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1. Company Snapshot

1.a. Company Description

Sleep Country Canada Holdings Inc.engages in retailing mattress and bedding-related products in Canada.The company offers a range of mattresses, adjustable lifestyle bases, pillows, duvets, duvet covers, mattress toppers and protectors, pet beds, weighted blankets, throws, sheets, headboards, footboards, frames, mattress and pillowcases, platforms, metal frames, blankets, mattress pads, and other sleep accessories.


The company operates under the Dormez-vous, Sleep Country Canada, and Endy retail banners.As of May 20, 2022, it operated 287 stores.It also sells its products through an e-commerce platform.


Sleep Country Canada Holdings Inc.was founded in 1994 and is headquartered in Brampton, Canada.

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1.b. Last Insights on ZZZ

Recent positive drivers behind Sleep Country Canada Holdings Inc.'s performance include: * Approval of the plan of arrangement with Fairfax Financial Holdings Limited, with shareholders overwhelmingly voting in favor of the deal (September 18, 2024) * Receipt of final court approval for the arrangement (September 26, 2024) * Completion of the arrangement, with Fairfax acquiring all outstanding common shares for $35.00 per share (October 1, 2024) * Institutional investors owning a significant stake of 45% in the company, potentially supporting the stock price (September 19, 2024) * Affirmation of the quarterly dividend of CA$0.237 per share, providing a stable return to investors (August 20, 2024)

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Sleep Country Completes Arrangement with Fairfax

Oct -01

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S&P Dow Jones Indices Announces Changes to the S&P/TSX Composite Index

Sep -27

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Canada's Leading Online Mattress Brand, Endy, Launches Two New Mattresses

Sep -26

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Sleep Country Arrangement with Fairfax Receives Final Court Approval

Sep -26

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Sleep Country Celebrates 30 Years of Expertise, Revealing New Insights on Evolving Sleep Trends

Sep -24

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Dormez-vous Celebrates 30 Years of Expertise, Revealing New Insights on Evolving Sleep Trends

Sep -24

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Institutional investors own a significant stake of 45% in Sleep Country Canada Holdings Inc. (TSE:ZZZ)

Sep -19

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Sleep Country Shareholders Approve Arrangement with Fairfax

Sep -18

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.00%)

6. Segments

Omnichannel Specialty Sleep Retailer

Expected Growth: 4.0%

Strong e-commerce penetration, expanded store footprint, and strategic partnerships drive growth for Sleep Country Canada Holdings Inc.'s omnichannel specialty sleep retailer. Effective marketing campaigns, competitive pricing, and a wide range of sleep solutions also contribute to the 4.0% growth.

7. Detailed Products

Mattresses

Sleep Country Canada offers a wide range of mattresses from top brands, including Tempur-Pedic, Sealy, and Serta, catering to different comfort levels, materials, and price points.

Bed Frames and Foundations

The company offers a variety of bed frames and foundations, including adjustable bases, platform beds, and storage beds, designed to complement their mattresses.

Bedding and Accessories

Sleep Country Canada sells a range of bedding and accessories, such as pillows, sheets, and mattress protectors, to enhance the sleeping experience.

Adjustable Bases

The company offers adjustable bases that can be paired with their mattresses, providing customizable comfort and support.

Sleep Solutions

Sleep Country Canada provides sleep solutions, including sleep trackers and white noise machines, designed to improve sleep quality.

8. Sleep Country Canada Holdings Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Sleep Country Canada Holdings Inc. operates in a niche market with limited substitutes, reducing the threat of substitutes.

Bargaining Power Of Customers

Customers have some bargaining power due to the presence of competitors, but Sleep Country Canada Holdings Inc.'s strong brand and wide product offerings mitigate this power.

Bargaining Power Of Suppliers

Sleep Country Canada Holdings Inc. has a diversified supplier base, reducing the bargaining power of individual suppliers.

Threat Of New Entrants

While there are barriers to entry, new entrants can still disrupt the market, but Sleep Country Canada Holdings Inc.'s established brand and distribution network provide a competitive advantage.

Intensity Of Rivalry

The mattress retail industry is highly competitive, with many established players, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 53.51%
Debt Cost 6.87%
Equity Weight 46.49%
Equity Cost 11.95%
WACC 9.23%
Leverage 115.11%

11. Quality Control: Sleep Country Canada Holdings Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Leons

A-Score: 6.4/10

Value: 7.2

Growth: 5.1

Quality: 6.4

Yield: 7.0

Momentum: 5.0

Volatility: 7.7

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Value: 2.8

Growth: 5.0

Quality: 8.4

Yield: 6.0

Momentum: 9.0

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Value: 5.1

Growth: 6.9

Quality: 7.0

Yield: 5.0

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Tandy Leather Factory

A-Score: 5.1/10

Value: 9.3

Growth: 3.8

Quality: 6.8

Yield: 5.0

Momentum: 0.5

Volatility: 5.3

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Liquidity Services

A-Score: 4.9/10

Value: 3.8

Growth: 6.1

Quality: 6.8

Yield: 0.0

Momentum: 7.5

Volatility: 5.0

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Sleep Country Canada

A-Score: 3.9/10

Value: 2.2

Growth: 6.2

Quality: 3.8

Yield: 3.0

Momentum: 5.0

Volatility: 3.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

35.0$

Current Price

35$

Potential

-0.00%

Expected Cash-Flows