciting as our renovated stores continue to outperform the growth of our legacy stores.
"Our teams across the country achieved strong results in Q1 by focusing on the initiatives that have generated 19 quarters of same store sales growth. That focus, paired with the investments we continue to make, will help us capitalize on the changes currently happening in the Canadian market, and will allow us to help even more Canadians sleep soundly with a new mattress and sleep accessories.
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 Q1 2018 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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