Sleep Country Reports Q4 Revenue Growth of 5.2% and Annual Revenue Growth of 0.7%

TORONTO, March 6, 2024 /CNW/ – Sleep Country Canada Holdings Inc. (“Sleep Country” or the “Company”) (TSX:ZZZ) released its financial results today for its fourth quarter and year ended December 31, 2023. 

All financial results are reported in Canadian dollars unless otherwise stated.

Fourth Quarter Financial Highlights

Revenues increased by $12.6 million or 5.2% to $255.6 million in Q4 2023 from $243.0 million in Q4 2022;
Same Store Sales (“SSS”)1 decreased by 3.2% in Q4 2023 from Q4 2022;
Revenues attributed to eCommerce increased to 26.4% in Q4 2023 from 21.1% in Q4 2022;
Gross profit increased by $5.2 million or 5.7% to $96.3 million in Q4 2023 from $91.1 million in Q4 2022;
Gross profit margin increased to 37.7% in Q4 2023 from 37.5% in Q4 2022;
Operating EBITDA1 decreased by $1.6 million or 3.1% to $51.4 million in Q4 2023 from $53.0 million in Q4 2022;
Operating EBITDA1 margin decreased to 20.1% in Q4 2023 from 21.8% in Q4 2022;
Net income attributable to the Company decreased by $18.0 million or 44.5% to $22.5 million in Q4 2023 from $40.5 million in Q4 2022;
Adjusted net income attributable to the Company decreased by $4.6 million or 19.1% to $19.3 million in Q4 2023 from $23.9 million in Q4 2022;
Diluted earnings per share (“EPS”) decreased by $0.48 or 42.5% to $0.65 in Q4 2023 from $1.13 in Q4 2022;
Diluted adjusted EPS1 decreased by $0.11 or 16.4% to $0.56 in Q4 2023 from $0.67 in Q4 2022;
The Company purchased for cancellation of 1,132,199 common shares (Q4 2022 – 976,532 common shares) in Q4 2023 for total consideration of $26.2 million (Q4 2022 – $22.0 million) against the Company’s normal course issuer bid (“NCIB”); and
Subsequent to quarter-end, on February 5, 2024, the Board declared a dividend of $0.237 per common share that was paid on February 29, 2024 to holders of the common shares of record as at the close of business on February 21, 2024.

Annual Financial Highlights

Revenues increased by $6.3 million or 0.7% to $935.0 million in 2023 from $928.7 million in 2022;
Revenues attributed to eCommerce increased to 22.7% in 2023 from 19.6% in 2022;
Gross profit margin increased to 37.2% in 2023 from 36.7% in 2022;
Operating EBITDA1 margin decreased to 21.0% in 2023 from 23.5% in 2022;
Net income attributable to the Company decreased by $39.3 million or 35.6% to $71.2 million in 2023 from $110.5 million in 2022;
Adjusted net income attributable to the Company decreased by $28.8 million or 27.9% to $74.1 million in 2023 from $102.9 million in 2022;
Diluted EPS decreased by $0.97 or 32.2% to $2.04 in 2023 from $3.01 in 2022;
Diluted adjusted EPS1 decreased by $0.69 or 24.6% to $2.12 in 2023 from $2.81 in 2022; and
The Company purchased for cancellation of 1,596,910 common shares (2022 – 2,339,409 common shares) in 2023 for total consideration of $37.3 million (2022 – $57.7 million) against its NCIB.

Fourth Quarter Business Highlights

Opened one new Sleep Country store in Calgary, Alberta and one new Dormez-vous store in Victoriaville, Quebec;
Opened first-ever brick-and-mortar store for Endy in Sherway Gardens, Toronto, Ontario;
Opened first store-within-a-store for Sleep Country and Silk & Snow in Ottawa, Ontario;
Launched first ultra-premium retail concept store, the rest, in Yorkdale Shopping Centre, Toronto, Ontario; and
Subsequent to quarter-end, opened two new Sleep Country stores in Oshawa and Etobicoke, Ontario, and one new Dormez-vous store in Quebec City, Quebec.

President & CEO Commentary

“I am very proud to report a solid finish to our fiscal year setting a new watermark record in Revenues in our nearly 30-year-old company. Our annual Revenues grew by 0.7% while our Q4 2023 Revenues grew by 5.2% from Q4 2022. Despite ongoing industry challenges that have seen double-digit unit declines in mattress purchases across North America, we delivered strong results. As we execute our multi-year plan of continuing to grow our house of brands and focus on driving efficiencies through our resilient omnichannel business model, we remain razor-focused on innovative ways to grow our market share” said Stewart Schaefer, President and CEO of Sleep Country.

“Our omnichannel approach continues to resonate well with our customers, as successfully demonstrated with the opening of three new brick-and-mortar concepts, Endy, Silk & Snow, and the rest, our first luxury retail brand. With all three brands adding and expanding our merchandising hierarchy, while also broadening our customer segmentation, it further reinforces our position as Canada’s leading and most trusted specialty sleep retailer,” said Schaefer.

“As we step into fiscal 2024, we remain focused on three key priorities: growth through innovation, our customer experience and our operational excellence. We will continue to invest in expanding our brands with cutting-edge sleep technologies and products, we will further develop personalized and exceptional customer experiences, and we will continue to streamline our operations to maximize synergies across the Company while preserving the unique identities of each of our brands. I am confident that by staying true to these priorities, we will continue to create value for all stakeholders and help Canadians achieve their best sleep every night,” concluded Schaefer.

Summary of Fourth Quarter Financial Results

Full story available on Benzinga.com