SCC Sets Another Record High for Sales, Earnings

Sleep Country Canada Holdings (SCC), parent company to this country’s largest mattress and sleep goods retailer, set yet another record high for quarterly sales and earnings to round out the first half of its 2022 fiscal year. The only soft spot was a decline in e-commerce sales.

Revenue for the three months ended June 30, 2022, were 18.4% to $227.6 million, up 18.4% the $192.2 million rung-up during the same period last year. The uptick was driven by a 15.1% increase in same store sales as well as incremental sales from Hush, which it acquired in the fourth quarter of 2021.

The parent of Sleep Country, Dormez-vous and Endy reported mattress sales in the second quarter totaled $176.6 million, up 26.5% from the comparable period’s $150.1 million.

Meanwhile, accessory sales were $51.0 million, up 8.9% from $42.1 million.

E-commerce accounted for 18.1% of revenues during the second quarter – roughly $41.2 million (although the company doesn’t report the spilt between mattress and accessory sales for its online stores). This is down from last year’s e-commerce share of 29.6% of revenue or roughly $56.9 million. This is a year-over-year decline of 27.6%.

Most commentators attribute this to the consumer’s desire to get back into the store after two-years of pandemic-related closures and restrictions.

Net income attributable to the company was $22.7 million or 61 cents per share, up from last year’s $17.0 million or 46 cents per share – and uptick of 42.9% on a per share basis.

During the quarter, the company opened a Sleep Country Canada store in Stittsville, Ontario, bringing the store count to 287. Its Endy online store was named a Great Place to Work for the fourth straight year while its mattress and pillow earned an endorsement from the Canadian Chiropractic Association.

Just subsequent to the end of the quarter, SCC released its inaugural Environmental, Social and Governance (ESG) report, highlighting its commitment to being a purpose-driven, sustainable business as well as its All for Sleep branded interactive sleep app.

For the six months also ending June 30, 2022, SCC revenues were $434.6 million, up 15.8% from $375.2 million last year, driven mainly and a 12.0% increase in same store sales.

E-commerce sales represented 19.4% of revenues – approximately $84.3 million. This is down from the 29.4% of revenues for the first half of 2021 or approximately $110.3 million. In dollar volume terms, that’s a decline of 23.6%.

SCC’s core mattress sales totaled $335.6 million for the first six months of the year, up 40.2% from the comparable period’s $295.4 million.

Sales of accessories were $99.0 million, up 19.2% from $79.8 million.

Net income was $41.1 million or $1.11 per share, compared to $25.7 million or 70 cents per share – an increase of 58.6% on a per share basis.

“In these turbulent and uncertain times, in spite of the backdrop of weakening consumer sentiment, we remain positive and focused on delivering on our long-term strategic plan, growing our shareholder value while also remaining sensitive to the Canadian consumer and price increases,” SCC president and chief executive officer Stewart Schaefer said in a statement to shareholders.

“Looking ahead, we are well-positioned to manage through these difficult economic conditions and support our customers through challenging times, as we continue to differentiate ourselves as Canada’s leading sleep partner with our offering of safe, high quality sustainable sleep solutions,” he added.

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