Mattress Firm Tops Estimates, Buys Sleep Train

Mattress Firm's fiscal second-quarter profit rose slightly as sales improved.

The Houston-based bedding retailer on Thursday announced it earned $14.3 million, or 41 cents per share, for the period ended July 29. That compares with $14.1 million, or 41 cents per share, a year earlier.

Excluding acquisition-related costs and other items, earnings were 61 cents per share. Analysts polled by FactSet forecast earnings of 60 cents per share.

Revenue for the Houston company climbed 36 percent to $410 million from $302.5 million, meeting Wall Street's expectations.

Mattress Firm Holding Corp. also announced Thursday that it's buying The Sleep Train Inc. for $425 million to help bolster its position in the specialty retail bedding industry.

Sleep Train runs approximately 310 retail stores in California, Oregon, Washington, Idaho, Nevada and Hawaii.  Mattress Firm Holding Corp. has more than 1,500 company-run and franchised stores in 36 states. Its brands include Sealy, Serta and Tempur-Pedic.

As part of the deal announced Thursday, Houston-based Mattress Firm said that it will also assume certain additional liabilities totaling about $15 million.

It plans to continue operating under both the Mattress Firm and Sleep Train brands and will keep privately held Sleep Train's corporate headquarters near Sacramento, California.

Sleep Train CEO Dale Carlsen will become president and chief strategy officer after the acquisition is complete. He will also become Mattress Firm's vice chairman. Sleep Train chief operating officer Rob Killgore will become co-COO, sharing the post with current Mattress Firm COO Ken Murphy.

The deal is targeted to close by the fiscal fourth quarter's end. Both companies' boards have unanimously approved the transaction.

Copyright AP - Associated Press
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