Mattress Firm Expanding In Purchase Of Sleepy’s

Mattress Firm Holding Corp., the largest USA specialty mattress retailer by number of stores, said Monday that it agreed to buy second-place Sleepy’s for $780 million, in a deal aimed at expanding the company’s presence in the fragmented retail bedding market. Citigroup Inc. decreased their target price on Mattress Firm Holding Corp from $76.00 to $60.00 and set a “buy” rating for the company in a research report on Monday, September 14th. In addition, Adam Blank, the current chief operating officer and general counsel of Sleepy’s, will join the Mattress Firm executive management team and will contribute up to $10 million of the equity value he holds in Sleepy’s in exchange for shares of Mattress Firm common stock. The combination of Sleepy’s and Mattress Firm creates the nation’s first true national mattress specialty retailer, and will benefit both our customers and our employees. Mattress Firm Holding Corp also updated its Q3 guidance to $0.80-0.82 EPS. They expect $0.79 EPS, up 12.86% or $0.09 from last year’s $0.7 per share. The firm has a market cap of $1.74 billion and a P/E ratio of 35.23.

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In company news, Shoe Carnival ( SCVL ) shares surged Tuesday after the shoe retailer reported above-consensus Q3 revenue, upstaging a narrow miss by the company with its adjusted per-share earnings for the three months ended October 31. During the same quarter in the prior year, the firm posted $0.61 earnings per share. Mattress Firm Holding Corp’s revenue was up 61.2% on a year-over-year basis. Now with access to these two markets, Mattress Firm’s goal of attaining same-day delivery capability in 95 percent of the country is now within its reach, only missing Wyoming and Alaska. Also, CFO Alexander Weiss purchased 5,000 shares of the business’s stock in a transaction dated Friday, September 18th. The Firm operates through two reportable divisions: retail activities and franchise operations.

Consumer stocks were posting strong gains during Tuesday trading, with shares of consumer staples companies in the S&P 500 advancing around 0.6% while shares of consumer discretionary firms in the S&P 500 were ahead almost 0.5%.