Why Mattress Firm Holding (MFRM) Is Soaring After the Bell

NEW YORK (TheStreet) -- Bedding retailer Mattress Firm Holding (MFRM) is spiking in extended trading after fourth-quarter earnings came in better than expected.

After the bell, shares added 8% to $48.

The Houston-based company reported net sales 20.8% higher year over year in the three months to Jan. 28. Revenue of $312.1 million was in line with consensus, according to analysts surveyed by Thomson Reuters, while comparable-store sales jumped 6.5%.

Adjusted net income of 30 cents a share was a penny higher than analysts had forecast.

"Given this solid performance in a challenging environment, we are confident in our ability to effectively navigate the ever-changing consumer landscape while delivering value to our customers and shareholders," said CEO Steve Stagner in a report.

"As we move ahead, we remain committed to our strategy of driving sales, which led to 6.5% comparable-store sales growth during the fourth fiscal quarter."

For the current year ending Feb. 3, 2015, management upwardly revised its revenue guidance to between $1.46 billion and $1.52 billion, from prior guidance of $1.38 billion to $1.43 billion. Analysts had predicted $1.41 billion in sales.

Fiscal 2015 earnings guidance of $1.88 to $2 a share is in line with estimates for $1.90 a share.

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TheStreet Ratings team rates MATTRESS FIRM HOLDING CORP as a Hold with a ratings score of C. The team has this to say about their recommendation:

"We rate MATTRESS FIRM HOLDING CORP (MFRM) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, disappointing return on equity and weak operating cash flow."

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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