Sleep Country (TSX:ZZZ) stock rose 3.4% on August 19. Shares have climbed 9.4% over the past month. The company released its second quarter 2019 results on August 8.
Revenue rose 15.9% year-over-year to $166.6 million as Sleep Country reported same store sales growth of 1.9%. Mattress and accessories revenue grew 15.5% and 17.9%, respectively, compared to the prior year.
Sleep Country’s gross profit margin expanded to 29.8% in the quarter as the company enters the back half of 2019 with some wind at its back.
In the year-to-date period, Sleep Country has achieved revenue growth of 13.2% to $315.9 million. Operating EBITDA rose 54.2% to $65 million but adjusted net income was still down 13.4% to $21.1 million. The board of directors declared a quarterly dividend of $0.195 per share which represents a 3.7% yield.
Sleep Country stock is still trading at the low end of its 52-week range after this post-earnings bump. The second quarter saw the company deliver a balanced performance, but there are still concerns going forward. Investors will want to keep their eyes on macro indicators like consumer confidence and housing trends, which have improved on the domestic front in recent months.
This stock is not going to provide explosive growth, but it does offer attractive balance after a solid Q2. Shares had an RSI of 69 as of close on August 19, putting the stock close to technically overbought territory.
Value investors may want to wait for a more attractive entry point before the summer comes to a close.
