Even mattress retailer Houston-based Mattress Firm Holding Corp. (Nasdaq: MFRM) isn't isolated from the effects of falling oil prices.
The company reported its fourth-quarter and annual earnings on March 19, at which point CEO Steve Stagner and CFO Alex Weiss shed some light on how they're seeing sales affected by the drop in oil prices that started last year.
The gist is that sales have slowed a little in oil affected markets, but in other places sales are positively impacted by consumers having more disposable income thanks to cheaper gas.
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"We’ve seen a little bit of impact in Texas in certain markets," said Stagner, citing Houston as an example. "It’s nothing that’s alarming us at this point, but we’re very mindful that there are some layoffs going on, particularly in Houston."
Weiss emphasized that a relatively small percentage of the company's store base is in oil-affected markets.
"We think that there will be a little bit of softness in some of those markets," said Weiss on a conference call discussing the earnings results. "While there is a little bit of drag, we feel very comfortable given the fact that there is less than 10 percent of our stores in those markets and that the overall chain has picked up."
Aside from oil, the name of the game for Mattress Firm this year is digestion. The mattress retailer embarked on a feeding frenzy of acquisitions in 2014, acquiring several retailers that spread its footprint in Illinois, Indiana, Wisconsin and Florida. Mattress Firm topped off the year when it bought Rocklin, California-based retailer The Sleep Train Inc. for $425 million.
This year the company is focused on integrating its acquisitions and concentrating on its existing markets, Stagner and Weiss said on the call.
Mattress Firm's net income for fiscal 2014 was $44.3 million, down from a net income of $52.9 million in 2013, but the dip is not surprising given how much the company spent on acquisitions in 2014. The company's share price jumped from $64.03 at the close of trading on March 19 to $67.04 at 1 p.m. Central Time on March 20.