Mattress Firm Holding Earnings: Here’s Why the Stock is Falling Now

Mattress Firm Holding Corp (NASDAQ:MFRM) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 15%.

Mattress Firm Holding Corp Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 2.38% to $0.43 in the quarter versus EPS of $0.42 in the year-earlier quarter.

Revenue: Rose 14.87% to $302.5 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Mattress Firm Holding Corp reported adjusted EPS income of $0.43 per share. By that measure, the company missed the mean analyst estimate of $0.51. It missed the average revenue estimate of $323.42 million.

Quoting Management: “Our exciting growth story continued in the second quarter of 2013, as we added 35 new stores organically, bringing our total company-operated store count to over 1,100,” stated Steve Stagner, Mattress Firm’s president and chief executive officer. “We saw revenues increase by 15% over the prior year to $303 million, which evidences that our growth is outpacing the mattress industry, which has experienced mid-single digit growth during the comparable period. The former Mattress Giant stores continue to generate strong sales growth that is driving operating margin expansion, while sales at our legacy stores in those acquisition markets have also improved year over year, further validating the strength of our relative market share strategy. We expect that the second half of the year will benefit from a return to higher industry-level advertising media spend relative to recent quarters that we anticipate will drive improvement in customer traffic and sales trends in our business.”

Key Stats (on next page)…

Revenue increased 9.12% from $277.21 million in the previous quarter. EPS increased 13.16% from $0.38 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.62 and has not changed. For the current year, the average estimate is a profit of $1.97, which is the same with that ninety days ago.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at]