Sleep Country Canada (ZZZ) reported strong third-quarter results. The Canadian mattress retailer continues to lead the country’s sleep space with growth across several key metrics.
Revenues & Earnings
Revenues came in at C$273.8 million in the quarter ended September 30, an increase of 13% from C$242.4 million in the prior-year quarter. E-commerce sales made up 17.9% of revenue.
Net income amounted to C$36.5 million (C$0.99 per share) in Q3 2021, up 13% from C$32.2 million (C$0.88) in Q3 2020.
On an adjusted basis, net income was C$39.7 million (C$1.07 per diluted share), an increase of 19.5% from an adjusted profit of C$33.2 million (C$0.90 per diluted share).
Sleep Country president Stewart Schaefer said, “With record performance in revenue, gross profit margin and net income, we continued to drive profitable growth this quarter and made significant progress on our plans by strengthening our omnichannel business through transformative partnerships with Walmart Canada and Casper.”
Schaefer added that Sleep Country is poised to realize the full potential of its acquisition of Hush and its other thoughtful investments in its sleep ecosystem, infrastructure, and supply chain. (See Insiders’ Hot Stocks on TipRanks)
Wall Street’s Take
On October 20, BMO Capital analyst Stephen MacLeod maintained a Buy rating on ZZZ and raised its price target to C$43 (from C$42). This implies 3.5% upside potential.
As Stephen MacLeod is the only analyst to have offered a 12-month price target for ZZZ in the last three months, the average Sleep Country Canada price target is C$43.
TipRanks’ Smart Score
ZZZ scores a 9 out of 10 on the TipRanks Smart Score rating system, indicating that the stock has strong potential to outperform the overall market.
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