Sleep Country Canada (TSE:ZZZ), a retailer of mattresses and other sleep products, reported its Q1-2023 earnings results after the closing bell today. While revenue and earnings declined year-over-year, the company beat analysts’ expectations.
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ZZZ generated revenues of C$206.5 million for the quarter, down slightly from C$207.0 million in the same period last year, but this came in higher than the expectations of C$194.65 million. Additionally, adjusted diluted earnings per share fell 33.9% year-over-year to C$0.37 but were ahead of the expectations of C$0.36 per share. Net income itself came in at C$11.3 million, down 38.5% from C$18.4 million in Q1 2022.
Meanwhile, Sleep Country’s same-store sales declined by 6.2%, partially offset by the extra revenue contributed by e-commerce retailer Silk & Snow, which Sleep Country acquired in Q1.
With lower same-store sales came lower profit margins. For instance, the company’s operating EBITDA margin fell to 20.0% in Q1 2023 from 22.6% in Q1 2022, while its gross profit margin was 34.3% compared to 34.6% in the same period last year.
Nonetheless, Stewart Schaefer, the President and CEO of Sleep Country, was pleased with the results, stating, “If we compare it to Q1 2022, which was our best Q1 in the Company’s history, we were pleased to maintain steady revenues, while continuing to drive our business forward, deliver on our strategic plan and maintain our position as Canada’s leading omnichannel sleep retailer.”
Is Sleep Country Stock a Buy, According to Analysts?
Sleep Country stock sports a Moderate Buy consensus rating based on three Buys and two Holds assigned in the past three months. The average Sleep Country stock price target of C$32.01 implies 33.6% upside potential.
If you’re wondering which analyst you should follow if you want to buy and sell ZZZ stock, the most profitable and accurate analyst covering the stock (on a one-year timeframe) is Patricia Baker from Scotiabank, with an average return of 28.81% per rating. See below.
