Mattress Firm Holding 10-Q 12 Sep 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Aug. 02, 2016	Sep. 08, 2016
Document and Entity Information
Entity Registrant Name	MATTRESS FIRM HOLDING CORP.
Entity Central Index Key	1,419,852
Document Type	10-Q
Document Period End Date	Aug. 2, 2016
Amendment Flag	false
Current Fiscal Year End Date	--01-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		37,255,048
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Aug. 02, 2016	Feb. 02, 2016
Current assets:
Cash and cash equivalents	$ 13,587	$ 1,778
Accounts receivable, net	78,673	64,923
Inventories	253,105	161,190
Prepaid expenses and other current assets	126,738	55,176
Total current assets	472,103	283,067
Property and equipment, net	455,863	317,451
Intangible assets, net	99,038	214,942
Goodwill	1,490,167	826,728
Other noncurrent assets, net	22,291	16,496
Total assets	2,539,462	1,658,684
Current liabilities:
Notes payable and current maturities of long-term debt	16,284	8,664
Accounts payable	274,325	164,686
Accrued liabilities	179,592	83,869
Customer deposits	43,084	20,028
Total current liabilities	513,285	277,247
Long-term debt, net of current maturities	1,340,286	675,033
Deferred income tax liability	47,196	52,299
Other noncurrent liabilities	161,478	142,623
Total liabilities	2,062,245	1,147,202
Commitments and contingencies (Note 13)
Equity
Common stock, $0.01 par value; 120,000,000 shares authorized; 35,356,859 and 35,294,568 shares issued and outstanding at February 2, 2016; and 37,297,201 and 37,228,002 shares issued and outstanding at August 2, 2016, respectively	372	353
Additional paid-in capital	516,004	447,357
Accumulated retained earnings (deficit)	(57,590)	63,772
Total Mattress Firm Holding Corp. equity	458,786	511,482
Noncontrolling interest	18,431
Total equity	477,217	511,482
Total liabilities and equity	$ 2,539,462	$ 1,658,684

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Aug. 02, 2016	Feb. 02, 2016
CONDENSED CONSOLIDATED BALANCE SHEETS
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	120,000,000	120,000,000
Common stock, shares issued	37,297,201	35,356,859
Common stock, shares outstanding	37,228,002	35,294,568

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 02, 2016	Aug. 04, 2015	Aug. 02, 2016	Aug. 04, 2015
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Net sales	$ 980,011	$ 661,064	$ 1,819,403	$ 1,223,618
Cost of sales	625,495	403,557	1,199,112	764,840
Gross profit from retail operations	354,516	257,507	620,291	458,778
Franchise fees and royalty income	1,076	1,285	2,198	2,400
Total gross profit	355,592	258,792	622,489	461,178
Operating expenses:
Sales and marketing expenses	246,367	169,121	450,404	301,017
General and administrative expenses	79,664	42,893	161,905	94,257
Intangible asset impairment charge			138,726
Loss on store closings and impairment of store assets	7,066	1,173	16,659	1,468
Total operating expenses	333,097	213,187	767,694	396,742
Income (loss) from operations	22,495	45,605	(145,205)	64,436
Other expense:
Interest expense, net	24,670	10,046	48,437	20,299
Income (loss) before income taxes	(2,175)	35,559	(193,642)	44,137
Income tax expense (benefit)	(408)	13,678	(73,207)	16,778
Net income (loss)	(1,767)	21,881	(120,435)	27,359
Net income attributable to noncontrolling interest	432		927
Net income (loss) attributable to Mattress Firm Holding Corp.	$ (2,199)	$ 21,881	$ (121,362)	$ 27,359
Basic net income (loss) per common share (in dollars per share)	$ (0.06)	$ 0.62	$ (3.27)	$ 0.78
Diluted net income (loss) per common share (in dollars per share)	$ (0.06)	$ 0.61	$ (3.27)	$ 0.77
Basic weighted average shares outstanding (in shares)	37,201,842	35,188,368	37,126,890	35,167,565
Diluted weighted average shares outstanding (in shares)	37,201,842	35,600,295	37,126,890	35,584,024

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 02, 2016	Aug. 04, 2015	Aug. 02, 2016	Aug. 04, 2015
Statements of Comprehensive Income
Net income (loss)	$ (1,767)	$ 21,881	$ (120,435)	$ 27,359
Unrealized loss on cash flow hedge, net of tax benefit of $0, $44, $0 and $0, respectively	(71)
Other comprehensive income (loss), net of tax	(1,838)	21,881	(120,435)	27,359
Comprehensive income attributable to noncontrolling interest	432		927
Comprehensive income (loss) attributable to Mattress Firm Holding Corp	$ (2,270)	$ 21,881	$ (121,362)	$ 27,359

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 02, 2016	Aug. 04, 2015	Aug. 02, 2016	Aug. 04, 2015
Statements of Comprehensive Income
Unrealized gain on cash flow hedge, tax	$ 44	$ 0	$ 0	$ 0

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - 6 months ended Aug. 02, 2016 - USD ($) $ in Thousands	Common Stock	Additional Paid In Capital	Accumulated Retained Earnings (Deficit)	Mattress Firm	Noncontrolling Interest	Total
Balances at Feb. 02, 2016	$ 353	$ 447,357	$ 63,772	$ 511,482		$ 511,482
Balances (in shares) at Feb. 02, 2016	35,294,568					35,356,859
Increase (Decrease) in Stockholders' Equity
Acquisition-related noncontrolling interest					$ 18,354	$ 18,354
Net loss			(121,362)	(121,362)		(121,362)
Net income attributable to noncontrolling interest					927	927
Issuance of common stock	$ 7	24,993		25,000		25,000
Issuance of common stock (in shares)	699,300
Equity consideration	$ 11	36,820		36,831		36,831
Equity consideration (in shares)	1,062,936
Exercise of common stock options	$ 1	2,858		2,859		2,859
Exercise of common stock options (in shares)	146,829
Excess tax benefits associated with stock-based awards		162		162		162
Vesting of restricted stock (in shares)	31,277
Purchase of vested stock-based awards		(284)		(284)		(284)
Purchase of vested stock-based awards (in shares)	(6,908)
Stock-based compensation		4,098		4,098		4,098
Distributions to noncontrolling interest partner					(850)	(850)
Balances at Aug. 02, 2016	$ 372	$ 516,004	$ (57,590)	$ 458,786	$ 18,431	$ 477,217
Balances (in shares) at Aug. 02, 2016	37,228,002					37,297,201

CONDENSED CONSOLIDATED STATEME8

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) shares in Thousands, $ in Thousands	6 Months Ended
	Aug. 02, 2016	Aug. 04, 2015
Cash flows from operating activities:
Net income (loss)	$ (120,435)	$ 27,359
Adjustments to reconcile net income to cash flows provided by operating activities:
Depreciation	43,373	28,746
Loan fee and other amortization	14,023	3,797
(Gain) loss from disposals of property and equipment	1,088	(14)
Deferred income tax expense (benefit)	(32,500)	3,766
Stock-based compensation	4,098	4,352
Intangible asset impairment	138,726
Loss on store closings and impairment of store assets	16,659	1,468
Construction allowances from landlords	6,803	5,913
Excess tax benefits associated with stock-based awards	(162)	(915)
Effects of changes in operating assets and liabilities, excluding business acquisitions:
Accounts receivable	(12,909)	(3,515)
Inventories	(7,351)	4,400
Prepaid expenses and other current assets	(48,266)	(5,952)
Other assets	(1,112)	(2,307)
Accounts payable	40,643	11,310
Accrued liabilities	29,339	9,455
Customer deposits	6,426	6,664
Other noncurrent liabilities	2,646	24,628
Net cash provided by operating activities	81,089	119,155
Cash flows from investing activities:
Purchases of property and equipment	(55,825)	(68,480)
Sales of property and equipment, net	74,262
Business acquisitions, net of cash acquired	(725,031)	119
Net cash used in investing activities	(706,594)	(68,361)
Cash flows from financing activities:
Proceeds from issuance of debt	799,100	58,000
Principal payments of debt	(160,607)	(114,302)
Debt issuance costs	(28,066)
Proceeds from issuance of common stock	25,000
Proceeds from exercise of common stock options	2,859	1,755
Excess tax benefits associated with stock-based awards	162	915
Purchase of vested stock-based awards	(284)
Distributions to noncontrolling interest partner	(850)
Net cash (used in) provided by financing activities	637,314	(53,632)
Net (decrease) increase in cash and cash equivalents	11,809	(2,838)
Cash and cash equivalents, beginning of period	1,778	13,475
Cash and cash equivalents, end of period	13,587	10,637
Cash paid for:
Interest	42,026	20,070
Income taxes	2,423	6,038
Supplemental disclosure of noncash investing and financing activity:
Capital expenditures included in accounts payable and accruals at end of period	5,450	$ 6,933
Capital leases	$ 9,546
Equity issued in acquisition	36,831

Business and Basis of Presentat

Business and Basis of Presentation	6 Months Ended
	Aug. 02, 2016
Business and Basis of Presentation
Business and Basis of Presentation	MATTRESS FIRM HOLDING CORP. Notes to the Unaudited Condensed Consolidated Financial Statements 1. Business and Basis of Presentation Mattress Firm Holding Corp., through its direct and indirect subsidiaries, is engaged in the retail sale of mattresses and bedding-related products in the United States through over 3,600 company-operated and franchisee-owned mattress specialty stores in 49 states that operate primarily under the brand names Mattress Firm, ® Sleepy’s ® and Sleep Train ® , as well as through the Company’s eCommerce sites and special events. Mattress Firm Holding Corp. and its subsidiaries are referred to collectively as the “Company” or “Mattress Firm.” The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X of the U.S. Securities and Exchange Commission (“SEC”), and they reflect, in the opinion of management, all normal recurring adjustments necessary to present fairly the Company’s financial position as of August 2, 2016, and the results of operations, other comprehensive income and cash flows for the periods presented. The Company’s historical and quarterly results of operations may not be indicative of the results that may be achieved for the full year or any future period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the Company’s most recent audited consolidated financial statements and related notes for the fiscal year ended February 2, 2016, which are included in the Company’s Annual Report on Form 10-K filed with the SEC on April 4, 2016 (the “Fiscal 2015 Annual Financial Statements”). The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of (i) assets and liabilities, (ii) disclosure of contingent assets and liabilities at the date of the financial statements and (iii) the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Estimates that are more susceptible to change in the near term are the accruals for sales returns and exchanges, product warranty costs, asset impairments, vendor incentives, self-insured liabilities, store closing costs and acquisition accounting fair values. Certain reclassifications have been made to the prior year condensed consolidated statements of cash flows to segregate the gain (loss) from disposals of property and equipment from the previously reported activity that was included as a component of the change in noncurrent liabilities to conform to the current period financial statement presentation with no effect on the Company’s previously reported net cash provided by operating activities. The Company’s fiscal year consists of 52 or 53 weeks ending on the Tuesday closest to January 31. The fiscal year ended February 2, 2016 (“Fiscal 2015”) consisted of 52 weeks. The fiscal year ending January 31, 2017 (“Fiscal 2016”) consists of 52 weeks. The Company acquired The Sleep Train, Inc. (“Sleep Train”) in October 2014 and HMK Mattress Holdings LLC, the holding company of Sleepy’s LLC and related entities (collectively, “Sleepy’s”) in February 2016. Both the Sleep Train and Sleepy’s legacy systems utilize the First-In, First-Out cost flow method (“FIFO”) of inventory costing. As a result, inventory of $44.1 million and $134.6 million as of February 2, 2016 and August 2, 2016, respectively, is valued at FIFO. The Company, as a whole, uses the Weighted Average costing method for inventory. The Company determined the difference between Weighted Average and FIFO costs was not material at February 2, 2016 and August 2, 2016, therefore the carrying value of all inventory is essentially at Weighted Average. Steps are in process to convert the acquired legacy inventory systems to the Company’s current ERP system; however, this is not expected to be completed until fiscal 2017. The Company will continue to assess and confirm that the carrying value of the FIFO inventory and the Weighted Average inventory is not materially different. The Company acquired from Sleepy’s an interest rate swap derivative used for the purpose of hedging exposure to changes of interest rates. This instrument has a notional amount of $3 9 million. The interest rate swap, carried at fair value, matures on October 10, 2019. The derivative is an economic hedge and changes in fair value of the derivative instrument are recognized as interest expense in the Company’s condensed consolidated statements of operations. In the twenty-six weeks ended August 2, 2016, the Company has recognized a gain of less than $0.1 million on the interest rate swap. A subsidiary of Sleepy’s entered into an arrangement in 2006 with an unrelated third party to purchase land as tenants in common and build office and warehouse space (the “Project”) that would be leased to Sleepy’s for its corporate headquarters. The Project is owned by a limited liability company (“LLC”), which is 50% owned by Sleepy’s. As a result of the Sleepy’s acquisition, this 50% interest is now owned by the Company. Pursuant to Accounting Standard Codification (“ASC”) 810-10, the LLC is considered a variable interest entity and the Company is considered the primary beneficiary. As a result, the Company accounts for the Project utilizing the consolidation method of accounting and all operating results and the balance sheet of the LLC is consolidated with a corresponding noncontrolling interest presented in the Company’s condensed consolidated financial statements. At August 2, 2016, the Company had $18.4 million of equity in the noncontrolling interest recorded on its condensed consolidated balance sheets. At August 2, 2016, the LLC had land and buildings with a net book value of $73.5 million, which are classified in property and equipment, net in the condensed consolidated balance sheets and $35.5 million of mortgage debt that is classified in long-term debt, net of current maturities in our condensed consolidated balance sheets. Although the mortgage debt is collateralized by the land and buildings, Sleepy’s is jointly and severally liable for the outstanding mortgage principal and interest payments on the mortgage debt. Only 50% of these assets and liabilities are attributable to the Company.

Recently Issued Accounting Stan

Recently Issued Accounting Standards	6 Months Ended
	Aug. 02, 2016
Recently Issued Accounting Standards
Recently Issued Accounting Standards	2. Recently Issued Accounting Standards Adopted in this Report — In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, Interest- Imputation of Interest- Simplifying the Presentation of Debt Issuance Costs , which requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. This ASU is effective on a retrospective basis for annual reporting periods beginning after December 15, 2015, however early adoption is permitted. The Company has retrospectively applied the change in accounting principle as of May 3, 2016. As such, the prior year amounts of debt issuance costs previously reported as a component of other long-term assets were recast and resulted in a decrease of $7.2 million in other long-term assets and long-term debt, net of current maturities, respectively, in the Company’s condensed consolidated balance sheet as of February 2, 2016. The adoption of this ASU did not have an impact on the Company’s results of operations, cash flows or equity. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations- Simplifying the Accounting for Measurement-Period Adjustments , which requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. This ASU is effective on a prospective basis for annual reporting periods beginning after December 15, 2015, however early adoption is permitted. The Company has adopted this ASU on a prospective basis beginning on February 3, 2016. The adoption of this ASU impacted the Company’s adjustment to provisional amounts recorded in the 2016 acquisition discussed in Note 3. Not Yet Adopted in this Report — In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , that outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The ASU is based on the core principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. Entities have the option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard. This ASU is effective for fiscal years beginning after December 15, 2017 including interim periods within that reporting period. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations, as an amendment to ASU 2014-09. The amendment clarifies how to identify the unit of accounting for the principal versus agent evaluation, how to apply the control principle to certain types of arrangements, such as service transaction, and reframed the indicators in the guidance to focus on evidence that an entity is acting as a principal rather than as an agent. In April 2016, the FASB issued ASU No. 2016-10, “ Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing ”, which also amends certain aspects of ASU 2014-09 , specifically the standard’s guidance on identifying performance obligations and the implementation guidance on licensing. The amendments clarify when promised goods or services are separately identifiable (i.e., distinct within the context of a contract), an important step in determining whether goods and services should be accounted for as separate performance obligations. In addition, the amendments allow entities to disregard goods or services that are immaterial in the context of a contract and provide an accounting policy election for accounting for certain shipping and handling activities. The amendments also clarify how an entity should evaluate the nature of its promise in granting a license of intellectual property (IP), which will determine whether the entity recognizes revenue over time or at a point in time. The amendments revise the guidance to address how entities should apply the exception for sales- and usage-based royalties to licenses of IP, recognize revenue for licenses that are not separate performance obligations and evaluate different types of license restrictions (e.g., time-based, geography-based). In May 2016, the FASB issued ASU 2016-12, " Revenue from Contracts with Customers - Narrow Scope Improvements and Practical Expedients ", to reduce the risk of diversity in practice for certain aspects in ASU 2014-09, including collectability, noncash consideration, presentation of sales tax and transition. The new guidance’s effective date and transition provisions are aligned with the requirements in the new revenue standard, which is not yet effective. The Company is currently evaluating the guidance, including the amendments, to determine the Company's adoption method and the effect it will have on the Company's condensed consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases , which requires any organization that lease assets to recognize the rights and obligations created by those leases on the balance sheet. This ASU is effective for fiscal years beginning after December 15, 2018 including interim periods within that reporting period, however early adoption is permitted. The Company will apply this ASU on a retrospective basis beginning in fiscal year 2019. The Company is currently evaluating the guidance to determine the effect it will have on the Company's condensed consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation- Improvements to Employee Share-Based Payment Accounting , which involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under the new standard, income tax benefits and deficiencies are to be recognized as income tax expense or benefit in the income statement and the tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. An entity should also recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. Excess tax benefits should be classified along with other income tax cash flows as an operating activity. In regards to forfeitures, the entity may make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. This ASU is effective for fiscal years beginning after December 15, 2016 including interim periods within that reporting period, however early adoption is permitted. The Company is currently evaluating the guidance to determine the Company's adoption method and the effect it will have on the Company's condensed consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments , which will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2017, and will require adoption on a retrospective basis. The Company is currently evaluating the impact the application of ASU 2016-15 will have on the Company’s condensed consolidated financial statements .

Acquisitions

Acquisitions	6 Months Ended
	Aug. 02, 2016
Acquisitions
Acquisitions	3. Acquisitions On February 5, 2016, the Company completed the purchase of all of the outstanding equity interests in HMK Mattress Holdings LLC, the holding company of Sleepy’s LLC and related entities (collectively, “Sleepy’s”), for an aggregate purchase price of approximately $796.3 million, subject to working capital adjustments. At the time of the acquisition, Sleepy’s operated 1,065 specialty mattress retail stores located in 17 states in the Northeast, New England, the Mid-Atlantic and Illinois and employed approximately 3,300 people. The Sleepy’s acquisition allowed the Company to achieve immediate scale and presence in New England and in the Northeast where it previously had little to no presence. The Company expects to receive future annual cash income tax benefits of approximately $11.5 million over the next 15 years from deductible tax basis goodwill generated from the acquisition, subject to the Company’s ability to generate future taxable income. The purchase price consisted of cash of $725.0 million (net of $34.5 million of cash acquired), of which $20.0 million was placed in escrow, and $36.8 million delivered in the form of 1,062,936 shares of common stock, par value $0.01 per share, of Mattress Firm Holding Corp. (“common stock”) as calculated in accordance with the terms of the purchase agreement. The common stock was issued to certain affiliates of Adam Blank, the chief operating officer and general counsel of Sleepy’s immediately prior to the closing of the acquisition, and Calera Capital Partners IV, L.P. in exchange for the aggregate equity value that each of them held in HMK Mattress Holdings LLC. The purchase price payable to the selling equityholders of HMK Mattress Holdings LLC was reduced by certain payment obligations of Sleepy’s, including the repayment of certain indebtedness of Sleepy’s. The Company funded a portion of the cash purchase price for the Sleepy’s acquisition by borrowing approximately $749.2 million under its Senior Credit Facility. A portion of the cash purchase price was funded by capital that the Company raised by selling an aggregate of 699,300 shares of its common stock at $35.75 per share to certain investment funds affiliated with J.W. Childs Associates, L.P., an existing stockholder (“J.W. Childs”), and to Steve Stagner, its chief executive officer at the time, and now the executive chairman and chairman of the board. The allocation of the preliminary purchase price to the acquired assets and liabilities, based on management’s estimate of their fair values on the acquisition date, is as follows (in thousands): Sleepy's Cash $ Accounts receivable Inventories Prepaid expenses and other current assets Property and equipment Intangible assets Goodwill Net favorable lease rights Other assets Notes payable and current maturities of long-term debt Accounts payable Accrued liabilities Customer deposits Long-term debt, net of current maturities Deferred income tax liability Other noncurrent liabilities Noncontrolling interest Fair value of assets and liabilities acquired Reconciliation to cash used in acquisition: Fair value of equity consideration transferred Cash of acquired business Cash used in acquisition, net of cash acquired $ The Sleepy’s acquisition resulted in $663.4 million of goodwill based on management’s estimate on the acquisition closing date, of which approximately $460.5 million will be deductible for income tax purposes over 15 years. Intangible assets acquired in relation to the Sleepy’s acquisition consist primarily of $26.8 million in acquired tradenames and $4.7 million related to a non-compete agreement. The tradenames were valued as defensive assets and have useful lives ranging from one to ten years. The weighted average amortization period remaining for these tradename intangible assets is three years. The non-compete agreement is being amortized over a period of five years. The noncontrolling interest relates to the 50% interest in the LLC not owned by the Company and was adjusted to fair value at the date of acquisition based on the net fair value of the fixed assets and mortgage liability held by the LLC. The net sales included in the Company’s consolidated statement of operations which were generated by the Sleepy’s business from the acquisition closing date of February 5, 2016 through August 2, 2016 was $528.2 million. The earnings included in the Company’s consolidated statement of operations derived from the Sleepy’s business from the acquisition closing date to August 2, 2016 were $17.4 million. Acquisition-related costs for U.S. GAAP purposes are costs the acquirer incurs to effect a business combination, including advisory, legal, accounting, valuation, and other professional or consulting fees. The Company incurred a total of approximately $0.4 million and $6.8 million of acquisition-related costs charged to general and administrative expenses during the thirteen and twenty-six weeks ended August 2, 2016, respectively. The allocation of the purchase price is preliminary and is not finalized and may be adjusted during the remainder of fiscal 2016. The items still under review include the fair value of inventories, accrued liabilities, and deferred income taxes. In addition, as the Company continues to integrate the Sleepy’s accounting processes other items may require adjustment. During the thirteen weeks ended August 2, 2016, the Company made adjustments to provisional amounts recorded during the first quarter of fiscal 2016 of a net increase of $11.5 million to various reserves and accruals, a net increase of $3.1 million in the value assigned to property and equipment, net decrease of $1.8 million in the value assigned to intangible assets, and a net adjustment of $0.8 million in the purchase price, resulting in a net increase in goodwill of $11.0 million. The impact to net income from these provisional adjustments in the first quarter of fiscal 2016 would have been less than a $0.1 million decrease. In the twenty-six weeks ended August 2, 2016, the Company recorded a working capital adjustment related to its November 2015 acquisition of the retail assets and operations of Double J-RD, LLC which increased goodwill and cash used in acquisitions by less than $0.1 million. The following table presents the selected consolidated financial information of the Company on a pro forma basis, assuming the Sleepy’s acquisition occurred as of February 4, 2015, the first day of the Company’s 2015 fiscal year. The historical financial information has been adjusted to give effect to the pro forma items that are directly attributable to the acquisition and are expected to have a continuing impact on the consolidated results. The unaudited financial information set forth below has been compiled from the historical financial statements and other information, but is not necessarily indicative of the results that actually would have been achieved had the transactions occurred on the dates indicated or that may be achieved in the future (amounts in thousands, except per share amounts): Thirteen Weeks Ended August 4, 2015 Twenty-Six Weeks Ended August 4, 2015 As Reported Pro Forma Adjustments Pro Forma As Reported Pro Forma Pro Forma Net sales $ $ $ $ $ $ Net income (loss) Diluted net income (loss) per common share $ $ $ $ $ $ For the thirteen and twenty-six weeks ended August 2, 2016 no pro-forma adjustments are required to be presented as the acquisition of Sleepy’s occurred within three days of the beginning of the fiscal year. As such the three days of activity were not considered significant.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	6 Months Ended
	Aug. 02, 2016
Fair Value of Financial Instruments
Fair Value of Financial Instruments	4. Fair Value of Financial Instruments The amounts reported in the condensed consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their respective fair values due to the short-term maturity of these instruments. The FASB has issued guidance on the definition of fair value, the framework for using fair value to measure assets and liabilities, and disclosure regarding fair value measurements. The guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used to measure fair value. These tiers include: · Level 1: Defined as observable inputs such as quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. · Level 2: Defined as pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. · Level 3: Defined as pricing inputs that are unobservable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The Company measures the fair value of its nonqualified deferred compensation plan on a recurring basis. The plan’s assets are valued based on the marketable securities tied to the plan. Additionally, the Company measures the fair values of goodwill, intangible assets, and property and equipment on a nonrecurring basis if required by impairment tests applicable to these assets. Assets requiring recurring or non-recurring fair value measurements consisted of the following (in thousands): Net Book Value as of February 2, Fair Value Measurements Fiscal 2015 2016 Level 1 Level 2 Level 3 Impairments Nonqualified deferred compensation plan $ $ — $ $ — $ — Property and equipment requiring impairment review $ $ — $ — $ $ Senior Credit Facility term loans $ $ — $ $ — $ — Net Book Value as of August 2, Fair Value Measurements Fiscal 2016 2016 Level 1 Level 2 Level 3 Impairments Nonqualified deferred compensation plan $ $ — $ $ — $ — Intangible assets requiring impairment review $ $ — $ — $ $ Interest rate swap liability $ $ — $ $ — $ — Property and equipment requiring impairment review $ $ — $ — $ $ Senior Credit Facility term loans $ $ — $ $ — $ — The significant Level 3 unobservable input used in the fair value measurement of the Company’s property and equipment was the weighted average cost of capital (“WACC”). Increases (decreases) in WACC inputs in isolation would result in a lower (higher) fair value measurement. The following tables are not intended to be all-inclusive, but rather provide a summary of the significant unobservable inputs used in the fair value measurement of the Company’s Level 3 assets in which impairment testing was performed. Impairment testing performed as of February 2, 2016 Unobservable Valuation Technique Significant Unobservable Inputs Input Range Property and Equipment Impairment Testing Income approach WACC 13.5% Impairment testing performed as of August 2 2016 Unobservable Valuation Technique Significant Unobservable Inputs Input Range Intangible Asset Impairment Testing Income approach WACC 7.5% to 11.5% Royalty rate 1.0% to 2.0% Property and Equipment Impairment Testing Income approach WACC 13.5% The fair value of the Senior Credit Facility term loans was estimated based on the ask and bid prices quoted from an external source. The fair value of the interest rate swap liability was estimated based on prices quoted from an external source.

Property and Equipment

Property and Equipment	6 Months Ended
	Aug. 02, 2016
Property and Equipment.
Property and Equipment	5. Property and Equipment Property and equipment consists of the following (in thousands): February 2, August 2, 2016 2016 Land $ — $ Building — Leasehold improvements Equipment, computers and software Store signs Furniture and fixtures Vehicles Property and equipment Accumulated depreciation Property and equipment, net $ $ Depreciation expense was $14.7 million and $22.6 million for the thirteen weeks ended August 4, 2015 and August 2, 2016, respectively. Depreciation expense was $28.7 million and $43.4 million for the twenty-six weeks ended August 4, 2015 and August 2, 2016, respectively. Based upon the review of the performance of individual stores, including a decline in performance of certain stores, impairment losses of approximately $0.7 million and $4.5 million were recognized during the thirteen and twenty-six weeks ended August 4, 2015 and August 2, 2016, respectively. The impairment loss amounts were determined as the excess of the carrying value of property and equipment of those stores with potential impairment in excess of the estimated fair value based on estimated cash flows. Estimated cash flows are primarily based on projected revenues, operating costs and maintenance capital expenditures of individual stores and are discounted based on comparable industry average rates for weighted average cost of capital. The Company also recorded an impairment charge related to store assets of approximately $6.9 million in the thirteen weeks ended May 3, 2016, primarily related to our plan to close certain stores near the end of their lease term. An additional $1.0 million and $3.0 million of impairment losses were recorded during the thirteen and twenty-six weeks ended August 2, 2016, respectively, related to other fixed assets. Impairment losses related to fixed assets are reported as a component of “Loss on store closing and impairment of store assets” in the condensed consolidated statements of operations. On June 20, 2016, the Company completed the sale and leaseback of two warehouses to an unrelated third party and on July 11, 2016, the Company completed the sale and leaseback of 15 store properties to an unrelated third party. The Company received aggregate gross proceeds from the transactions of $70.9 million ($68.5 million, net of closing costs). Mortgage debt of $9.4 million related to these properties was paid off as part of the transaction and $2.6 million of the proceeds, recorded as a component of accounts receivable, net, was placed in escrow with the state of New Jersey and will be released during fiscal 2017. In connection with the transactions the Company has entered into agreements under which the Company leases these properties. The Company accounted for the transactions as sale-leasebacks and determined the transactions qualified for sales recognition and sale-leaseback accounting. The Company recognized any loss on sale immediately and any gain was deferred and will be recognized over the lease term. Accordingly, during the second quarter of fiscal 2016, the Company recognized net losses of $1.7 million. The gains of $14.7 million were deferred and will be recognized over the respective lease terms.

Goodwill and Intangible Assets

Goodwill and Intangible Assets	6 Months Ended
	Aug. 02, 2016
Goodwill and Intangible Assets
Goodwill and Intangible Assets	6. Goodwill and Intangible Assets The Company’s goodwill is attributable to the retail segment. A summary of the changes in the carrying amounts of goodwill and non-amortizable assets for the twenty-six weeks ended August 2, 2016 is as follows (in thousands): Nonamortizable Goodwill Intangibles Balance at February 2, 2016 $ $ Prior year business acquisition adjustment (See Note 3) — Current period business acquisitions (see Note 3) — Impairment of tradenames — Reclassification of tradenames to definite lived intangible assets — Balance at August 2, 2016 $ $ A summary of the changes in the carrying amounts of amortizable intangible assets for the twenty-six weeks ended August 2, 2016 is as follows (in thousands): Net Accumulated Carrying Gross Cost Amortization Value Balance at February 2, 2016 $ $ $ Current period business acquisitions (See Note 3) — Reclassification of tradenames to definite lived intangible assets Impairment of tradenames Trademarks defense — Amortization expense — Balance at August 2, 2016 $ $ $ The components of intangible assets were as follows (dollar amounts in thousands): February 2, 2016 August 2, 2016 Gross Gross Useful Life Carrying Accumulated Net Carrying Accumulated Net (Years) Amount Amortization Amount Amount Amortization Amount Nonamortizing: Trade names and trademarks $ $ — $ $ $ — $ Amortizing: Franchise agreement rights 20 Acquired trade names and trademarks 1 - 10 Software technology 15 Non-compete agreements 3 - 5 Intangible assets, net $ $ $ $ $ $ Expense included in general and administrative expense related to the amortization of intangible assets was $0.7 million and $4.1 million for the thirteen weeks ended August 4, 2015 and August 2, 2016, respectively. Expense included in general and administrative expense related to the amortization of intangible assets was $1.4 million and $8.8 million for the twenty-six weeks ended August 4, 2015 and August 2, 2016, respectively. The weighted average amortization period remaining for intangible assets is five years. As of August 2, 2016, amortization expense for intangible assets is expected to be as follows (in thousands): Fiscal Year Remainder of 2016 $ 2017 $ 2018 $ 2019 $ 2020 $ Thereafter $ No goodwill impairment charges were recognized in the thirteen and twenty-six weeks ended August 4, 2015 and August 2, 2016. The Company made the decision in late April 2016 to rebrand all stores to the Mattress Firm brand name. This rebranding is expected to be complete in the first quarter of fiscal 2017. In connection with this decision, the Company revalued all tradename intangible assets held by the Company using the relief of royalty method and recorded the corresponding non-cash impairment charge of $138.7 million in the thirteen weeks ended May 3, 2016 to write down these intangible assets to fair value. (See Note 4).

Notes Payable and Long-term Deb

Notes Payable and Long-term Debt	6 Months Ended
	Aug. 02, 2016
Notes Payable and Long-term Debt
Notes Payable and Long-term Debt	7. Notes Payable and Long-term Debt Notes payable and long-term debt consists of the following (in thousands): February 2, August 2, 2016 2016 Senior Credit Facility - term loans $ $ Less: Senior Credit Facility - term loans discount Senior Credit Facility - revolver borrowings — Capital leases — Equipment financing and other notes payable Total long-term debt Less: deferred financing costs Total debt, net Less: current maturities of long-term debt Long-term debt, net of current maturities $ $ Senior Credit Facility— Effective October 20, 2014, Mattress Holding Corp. (“MHC”), a Delaware corporation and indirect subsidiary of Mattress Firm Holding Corp., entered into a $125 million asset-backed loan credit agreement dated October 20, 2014, among MHC, as borrower, Mattress Holdco, Inc., the lenders party thereto, and Barclays Bank PLC, as administrative agent, collateral agent and issuer (the “ABL Credit Agreement”). Effective February 5, 2016, MHC entered into Amendment No. 1 to the ABL Credit Agreement, which amended the ABL Credit Agreement to, among other things, increase the available revolving credit commitments thereunder by $75.0 million, to up to $200 million total. The ABL Credit Agreement is a committed senior revolving credit facility, secured by the assets of the borrower and the guarantors, that permits aggregate borrowings of up to $200 million, and contains a letter of credit facility that, at any time outstanding, is limited to $60 million and a swing line facility that, at any time outstanding, is limited to $20 million. Subject to customary conditions, the Company may request that the lenders’ aggregate commitments with respect to the revolving credit facility be increased by up to $50 million. The maturity date under the ABL Credit Agreement was extended under Amendment No. 1 to February 5, 2021. Loans under the ABL Credit Agreement bear interest by reference, at MHC’s election, to the LIBOR rate or base rate, provided, that swing line loans bear interest by reference only to the base rate. The applicable margin for LIBOR rate loans varies from 1.25% to 1.50% and the applicable margin for base rate loans varies from 0.25% to 0.50%. The interest rate for loans under the ABL Credit Agreement, whether tied to LIBOR or the base rate, is determined based upon the Company’s average excess available borrowing capacity for the prior three month period. A letter of credit issuance fee is payable by the Company equal to 0.125% per annum multiplied by the average daily amount available to be drawn under the applicable letter of credit, as well as an additional fee equal to the applicable margin for LIBOR rate loans times the daily amount available to be drawn under all outstanding letters of credit. The commitment fee rate payable to the lenders for each of the revolving facility and term facility is 0.25% per annum. Mattress Holdco, Inc., the parent company of the borrower, and each domestic subsidiary of MHC other than immaterial subsidiaries, as determined by certain ratios in the credit agreement, has unconditionally guaranteed all existing and future indebtedness and liabilities of the other guarantors and the borrower arising under the ABL Credit Agreement and other loan documents. Mattress Holdco, Inc. and subsidiaries own all assets and liabilities of the Company, with the exception of a minimal cash balance. The ABL Credit Agreement requires compliance with one financial covenant. The Company cannot permit its fixed charge coverage ratio to fall below 1.0. The ABL Credit Agreement generally defines the fixed charge coverage ratio as the ratio of (a) adjusted EBITDA, less capital expenditures, less all taxes paid or payable in cash by the borrower and guarantors to (b) the sum of fixed charges, in each case, determined as of the most recently ended four fiscal quarter period. As of August 2, 2016, the fixed charge coverage ratio was 2.53 to 1.0. The ABL Credit Agreement also contains customary representations, warranties and affirmative and negative covenants. Events of default under the ABL Credit Agreement include failure to pay principal or interest when due, failure to comply with the financial and operational covenants, as well as a cross default event, Loan Document (as defined in the ABL Credit Agreement) enforceability event, change of control event and bankruptcy and other insolvency events. If an event of default occurs and is continuing, then the lenders holding the majority of the outstanding loans have the right, among others, to (i) terminate the commitments under the ABL Credit Agreement, (ii) accelerate and require the Company to repay all the outstanding amounts owed under any Loan Document (provided that in limited circumstances with respect to insolvency and bankruptcy of the Company, such acceleration is automatic), and (iii) require the Company to cash collateralize any outstanding letters of credit. There were $40.0 million in outstanding ABL Credit Agreement borrowings at August 2, 2016. Outstanding letters of credit on the revolving facility were $12.3 million at August 2, 2016, resulting in $114.4 million of availability for revolving borrowings. Effective October 20, 2014, MHC entered into a $720 million term loan credit agreement dated October 20, 2014, among MHC, as borrower, Mattress Holdco, Inc., the lenders party thereto, and Barclays Bank PLC, as administrative agent and collateral agent (the “Term Loan Credit Agreement”). Effective February 5, 2016, MHC entered into Amendment No. 1 to the Term Loan Credit Agreement, which amended the Term Loan Credit Agreement to, among other things, add a $665 million incremental term loan facility thereunder. The Term Loan Credit Agreement and the ABL Credit Agreement are collectively referred to as the “Senior Credit Facility”. Two term loans in the aggregate principal amounts of $720 million and $665 million were issued under the Term Loan Credit Agreement on October 20, 2014 and February 5, 2016, respectively. The maturity date under the Term Loan Credit Agreement is October 20, 2021. Loans under the Term Loan Credit Agreement bear interest by reference, at MHC’s election, to (i) the LIBOR rate, which is 5.25%, or (ii) the base rate, which is 4.25%. The interest rate for loans under the Term Loan Credit Agreement, whether tied to LIBOR or the base rate, is determined based upon the Company’s total net leverage ratio. The weighted average interest rate applicable to outstanding borrowings under the Term Loan Credit Agreement was the 1.0% LIBOR rate plus 5.25% as of August 2, 2016. Mattress Holdco, Inc., the parent company of the borrower, and each domestic subsidiary of MHC other than immaterial subsidiaries, as determined by certain ratios in the Term Loan Credit Agreement, has unconditionally guaranteed all existing and future indebtedness and liabilities of the other guarantors and MHC arising under the Term Loan Credit Agreement and other loan documents. The Term Loan Credit Agreement requires compliance with one financial covenant. Commencing with the fiscal quarter ending as of August 2, 2016, MHC must not exceed a total net leverage coverage ratio subject to specified stepdowns. The financial covenant starts at 5.5 times and steps down annually. As of August 2, 2016 the total net leverage coverage ratio was 3.9 times. The Term Loan Credit Agreement generally defines the total net leverage coverage ratio as the ratio of (a) consolidated net debt to (b) adjusted EBITDA of MHC, in each case, determined as of the last day of the four fiscal quarter period ending on such test date. The Term Loan Credit Agreement contains customary representations, warranties and affirmative and negative covenants. Mattress Holdco, Inc. and subsidiaries own all assets and liabilities of the Company, with the exception of a minimal cash balance. Events of default under the Term Loan Credit Agreement include failure to pay principal or interest when due, failure to comply with the covenants, as well as a cross default event, Loan Document (as defined in the Term Loan Credit Agreement) enforceability event, change of control event and bankruptcy and other insolvency events. If an event of default occurs and is continuing, then the lenders holding a majority of the outstanding loans have the right, among others, to (i) terminate the commitments under the Term Loan Credit Agreement, and (ii) accelerate and require the Company to repay all the outstanding amounts owed under any Loan Document (provided that in limited circumstances with respect to insolvency and bankruptcy of the Company, such acceleration is automatic). Capital Leases— The Company has an outstanding capital lease in the amount of $8.0 million for its new corporate office headquarters. The Company expects to move to its new headquarters in the third fiscal quarter of 2016. The capital lease will be amortized through fiscal 2023, at an interest rate of 4.1%. The Company has outstanding capital leases for information technology and warehouse equipment as of August 2, 2016 in the amount of $1.5 million. The capital leases will be amortized through fiscal 2018. Equipment Financing and Other Notes Payable— In connection with the acquisition of Sleepy’s the Company acquired mortgages payable with a remaining balance of $37.9 million as of August 2, 2016 payable through fiscal 2019 at interest rates ranging from 3.6% to 5.6%. The mortgages are collateralized be their respective properties. At August 2, 2016, $35.5 million of this mortgage debt related to the Project that is fully reflected in our condensed consolidated balance sheets but is only 50% attributable to the Company due to the noncontrolling interest. (See Note 1). Covenant Compliance— The Company was in compliance with all of the financial covenants required under the Senior Credit Facility and our other indebtedness as of August 2, 2016. Future Maturities of Notes Payable and Long‑Term Debt —The aggregate maturities of notes payable and long‑term debt at August 2, 2016 were as follows (in thousands): Fiscal Year Remainder of 2016 $ 2017 2018 2019 2020 Thereafter Total $

Income Taxes

Income Taxes	6 Months Ended
	Aug. 02, 2016
Income Taxes
Income Taxes	8. Income Taxes Income tax expense during the interim periods is based on the estimated annual effective income tax rate plus any discrete items which are recorded in the period in which they occur. Discrete items include such events as changes in estimates due to the finalization of tax returns, tax audit settlements, tax law changes, and increases or decreases in valuation allowances related to prior year estimates. The determination of the consolidated provision for income taxes, deferred tax assets and liabilities and related valuation allowance requires management to make judgments and estimates. Although management believes that its tax estimates are reasonable, the ultimate tax determination involves significant judgments that could become subject to audit by tax authorities in the ordinary course of business, as well as the generation of sufficient future taxable income. The Company recognized $73.2 million of income tax benefit for the twenty-six weeks ended August 2, 2016, compared to $16.8 million of income tax expense for the twenty-six weeks ended August 4, 2015. The effective tax rate was 37.8% for the twenty-six weeks ended August 2, 2016, compared to 38.0% for the twenty-six weeks ended August 4, 2015. The effective tax rate of 37.8% for the current period differs from the federal statutory rate of 35.0% primarily due to state income taxes. The prior year rate also varied from the federal statutory rate, primarily due to state income taxes but were offset by the release of $0.4 million in liabilities for unrecognized tax benefits as a result of settling an audit, which lowered the effective tax rate. The Company and its subsidiaries are included in a consolidated income tax return in the U.S. federal jurisdiction and some states, and file separate income tax returns in several other states. As of August 2, 2016, the federal return is open to audit for tax years after 2012 and some state jurisdictions are open for tax years after 2009. As of February 3, 2015, the Company had approximately $3.5 million of net operating loss carryforwards that begin expiring in fiscal 2029, if not utilized to offset future taxable income. These net operating loss carryforwards arose from the acquisition of MGHC Holding Corporation (“Mattress Giant”) during fiscal 2012 are limited to $2.8 million in fiscal 2016 and $0.7 million in fiscal 2017.

Prepaid Expenses and Other Curr

Prepaid Expenses and Other Current Assets	6 Months Ended
	Aug. 02, 2016
Prepaid Expenses and Other Current Assets
Prepaid Expenses and Other Current Assets	9. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following (in thousands): February 2, August 2, 2016 2016 Prepaid rent $ $ Prepaid income taxes Prepaid insurance Prepaid computer software and hardware services Prepaid special event space rental Prepaid point-of-purchase inventory Prepaid advertising Other Total $ $

Accrued Liabilities and Other N

Accrued Liabilities and Other Noncurrent Liabilities	6 Months Ended
	Aug. 02, 2016
Accrued Liabilities and Other Noncurrent Liabilities
Accrued Liabilities and Other Noncurrent Liabilities	10. Accrued Liabilities and Other Noncurrent Liabilities The Company estimates certain liabilities in an effort to recognize those expenses in the period incurred. The most significant estimates relate to employee wages, payroll taxes and withholdings, product warranty returns and insurance‑related expenses, significant portions of which are self‑insured related to workers’ compensation and employee health insurance. Accrued liabilities consist of the following (in thousands): February 2, August 2, 2016 2016 Unbilled advertising $ $ Insurance Employee wages, payroll taxes and withholdings Sales and property tax Closed store lease reserve Product warranty returns Utilities Accrued employee compensated absences Accrued rent Accrued construction in ‑ progress costs Sales returns and exchanges Accrued interest Other Total $ $ Other noncurrent liabilities consist of the following (in thousands): February 2, August 2, 2016 2016 Deferred lease liabilities $ $ Deferred vendor incentives Product warranty returns, less current portion Other Total $ $

Earnings Per Share

Earnings Per Share	6 Months Ended
	Aug. 02, 2016
Earnings Per Share
Earnings Per Share	11. Earnings Per Share Basic net income (loss) per common share is computed by dividing the net income (loss) applicable to common shares by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income by the weighted average number of common shares outstanding during the period, adjusted to reflect potentially dilutive securities using the treasury stock method for stock option awards. Diluted net income (loss) per common share adjusts basic net income (loss) per common share for the effects of stock options and other potentially dilutive financial instruments only in the periods in which such effect is dilutive. The following table presents a reconciliation of the weighted average shares outstanding used in the earnings per share calculations: Thirteen Weeks Ended Twenty-Six Weeks Ended August 4, August 2, August 4, August 2, 2015 2016 2015 2016 Basic weighted average shares outstanding Effect of dilutive securities: Stock options — — Restricted shares — — Diluted weighted average shares outstanding Diluted net income per common share for the thirteen and twenty-six weeks ended August 4, 2015, excludes stock options for the purchase of 49,631 shares of common stock as their inclusion would be anti-dilutive. Certain stock option and restricted stock awards contain vesting conditions based on specified stock price targets for the Company’s common stock as measured at each of the annual vesting dates (“market-based awards”). The Company includes such market-based awards in the determination of dilutive weighted average shares outstanding under the treasury stock method when, as of the date of determination, the specified stock price targets are met and the common stock shares pursuant to those awards become contingently issuable. Accordingly, the determination of diluted weighted average shares outstanding excludes, as of the date of determination, stock options for the purchase of 15,388 shares of common stock for the thirteen and twenty-six weeks ended August 4, 2015, and excludes 136,832 shares of non-vested restricted stock for the thirteen and twenty-six weeks ended August 4, 2015, as the specified stock price targets were not met as of the determination date. For the thirteen and twenty-six weeks ended August 2, 2016, there were no reconciling items to the weighted average common shares outstanding in the calculation of diluted loss per common share. The thirteen and twenty-six weeks ended August 2, 2016 excludes stock options for the purchase of 589,160 shares of common stock and excludes 483,094 shares of non-vested restricted stock as their inclusion would be anti-dilutive due to the net loss position of the Company in the thirteen and twenty-six weeks ended August 2, 2016.

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Aug. 02, 2016
Stock-Based Compensation
Stock-Based Compensation	12. Stock-Based Compensation 2011 Omnibus Incentive Plan —On November 3, 2011, the Company’s board of directors and shareholders adopted the Mattress Firm Holding Corp. 2011 Omnibus Incentive Plan to provide for the grant of equity-based awards to Company employees, directors and other service providers. A total of 4,206,000 shares of the Company’s common stock were reserved for grants under the 2011 Omnibus Incentive Plan. There were 2,080,432 shares available for future grants under the stock incentive plan as of August 2, 2016. Stock Options —A portion of the stock options granted to the Company’s employees are subject to time-based vesting schedules, while the remaining portion of the stock options are subject to market-based vesting schedules, with such vesting based on specified stock price targets. The exercise price of the options is based upon the closing market price per share of the Company’s common stock on the date of grant, and the options have a term of 10 years. The following table summarizes the stock option grants, exercises, and forfeitures for the twenty-six weeks ended August 2, 2016 (in thousands, except per share amounts): Weighted Average Stock Exercise Price Options Per Share Outstanding, as of February 2, 2016 $ Granted (a) $ Exercised (b) $ Forfeited $ Outstanding, as of August 2, 2016 (c) $ Exercisable, as of August 2, 2016 (d) $ (a) The weighted average grant date fair value of stock options granted during the twenty-six weeks ended August 2, 2016 was $21.86. (b) The aggregate intrinsic value of stock options exercised during the twenty-six weeks ended August 2, 2016 was $2.5 million. The weighted average market price of shares exercised during the twenty-six weeks ended August 2, 2016 was $36.69. (c) Stock options outstanding as of August 2, 2016 have a weighted average remaining contractual term of 6.18 years and an aggregate intrinsic value of $3.7 million based on the market value of the Company’s common stock on August 2, 2016. (d) Stock options exercisable as of August 2, 2016 have a weighted average remaining contractual term of 5.68 years and an aggregate intrinsic value of $3.0 million based on the market value of the Company’s common stock on August 2, 2016. Future vesting dates on the stock options range from August 13, 2016 to March 21, 2020, and expiration dates range from November 17, 2021 to March 21, 2026 at exercise prices and average contractual lives as follows: Range of Exercise Prices Outstanding as of August 2, 2016 (in thousands) Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Exercisable as of August 2, 2016 (in thousands) Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Time Based $19.00 - $29.26 $ $ $34.65 - $57.05 $ $ $60.74 - $60.74 $ — — $ — Market Based $19.00 - $29.26 $ $ $34.65 - $57.05 $ $ The Company accounts for employee stock options under the fair value method of accounting using a Black Scholes methodology to measure time-based option fair value at the date of grant and a Monte Carlo Simulation approach to measure market-based option fair value at the date of grant. The fair value of the stock options at the date of grant is recognized as expense over the vesting term, which represents the requisite service period. The following assumptions were used to calculate the fair value of the Company’s time-based stock options on the date of grant utilizing the Black-Scholes option pricing model: Twenty-Six Weeks Ended August 2, 2016 Weighted average expected life (in years) Volatility factor % Dividend yield % Risk-free interest rate 1.23 to 1.35 % The Company bases its expected option life on the expected exercise and termination behavior of the option holders and an appropriate model of the Company’s future stock price. The expected volatility assumption is derived from the historical volatility of similar companies’ common stock over the most recent period commensurate with the estimated expected life of the Company’s stock options, combined with other relevant factors. For the thirteen and twenty-six weeks ended August 2, 2016, the Company recognized $0.4 million and $0.7 million, respectively, of compensation expense associated with stock option awards in general and administrative expenses in the condensed consolidated statement of operations compared to $0.6 million and $1.2 million, respectively, for the thirteen and twenty-six weeks ended August 4, 2015. The Company did not capitalize any equity-based compensation costs related to stock options during the thirteen and twenty-six weeks ended August 2, 2016 and August 4, 2015 As of August 2, 2016, the Company estimates that a total of approximately $2.9 million of currently unrecognized forfeiture adjusted compensation expense will be recognized over a weighted average period of 2.09 years for unvested stock option awards issued and outstanding. Restricted Stock —The Company grants restricted stock to certain employees and to non-employee independent directors. A portion of the restricted stock granted to the Company’s employees is subject to time-based vesting schedules, while the remaining portion of the restricted stock is subject to market-based vesting schedules, with such vesting based on specified stock price targets. The following table summarizes the restricted stock grants, vesting, and forfeitures for the twenty-six weeks ended August 2, 2016 (in thousands, except per share amounts): Weighted Average Restricted Fair Shares Value Outstanding, as of February 2, 2016 $ Granted (a) $ Vested (b) $ Forfeited $ Unvested, as of August 2, 2016 $ (a) The total grant-date fair value of restricted stock awards granted during the twenty-six weeks ended August 2, 2016 was $3.0 million. (b) The total fair value of awards vested during the twenty-six weeks ended August 2, 2016 was $1.3 million. The Company accounts for restricted stock under the fair value method of accounting using the closing market price per share of the Company’s stock to measure time-based restricted stock fair value at the date of grant and a Monte Carlo Simulation approach to measure market-based restricted stock fair value at the date of grant. The fair value of the restricted stock at the date of grant is recognized as expense over the vesting term, which represents the requisite service period. The following assumptions were used to calculate the fair value of the Company’s market-based restricted stock on the grant date utilizing a Monte Carlo Simulation approach: Twenty-Six Weeks Ended August 2, 2016 Weighted average expected life (in years) Volatility factor % Dividend yield % Risk-free interest rate 1.05 to 1.22 % For the thirteen and twenty-six weeks ended August 2, 2016, the Company recognized $1.0 million and $3.4 million, respectively, of compensation expense associated with restricted stock awards in general and administrative expenses in the condensed consolidated statement of operations compared to $1.8 million and $3.3 million, respectively, for the thirteen and twenty-six weeks ended August 4, 2015. The Company did not capitalize any equity-based compensation costs related to restricted stock awards during the thirteen and twenty-six weeks ended August 2, 2016 and August 4, 2015 As of August 2, 2016, the Company estimates that a total of approximately $12.4 million of currently unrecognized forfeiture adjusted compensation expense will be recognized over a weighted average period of 2.59 years for unvested restricted stock awards.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Aug. 02, 2016
Commitments and Contingencies
Commitments and Contingencies	13. Commitments and Contingencies The Company conducts the majority of its operations from leased store and warehouse facilities pursuant to non-cancellable operating lease agreements with initial terms generally ranging from five to ten years. Certain leases include renewal options generally ranging from one to five years and contain certain rent escalation clauses. Most leases require the Company to pay its proportionate share of the property tax, insurance and maintenance expenses of the property. Certain leases provide for contingent rentals based on sales volume; however, incremental rent expense resulting from such arrangements are accrued for those stores expected to surpass the sales threshold subject to their respective lease agreements. Future minimum lease payments under operating leases as of August 2, 2016, related to properties operated by the Company is as follows (in thousands): Fiscal Year Remainder of 2016 $ 2017 2018 2019 2020 Thereafter Total $ The Company remains directly and contingently obligated under lease agreements related to leased properties no longer operated by the Company. In certain instances, the Company has entered into assignment and sublease agreements with third parties, although the Company remains contingently liable with respect to future lease obligations for such leased properties. Future minimum lease payments under operating leases as of August 2, 2016, associated with properties no longer operated by the Company, and the related future sublease rentals is as follows (in thousands): Company’s Sublease Fiscal Year Commitment Rentals Remainder of 2016 $ $ 2017 2018 2019 2020 Thereafter — — Total $ $ The Company has contracts related to sponsorships and space rentals at special event venues, with future minimum commitments as of August 2, 2016 of $1.9 million, $3.5 million, $2.1 million, and $1.2 million for the remainder of fiscal 2016, fiscal 2017, fiscal 2018, and fiscal 2019, respectively. The Company is subject to legal proceedings and claims that arise in the ordinary course of business. Management does not believe that the outcome of any of those matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. The Company has conducted an internal investigation, with the assistance of outside counsel and forensic consultants, of potential related party transactions involving contracts and leases entered into by the Company. While no related party transactions were identified, in the course of the investigation, the Company discovered that two employees of the Company’s real estate group had conflicts of interest involving business relationships with certain of the Company’s real estate vendors that were not disclosed to the Company in accordance with policy. The two employees were terminated for violating Company policy. As a further step, the Company, with the assistance of outside counsel, is conducting a more detailed investigation into its real estate and leasing practices. In the course of this second investigation, the Company has reason to believe that there may have been improper gifts made to certain of its employees from vendors. However, this second investigation is still ongoing and, as of the date of the filing of these financial statements, the Company is unable to determine whether other matters will be uncovered, the quantitative impact of any such matters, or what the ultimate impact will be on the Company. No provision with respect to these investigations and actions taken or to be taken by the Company has been made in the Company’s financial statements or cash flows.

Subsequent Events

Subsequent Events	6 Months Ended
	Aug. 02, 2016
Subsequent Events
Subsequent Events	14. Subsequent Event On August 6, 2016, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Steinhoff International Holdings N.V., a company incorporated under the laws of the Netherlands (“Steinhoff”), Stripes US Holding, Inc., a Delaware corporation and direct, wholly-owned subsidiary of Steinhoff, and Stripes Acquisition Corp., a Delaware corporation and indirect, wholly-owned subsidiary, of Steinhoff (“Purchaser”), pursuant to which the Company will be, subject to the satisfaction of certain conditions precedent including, among others, the successful completion of a cash tender offer, acquired by Steinhoff (collectively, the “Potential Acquisition”). On August 16, 2016, Purchaser commenced the tender offer to purchase any and all of the issued and outstanding shares of the Company’s Common Stock (the “Shares”) at a purchase price of $64.00 per Share (the “Offer Price”) in cash, without interest. Unless the Offer is extended or earlier terminated pursuant to the Merger Agreement, the Offer will expire at midnight, New York City time, on September 13, 2016. If the applicable conditions set forth in the Merger Agreement are satisfied and the Offer closes, Purchaser will be merged with and into the Company (the “Merger”) pursuant to Section 251(h) of the General Corporation Law of the State of Delaware (the “DGCL”), with the Company surviving the Merger and becoming a wholly-owned, indirect subsidiary of Steinhoff. At the effective time of the Merger, each Share (other than (i) Shares held in the treasury of the Company, (ii) Shares owned by the Company, Steinhoff or any of Steinhoff’s direct or indirect wholly-owned subsidiaries and (iii) Shares held by stockholders who have properly demanded appraisal of such Shares in accordance with the DGCL) will be cancelled and converted into the right to receive an amount in cash equal to the Offer Price, without interest. The Merger Agreement includes customary representations, warranties and covenants of the Company, Steinhoff, Stripes US Holding, Inc. and Purchaser. The Company has agreed to operate its business in the ordinary course until the effective time of the Merger. The Company has also agreed not to solicit or initiate discussions with third parties regarding other proposals to acquire the Company and to certain restrictions on its ability to respond to any such proposals. Steinhoff and the Company have agreed to take actions that may be required in order to obtain antitrust approval of the proposed transaction. The Merger Agreement also includes customary termination provisions for both the Company and Steinhoff, subject, in certain circumstances, to the payment by the Company of a termination fee of $73.2 million. The Company must pay Steinhoff the $73.2 million termination fee in the event the Merger Agreement is terminated (i) by Steinhoff following a change of recommendation by the Board, (ii) by the Company in order to enter into an agreement with respect to a third party proposal that the Board determines to be superior to Steinhoff’s or (iii) by Steinhoff as a result of certain breaches of the Merger Agreement provided that there is a third party proposal pending at the time of termination and, within 12 months of such termination, the Company enters into a business combination transaction of the type described in the relevant provision of the Merger Agreement and such transaction is, at any time thereafter, subsequently consummated, in each case, as is more particularly described in the Merger Agreement. The parties to the Merger Agreement are also entitled to an injunction or injunctions to prevent breaches of the Merger Agreement, and to specifically enforce the terms and provisions of the Merger Agreement. As of the date of this filing, the Company has incurred approximately $1.1 million of costs directly relating to the Potential Acquisition. On August 26, 2016, the Company received early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") with respect to the proposed acquisition of the Company by Steinhoff.

Business and Basis of Present23

Business and Basis of Presentation (Policies)	6 Months Ended
	Aug. 02, 2016
Business and Basis of Presentation
Basis of Presentation	The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X of the U.S. Securities and Exchange Commission (“SEC”), and they reflect, in the opinion of management, all normal recurring adjustments necessary to present fairly the Company’s financial position as of August 2, 2016, and the results of operations, other comprehensive income and cash flows for the periods presented. The Company’s historical and quarterly results of operations may not be indicative of the results that may be achieved for the full year or any future period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the Company’s most recent audited consolidated financial statements and related notes for the fiscal year ended February 2, 2016, which are included in the Company’s Annual Report on Form 10-K filed with the SEC on April 4, 2016 (the “Fiscal 2015 Annual Financial Statements”).
Accounting Estimates	The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of (i) assets and liabilities, (ii) disclosure of contingent assets and liabilities at the date of the financial statements and (iii) the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Estimates that are more susceptible to change in the near term are the accruals for sales returns and exchanges, product warranty costs, asset impairments, vendor incentives, self-insured liabilities, store closing costs and acquisition accounting fair values.
Reclassification	Certain reclassifications have been made to the prior year condensed consolidated statements of cash flows to segregate the gain (loss) from disposals of property and equipment from the previously reported activity that was included as a component of the change in noncurrent liabilities to conform to the current period financial statement presentation with no effect on the Company’s previously reported net cash provided by operating activities.
Fiscal Year	The Company’s fiscal year consists of 52 or 53 weeks ending on the Tuesday closest to January 31. The fiscal year ended February 2, 2016 (“Fiscal 2015”) consisted of 52 weeks. The fiscal year ending January 31, 2017 (“Fiscal 2016”) consists of 52 weeks.
Inventories	The Company acquired The Sleep Train, Inc. (“Sleep Train”) in October 2014 and HMK Mattress Holdings LLC, the holding company of Sleepy’s LLC and related entities (collectively, “Sleepy’s”) in February 2016. Both the Sleep Train and Sleepy’s legacy systems utilize the First-In, First-Out cost flow method (“FIFO”) of inventory costing. As a result, inventory of $44.1 million and $134.6 million as of February 2, 2016 and August 2, 2016, respectively, is valued at FIFO. The Company, as a whole, uses the Weighted Average costing method for inventory. The Company determined the difference between Weighted Average and FIFO costs was not material at February 2, 2016 and August 2, 2016, therefore the carrying value of all inventory is essentially at Weighted Average. Steps are in process to convert the acquired legacy inventory systems to the Company’s current ERP system; however, this is not expected to be completed until fiscal 2017. The Company will continue to assess and confirm that the carrying value of the FIFO inventory and the Weighted Average inventory is not materially different.
Interest rate swap derivative	The Company acquired from Sleepy’s an interest rate swap derivative used for the purpose of hedging exposure to changes of interest rates. This instrument has a notional amount of $3 9 million. The interest rate swap, carried at fair value, matures on October 10, 2019. The derivative is an economic hedge and changes in fair value of the derivative instrument are recognized as interest expense in the Company’s condensed consolidated statements of operations. In the twenty-six weeks ended August 2, 2016, the Company has recognized a gain of less than $0.1 million on the interest rate swap.
Project consolidation	A subsidiary of Sleepy’s entered into an arrangement in 2006 with an unrelated third party to purchase land as tenants in common and build office and warehouse space (the “Project”) that would be leased to Sleepy’s for its corporate headquarters. The Project is owned by a limited liability company (“LLC”), which is 50% owned by Sleepy’s. As a result of the Sleepy’s acquisition, this 50% interest is now owned by the Company. Pursuant to Accounting Standard Codification (“ASC”) 810-10, the LLC is considered a variable interest entity and the Company is considered the primary beneficiary. As a result, the Company accounts for the Project utilizing the consolidation method of accounting and all operating results and the balance sheet of the LLC is consolidated with a corresponding noncontrolling interest presented in the Company’s condensed consolidated financial statements. At August 2, 2016, the Company had $18.4 million of equity in the noncontrolling interest recorded on its condensed consolidated balance sheets. At August 2, 2016, the LLC had land and buildings with a net book value of $73.5 million, which are classified in property and equipment, net in the condensed consolidated balance sheets and $35.5 million of mortgage debt that is classified in long-term debt, net of current maturities in our condensed consolidated balance sheets. Although the mortgage debt is collateralized by the land and buildings, Sleepy’s is jointly and severally liable for the outstanding mortgage principal and interest payments on the mortgage debt. Only 50% of these assets and liabilities are attributable to the Company.

Recently Issued Accounting St24

Recently Issued Accounting Standards (Policies)	6 Months Ended
	Aug. 02, 2016
Recently Issued Accounting Standards
Recently Issued Accounting Standards	Adopted in this Report — In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, Interest- Imputation of Interest- Simplifying the Presentation of Debt Issuance Costs , which requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. This ASU is effective on a retrospective basis for annual reporting periods beginning after December 15, 2015, however early adoption is permitted. The Company has retrospectively applied the change in accounting principle as of May 3, 2016. As such, the prior year amounts of debt issuance costs previously reported as a component of other long-term assets were recast and resulted in a decrease of $7.2 million in other long-term assets and long-term debt, net of current maturities, respectively, in the Company’s condensed consolidated balance sheet as of February 2, 2016. The adoption of this ASU did not have an impact on the Company’s results of operations, cash flows or equity. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations- Simplifying the Accounting for Measurement-Period Adjustments , which requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. This ASU is effective on a prospective basis for annual reporting periods beginning after December 15, 2015, however early adoption is permitted. The Company has adopted this ASU on a prospective basis beginning on February 3, 2016. The adoption of this ASU impacted the Company’s adjustment to provisional amounts recorded in the 2016 acquisition discussed in Note 3. Not Yet Adopted in this Report — In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , that outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The ASU is based on the core principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. Entities have the option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard. This ASU is effective for fiscal years beginning after December 15, 2017 including interim periods within that reporting period. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations, as an amendment to ASU 2014-09. The amendment clarifies how to identify the unit of accounting for the principal versus agent evaluation, how to apply the control principle to certain types of arrangements, such as service transaction, and reframed the indicators in the guidance to focus on evidence that an entity is acting as a principal rather than as an agent. In April 2016, the FASB issued ASU No. 2016-10, “ Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing ”, which also amends certain aspects of ASU 2014-09 , specifically the standard’s guidance on identifying performance obligations and the implementation guidance on licensing. The amendments clarify when promised goods or services are separately identifiable (i.e., distinct within the context of a contract), an important step in determining whether goods and services should be accounted for as separate performance obligations. In addition, the amendments allow entities to disregard goods or services that are immaterial in the context of a contract and provide an accounting policy election for accounting for certain shipping and handling activities. The amendments also clarify how an entity should evaluate the nature of its promise in granting a license of intellectual property (IP), which will determine whether the entity recognizes revenue over time or at a point in time. The amendments revise the guidance to address how entities should apply the exception for sales- and usage-based royalties to licenses of IP, recognize revenue for licenses that are not separate performance obligations and evaluate different types of license restrictions (e.g., time-based, geography-based). In May 2016, the FASB issued ASU 2016-12, " Revenue from Contracts with Customers - Narrow Scope Improvements and Practical Expedients ", to reduce the risk of diversity in practice for certain aspects in ASU 2014-09, including collectability, noncash consideration, presentation of sales tax and transition. The new guidance’s effective date and transition provisions are aligned with the requirements in the new revenue standard, which is not yet effective. The Company is currently evaluating the guidance, including the amendments, to determine the Company's adoption method and the effect it will have on the Company's condensed consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases , which requires any organization that lease assets to recognize the rights and obligations created by those leases on the balance sheet. This ASU is effective for fiscal years beginning after December 15, 2018 including interim periods within that reporting period, however early adoption is permitted. The Company will apply this ASU on a retrospective basis beginning in fiscal year 2019. The Company is currently evaluating the guidance to determine the effect it will have on the Company's condensed consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation- Improvements to Employee Share-Based Payment Accounting , which involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under the new standard, income tax benefits and deficiencies are to be recognized as income tax expense or benefit in the income statement and the tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. An entity should also recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. Excess tax benefits should be classified along with other income tax cash flows as an operating activity. In regards to forfeitures, the entity may make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. This ASU is effective for fiscal years beginning after December 15, 2016 including interim periods within that reporting period, however early adoption is permitted. The Company is currently evaluating the guidance to determine the Company's adoption method and the effect it will have on the Company's condensed consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments , which will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2017, and will require adoption on a retrospective basis. The Company is currently evaluating the impact the application of ASU 2016-15 will have on the Company’s condensed consolidated financial statements .

Acquisitions (Tables)

Acquisitions (Tables)	6 Months Ended
	Aug. 02, 2016
Acquisitions
Schedule of allocation of the preliminary purchase price to the acquired assets and liabilities	The allocation of the preliminary purchase price to the acquired assets and liabilities, based on management’s estimate of their fair values on the acquisition date, is as follows (in thousands): Sleepy's Cash $ Accounts receivable Inventories Prepaid expenses and other current assets Property and equipment Intangible assets Goodwill Net favorable lease rights Other assets Notes payable and current maturities of long-term debt Accounts payable Accrued liabilities Customer deposits Long-term debt, net of current maturities Deferred income tax liability Other noncurrent liabilities Noncontrolling interest Fair value of assets and liabilities acquired Reconciliation to cash used in acquisition: Fair value of equity consideration transferred Cash of acquired business Cash used in acquisition, net of cash acquired $
Schedule of consolidated financial information of the company on a pro forma basis	The unaudited financial information set forth below has been compiled from the historical financial statements and other information, but is not necessarily indicative of the results that actually would have been achieved had the transactions occurred on the dates indicated or that may be achieved in the future (amounts in thousands, except per share amounts): Thirteen Weeks Ended August 4, 2015 Twenty-Six Weeks Ended August 4, 2015 As Reported Pro Forma Adjustments Pro Forma As Reported Pro Forma Pro Forma Net sales $ $ $ $ $ $ Net income (loss) Diluted net income (loss) per common share $ $ $ $ $ $

Fair Value of Financial Instr26

Fair Value of Financial Instruments (Tables)	6 Months Ended
	Aug. 02, 2016
Fair Value of Financial Instruments
Schedule of assets requiring recurring or non-recurring fair value measurements	Net Book Value as of February 2, Fair Value Measurements Fiscal 2015 2016 Level 1 Level 2 Level 3 Impairments Nonqualified deferred compensation plan $ $ — $ $ — $ — Property and equipment requiring impairment review $ $ — $ — $ $ Senior Credit Facility term loans $ $ — $ $ — $ — Net Book Value as of August 2, Fair Value Measurements Fiscal 2016 2016 Level 1 Level 2 Level 3 Impairments Nonqualified deferred compensation plan $ $ — $ $ — $ — Intangible assets requiring impairment review $ $ — $ — $ $ Interest rate swap liability $ $ — $ $ — $ — Property and equipment requiring impairment review $ $ — $ — $ $ Senior Credit Facility term loans $ $ — $ $ — $ —
Summary of the significant unobservable inputs used in the fair value measurement of the Company's Level 3 assets in which impairment testing was performed	Impairment testing performed as of February 2, 2016 Unobservable Valuation Technique Significant Unobservable Inputs Input Range Property and Equipment Impairment Testing Income approach WACC 13.5% Impairment testing performed as of August 2 2016 Unobservable Valuation Technique Significant Unobservable Inputs Input Range Intangible Asset Impairment Testing Income approach WACC 7.5% to 11.5% Royalty rate 1.0% to 2.0% Property and Equipment Impairment Testing Income approach WACC 13.5%

Property and Equipment (Tables)

Property and Equipment (Tables)	6 Months Ended
	Aug. 02, 2016
Property and Equipment.
Schedule of property and equipment	Property and equipment consists of the following (in thousands): February 2, August 2, 2016 2016 Land $ — $ Building — Leasehold improvements Equipment, computers and software Store signs Furniture and fixtures Vehicles Property and equipment Accumulated depreciation Property and equipment, net $ $

Goodwill and Intangible Assets

Goodwill and Intangible Assets (Tables)	6 Months Ended
	Aug. 02, 2016
Goodwill and Intangible Assets
Schedule of changes in the carrying amounts of goodwill and non-amortizable intangible assets	A summary of the changes in the carrying amounts of goodwill and non-amortizable assets for the twenty-six weeks ended August 2, 2016 is as follows (in thousands): Nonamortizable Goodwill Intangibles Balance at February 2, 2016 $ $ Prior year business acquisition adjustment (See Note 3) — Current period business acquisitions (see Note 3) — Impairment of tradenames — Reclassification of tradenames to definite lived intangible assets — Balance at August 2, 2016 $ $
Schedule of changes in the carrying amounts of amortizable intangible assets	A summary of the changes in the carrying amounts of amortizable intangible assets for the twenty-six weeks ended August 2, 2016 is as follows (in thousands): Net Accumulated Carrying Gross Cost Amortization Value Balance at February 2, 2016 $ $ $ Current period business acquisitions (See Note 3) — Reclassification of tradenames to definite lived intangible assets Impairment of tradenames Trademarks defense — Amortization expense — Balance at August 2, 2016 $ $ $
Schedule of components of intangible assets	The components of intangible assets were as follows (dollar amounts in thousands): February 2, 2016 August 2, 2016 Gross Gross Useful Life Carrying Accumulated Net Carrying Accumulated Net (Years) Amount Amortization Amount Amount Amortization Amount Nonamortizing: Trade names and trademarks $ $ — $ $ $ — $ Amortizing: Franchise agreement rights 20 Acquired trade names and trademarks 1 - 10 Software technology 15 Non-compete agreements 3 - 5 Intangible assets, net $ $ $ $ $ $
Schedule of amortization expense for intangible assets	The weighted average amortization period remaining for intangible assets is five years. As of August 2, 2016, amortization expense for intangible assets is expected to be as follows (in thousands): Fiscal Year Remainder of 2016 $ 2017 $ 2018 $ 2019 $ 2020 $ Thereafter $

Notes Payable and Long-term D29

Notes Payable and Long-term Debt (Tables)	6 Months Ended
	Aug. 02, 2016
Notes Payable and Long-term Debt
Schedule of notes payable and long-term debt	Notes payable and long-term debt consists of the following (in thousands): February 2, August 2, 2016 2016 Senior Credit Facility - term loans $ $ Less: Senior Credit Facility - term loans discount Senior Credit Facility - revolver borrowings — Capital leases — Equipment financing and other notes payable Total long-term debt Less: deferred financing costs Total debt, net Less: current maturities of long-term debt Long-term debt, net of current maturities $ $
Schedule of future maturities of notes payable and long-term debt	The aggregate maturities of notes payable and long‑term debt at August 2, 2016 were as follows (in thousands): Fiscal Year Remainder of 2016 $ 2017 2018 2019 2020 Thereafter Total $

Prepaid Expenses and Other Cu30

Prepaid Expenses and Other Current Assets (Tables)	6 Months Ended
	Aug. 02, 2016
Prepaid Expenses and Other Current Assets
Schedule of prepaid expenses and other current assets	Prepaid expenses and other current assets consist of the following (in thousands): February 2, August 2, 2016 2016 Prepaid rent $ $ Prepaid income taxes Prepaid insurance Prepaid computer software and hardware services Prepaid special event space rental Prepaid point-of-purchase inventory Prepaid advertising Other Total $ $

Accrued Liabilities and Other31

Accrued Liabilities and Other Noncurrent Liabilities (Tables)	6 Months Ended
	Aug. 02, 2016
Accrued Liabilities and Other Noncurrent Liabilities
Schedule of accrued liabilities	Accrued liabilities consist of the following (in thousands): February 2, August 2, 2016 2016 Unbilled advertising $ $ Insurance Employee wages, payroll taxes and withholdings Sales and property tax Closed store lease reserve Product warranty returns Utilities Accrued employee compensated absences Accrued rent Accrued construction in ‑ progress costs Sales returns and exchanges Accrued interest Other Total $ $
Schedule of other noncurrent liabilities	February 2, August 2, 2016 2016 Deferred lease liabilities $ $ Deferred vendor incentives Product warranty returns, less current portion Other Total $ $

Earnings Per Share (Tables)

Earnings Per Share (Tables)	6 Months Ended
	Aug. 02, 2016
Earnings Per Share
Schedule of reconciliation of the weighted average shares outstanding used in the earnings per common share calculations	Thirteen Weeks Ended Twenty-Six Weeks Ended August 4, August 2, August 4, August 2, 2015 2016 2015 2016 Basic weighted average shares outstanding Effect of dilutive securities: Stock options — — Restricted shares — — Diluted weighted average shares outstanding

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
	Aug. 02, 2016
Stock-Based Compensation
Summary of the Company's stock options grants, exercises, and forfeitures	Weighted Average Stock Exercise Price Options Per Share Outstanding, as of February 2, 2016 $ Granted (a) $ Exercised (b) $ Forfeited $ Outstanding, as of August 2, 2016 (c) $ Exercisable, as of August 2, 2016 (d) $ (a) The weighted average grant date fair value of stock options granted during the twenty-six weeks ended August 2, 2016 was $21.86. (b) The aggregate intrinsic value of stock options exercised during the twenty-six weeks ended August 2, 2016 was $2.5 million. The weighted average market price of shares exercised during the twenty-six weeks ended August 2, 2016 was $36.69. (c) Stock options outstanding as of August 2, 2016 have a weighted average remaining contractual term of 6.18 years and an aggregate intrinsic value of $3.7 million based on the market value of the Company’s common stock on August 2, 2016. (d) Stock options exercisable as of August 2, 2016 have a weighted average remaining contractual term of 5.68 years and an aggregate intrinsic value of $3.0 million based on the market value of the Company’s common stock on August 2, 2016.
Schedule of outstanding and exercisable stock options by range of exercise prices	Range of Exercise Prices Outstanding as of August 2, 2016 (in thousands) Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Exercisable as of August 2, 2016 (in thousands) Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Time Based $19.00 - $29.26 $ $ $34.65 - $57.05 $ $ $60.74 - $60.74 $ — — $ — Market Based $19.00 - $29.26 $ $ $34.65 - $57.05 $ $
Assumptions used to calculate the fair value of stock options on the grant date	Twenty-Six Weeks Ended August 2, 2016 Weighted average expected life (in years) Volatility factor % Dividend yield % Risk-free interest rate 1.23 to 1.35 %
Summary of the Company's restricted stock	Weighted Average Restricted Fair Shares Value Outstanding, as of February 2, 2016 $ Granted (a) $ Vested (b) $ Forfeited $ Unvested, as of August 2, 2016 $ (a) The total grant-date fair value of restricted stock awards granted during the twenty-six weeks ended August 2, 2016 was $3.0 million. (b) The total fair value of awards vested during the twenty-six weeks ended August 2, 2016 was $1.3 million.
Assumptions used to calculate the fair value of restricted stock on the grant date	Twenty-Six Weeks Ended August 2, 2016 Weighted average expected life (in years) Volatility factor % Dividend yield % Risk-free interest rate 1.05 to 1.22 %

Commitments and Contingencies (

Commitments and Contingencies (Tables)	6 Months Ended
	Aug. 02, 2016
Properties operated by the company
Schedule of future minimum lease payments under operating leases	Future minimum lease payments under operating leases as of August 2, 2016, related to properties operated by the Company is as follows (in thousands): Fiscal Year Remainder of 2016 $ 2017 2018 2019 2020 Thereafter Total $
Properties no longer operated by the company
Schedule of future minimum lease payments under operating leases	Future minimum lease payments under operating leases as of August 2, 2016, associated with properties no longer operated by the Company, and the related future sublease rentals is as follows (in thousands): Company’s Sublease Fiscal Year Commitment Rentals Remainder of 2016 $ $ 2017 2018 2019 2020 Thereafter — — Total $ $

Business and Basis of Present35

Business and Basis of Presentation (Details) $ in Thousands	6 Months Ended	12 Months Ended
	Aug. 02, 2016USD ($)storestate	Jan. 31, 2017	Feb. 02, 2016USD ($)	Feb. 05, 2016storestate
Business and Basis of Presentation
Number of states | state	49
Length of fiscal year			364 days
Inventory valued at FIFO	$ 134,600		$ 44,100
Property and equipment, net	455,863		$ 317,451
Noncontrolling interest	$ 18,431
Project
Business and Basis of Presentation
Consolidated entity ownership (as a percent)	50.00%
Noncontrolling interest	$ 18,400
Minimum
Business and Basis of Presentation
Number of mattress specialty stores | store	3,600
Length of fiscal year	364 days
Maximum
Business and Basis of Presentation
Length of fiscal year	371 days
Plan
Business and Basis of Presentation
Length of fiscal year		364 days
Sleepy's
Business and Basis of Presentation
Number of mattress specialty stores | store				1,065
Number of states | state				17
Sleepy's | Project
Business and Basis of Presentation
Consolidated entity ownership (as a percent)	50.00%			50.00%
Mortgage Payable	$ 35,500
Sleepy's | Interest rate swap liability
Business and Basis of Presentation
Notional amount of interest rate swaps	39,000
Sleepy's | Property plant and equipment net | Project
Business and Basis of Presentation
Property and equipment, net	73,500
Sleepy's | Long term debt net | Project
Business and Basis of Presentation
Mortgage Payable	35,500
Sleepy's | Maximum | Interest rate swap liability
Business and Basis of Presentation
Unrealized gain	$ 100

Recently Issued Accounting St36

Recently Issued Accounting Standards (Details) - USD ($) $ in Thousands	Aug. 02, 2016	Feb. 02, 2016
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Other noncurrent assets, net	$ 22,291	$ 16,496
Long-term debt, net of current maturities	$ 1,340,286	675,033
ASU - Debt Issuance Costs
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Other noncurrent assets, net		(7,200)
Long-term debt, net of current maturities		$ (7,200)

Acquisitions - 2016 (Details)

Acquisitions - 2016 (Details) $ / shares in Units, $ in Thousands	Feb. 05, 2016USD ($)employeestorestate$ / sharesshares	Aug. 02, 2016USD ($)storestate$ / shares	Aug. 04, 2015USD ($)	Aug. 02, 2016USD ($)storestate$ / shares	Aug. 02, 2016USD ($)storestate$ / shares	Aug. 04, 2015USD ($)	Feb. 02, 2016USD ($)$ / shares
Business acquisition
Number of states | state		49		49	49
Reconciliation to cash used for acquisition:
Equity issued in acquisitions by subsidiary					$ 36,831
Common stock, par value (in dollars per share) | $ / shares		$ 0.01		$ 0.01	$ 0.01		$ 0.01
Allocation of the purchase price to the acquired assets and liabilities
Goodwill		$ 1,490,167		$ 1,490,167	$ 1,490,167		$ 826,728
Cash used in acquisitions, net of cash acquired					725,031	$ (119)
Additional information
Net income			$ 21,881			$ 27,359
Prior year business acquisition adjustment					3
Sleepy's
Business acquisition
Number of mattress specialty stores | store	1,065
Number of states | state	17
Number of employees | employee	3,300
Future annual cash income tax benefits expected	$ 11,500
Future annual income tax benefits expected period	15 years
Reconciliation to cash used for acquisition:
Purchase price placed in escrow	$ 20,000
Shares issued for acquisition (in shares) | shares	1,062,936
Common stock, par value (in dollars per share) | $ / shares	$ 0.01
Allocation of the purchase price to the acquired assets and liabilities
Cash	$ 34,436
Accounts receivable	3,482
Inventories	84,564
Prepaid expenses and other current assets	23,296
Property and equipment	192,355
Intangible assets	31,500
Goodwill	663,436
Net favorable lease rights	7,449
Other assets	5,796
Notes payable and current maturities of long-term debt	(2,972)
Accounts payable	(71,122)
Accrued liabilities	(65,951)
Customer deposits	(16,630)
Long-term debt, net of current maturities	(45,687)
Deferred income tax liability	(27,559)
Other noncurrent liabilities	(1,744)
Noncontrolling interest	(18,354)
Fair value of assets and liabilities acquired	796,295
Fair value of equity consideration transferred	(36,831)
Cash of acquired businesses	(34,436)
Cash used in acquisitions, net of cash acquired	725,028
Additional information
Goodwill acquired, deductible for tax purposes	$ 460,500
Goodwill, tax deductible period	15 years
Net sales included in the entity's consolidated statement of operations				528,200
Earnings (loss) included in operations				$ 17,400
Acquisition-related costs		$ 400			$ 6,800
ABL-2014 Senior Credit Facility-revolver borrowings | Sleepy's
Reconciliation to cash used for acquisition:
Debt issued	$ 749,200
Share purchase agreement | Sleepy's
Reconciliation to cash used for acquisition:
Shares issued for acquisition (in shares) | shares	699,300
Issue price of shares (in dollars per share) | $ / shares	$ 35.75
Project
Additional information
Ownership percentage		50.00%		50.00%	50.00%
Project | Sleepy's
Additional information
Ownership percentage	50.00%	50.00%		50.00%	50.00%
Trade names and trademarks | Sleepy's
Allocation of the purchase price to the acquired assets and liabilities
Intangible assets	$ 26,800
Non-compete agreements | Sleepy's
Allocation of the purchase price to the acquired assets and liabilities
Intangible assets	$ 4,700
Minimum
Business acquisition
Number of mattress specialty stores | store		3,600		3,600	3,600
Minimum | Trade names and trademarks
Additional information
Useful Life					1 year
Minimum | Trade names and trademarks | Sleepy's
Additional information
Useful Life	1 year
Minimum | Non-compete agreements
Additional information
Useful Life					3 years
Maximum | Trade names and trademarks
Additional information
Useful Life					10 years
Maximum | Trade names and trademarks | Sleepy's
Additional information
Useful Life	10 years
Maximum | Non-compete agreements
Additional information
Useful Life					5 years
Weighted Average | Non-compete agreements | Sleepy's
Additional information
Useful Life	5 years
Provisional Adjustment | Sleepy's
Allocation of the purchase price to the acquired assets and liabilities
Property and equipment		$ 3,100		$ 3,100	$ 3,100
Intangible assets		(1,800)		(1,800)	(1,800)
Goodwill		11,000		11,000	11,000
Accrued liabilities		(11,500)		$ (11,500)	(11,500)
Purchase price		800
Additional information
Net income		$ (100)
Provisional Adjustment | Maximum | Double J-RD, LLC
Additional information
Prior year business acquisition adjustment					$ 100

Acquisitions - Pro Forma Inform

Acquisitions - Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended			6 Months Ended
	Aug. 02, 2016	May 03, 2016	Aug. 04, 2015	Aug. 02, 2016	Aug. 04, 2015
Pro forma information
Net sales	$ 980,011		$ 661,064	$ 1,819,403	$ 1,223,618
Net income			$ 21,881		$ 27,359
Diluted net income (loss) per common share (in dollars per share)	$ (0.06)		$ 0.61	$ (3.27)	$ 0.77
Net sales, pro forma			$ 973,201		$ 1,784,587
Net income (loss), pro forma			$ 27,218		$ 22,663
Diluted net income (loss) per common share, pro forma (in dollars per share)			$ 0.76		$ 0.64
Pro Forma Adjustments
Pro forma information
Net sales			$ 312,137		$ 560,969
Net income			$ 5,337		$ (4,696)
Diluted net income (loss) per common share (in dollars per share)			$ 0.15		$ (0.13)
Sleepy's
Pro forma information
Acquisition period		3 days

Fair Value of Financial Instr39

Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Aug. 02, 2016	Feb. 02, 2016
Fair Value Measurements
Interest rate swap liability	$ 1,200
Net carrying value, impairment of tradenames	40,967
Level 2
Fair Value Measurements
Interest rate swap liability	1,200
Recurring
Fair Value Measurements
Nonqualified deferred compensation plan	1,885	$ 1,698
Recurring | Level 2
Fair Value Measurements
Nonqualified deferred compensation plan	1,885	1,698
Non-recurring
Fair Value Measurements
Intangible assets requiring impairment review	14,579
Property and equipment requiring impairment review	1,780	727
Non-recurring | Level 3
Fair Value Measurements
Intangible assets requiring impairment review	14,579
Property and equipment requiring impairment review	1,780	727
ABL-2014 Senior Credit Facility-term loans
Fair Value Measurements
Senior Credit Facility term loans	1,282,713	685,113
ABL-2014 Senior Credit Facility-term loans | Level 2
Fair Value Measurements
Senior Credit Facility term loans	1,296,279	670,270
Intangible Asset | Non-recurring
Fair Value Measurements
Property impairments	138,726
Property and Equipment | Non-recurring
Fair Value Measurements
Property impairments	$ 14,438	$ 1,525

Fair Value of Financial Instr40

Fair Value of Financial Instruments - Level 3 (Details) - Level 3 - Income approach	6 Months Ended
	Aug. 02, 2016
Property and Equipment
Valuation of Level 3 Financial Instruments
Weighted average cost of capital	13.50%
Minimum | Intangible Asset
Valuation of Level 3 Financial Instruments
Weighted average cost of capital	7.50%
Royalty rate	1.00%
Maximum | Intangible Asset
Valuation of Level 3 Financial Instruments
Weighted average cost of capital	11.50%
Royalty rate	2.00%

Property and Equipment (Details

Property and Equipment (Details) $ in Thousands	Jun. 20, 2016item	Jul. 11, 2016USD ($)store	Aug. 02, 2016USD ($)	May 03, 2016USD ($)	Aug. 04, 2015USD ($)	Aug. 02, 2016USD ($)	Aug. 04, 2015USD ($)	Feb. 05, 2016store	Feb. 02, 2016USD ($)
Property and Equipment
Property and equipment, gross			$ 693,077			$ 693,077			$ 518,525
Accumulated depreciation			(237,214)			(237,214)			(201,074)
Property and equipment, net			455,863			455,863			317,451
Depreciation expense						43,373	$ 28,746
Impairment charges			700		$ 4,500	700	$ 4,500
Impairment charge for stores to be closed				$ 6,900
Sales and leaseback
Sales leaseback
Number of warehouses | item	2
Number of mattress specialty stores | store		15
Gross proceeds from sales leaseback		$ 70,900
Net proceeds from sales leaseback after transaction costs		68,500
Mortgage loan paid in property sale		9,400
Escrow for property sales		$ 2,600
Leaseback loss			1,700
Leaseback deferred gain			14,700			14,700
Land
Property and Equipment
Property and equipment, gross			19,429			19,429
Building
Property and Equipment
Property and equipment, gross			62,816			62,816
Leasehold Improvements
Property and Equipment
Property and equipment, gross			392,444			392,444			340,029
Equipment Computers And Software
Property and Equipment
Property and equipment, gross			116,826			116,826			83,879
Store Signs
Property and Equipment
Property and equipment, gross			65,318			65,318			56,149
Furniture And Fixtures
Property and Equipment
Property and equipment, gross			34,765			34,765			36,730
Vehicles
Property and Equipment
Property and equipment, gross			1,479			1,479			$ 1,738
Other Fixed Assets
Property and Equipment
Impairment charges			$ 1,000			$ 3,000
Sleepy's
Sales leaseback
Number of mattress specialty stores | store								1,065

Goodwill and Intangible Asset42

Goodwill and Intangible Assets - Goodwill and Nonamortizable Intangibles (Details) $ in Thousands	6 Months Ended
	Aug. 02, 2016USD ($)
Changes in the carrying amounts of goodwill
Balance at the beginning of the year	$ 826,728
Prior year business acquisition adjustment	3
Current period business acquisitions	663,436
Balance at the end of the period	1,490,167
Changes in the carrying amounts of nonamortizable intangible assets
Balance at the beginning of the year	178,358
Impairment of tradenames	(97,759)
Reclassification of tradename to definite lived intangible assets	(8,953)
Balance at the end of the year	71,646
Trade name
Changes in the carrying amounts of nonamortizable intangible assets
Balance at the beginning of the year	178,358
Balance at the end of the year	$ 71,646

Goodwill and Intangible Asset43

Goodwill and Intangible Assets - Amortizable Intangibles (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 02, 2016	Aug. 04, 2015	Aug. 02, 2016	Aug. 04, 2015
Gross Cost
Gross Cost, Balance at the beginning of the year			$ 44,936
Current period business acquisitions			31,500
Reclassification of tradename to definite lived intangible assets			8,953
Gross cost, impairment of tradenames			(45,694)
Trademarks defense			129
Gross Cost, Balance at the end of the year	$ 39,824		39,824
Change in Accumulated Amortization
Accumulated Amortization, Balance at the beginning of the year			(8,352)
Accumulated amortization of impairment of tradenames			4,727
Amortization expense	(4,100)	$ (700)	(8,807)	$ (1,400)
Accumulated Amortization, Balance at the end of the year	(12,432)		(12,432)
Net Carrying Value
Net Carrying Value, Balance at the beginning of the year			36,584
Current period business acquisitions			31,500
Reclassification of Sleep Train tradename to definite lived intangible assets			8,953
Impairment of tradenames			(40,967)
Trademarks defense			129
Amortization expense	(4,100)	$ (700)	(8,807)	$ (1,400)
Net Carrying Value, Balance at the end of the year	$ 27,392		$ 27,392

Goodwill and Intangible Asset44

Goodwill and Intangible Assets - Components of Intangible Assets (Details) - USD ($) $ in Thousands	6 Months Ended
	Aug. 02, 2016	Feb. 02, 2016
Nonamortizing:
Trade names and trademarks	$ 71,646	$ 178,358
Amortizing:
Amortizing intangible assets, gross	39,824	44,936
Accumulated amortization	12,432	8,352
Amortizing intangible assets, net	27,392	36,584
Intangible assets, gross	111,470	223,294
Intangible assets, net	$ 99,038	214,942
Franchise agreement rights
Amortizing:
Useful Life	20 years
Amortizing intangible assets, gross	$ 5,907	5,907
Accumulated amortization	1,490	1,266
Amortizing intangible assets, net	4,417	4,641
Trade names and trademarks
Amortizing:
Amortizing intangible assets, gross	25,160	34,972
Accumulated amortization	8,689	5,518
Amortizing intangible assets, net	$ 16,471	29,454
Trade names and trademarks | Minimum
Amortizing:
Useful Life	1 year
Trade names and trademarks | Maximum
Amortizing:
Useful Life	10 years
Software technology
Amortizing:
Useful Life	15 years
Amortizing intangible assets, gross	$ 1,573	1,573
Accumulated amortization	328	275
Amortizing intangible assets, net	1,245	1,298
Non-compete agreements
Amortizing:
Amortizing intangible assets, gross	7,184	2,484
Accumulated amortization	1,925	1,293
Amortizing intangible assets, net	$ 5,259	1,191
Non-compete agreements | Minimum
Amortizing:
Useful Life	3 years
Non-compete agreements | Maximum
Amortizing:
Useful Life	5 years
Trade name
Nonamortizing:
Trade names and trademarks	$ 71,646	$ 178,358

Goodwill and Intangible Asset45

Goodwill and Intangible Assets - Amortization Expense (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended
	Aug. 02, 2016	May 03, 2016	Aug. 04, 2015	Aug. 02, 2016	Aug. 04, 2015
Goodwill and Intangible Assets
Amortization of intangible assets	$ 4,100		$ 700	$ 8,807	$ 1,400
Remaining weighted average amortization period				5 years
Expected amortization expense
Remainder of 2016	9,928			$ 9,928
2,017	4,352			4,352
2,018	2,434			2,434
2,019	2,386			2,386
2,020	2,372			2,372
Thereafter	5,920			5,920
Goodwill impairment charge	$ 0		$ 0	0	$ 0
Intangible asset impairment charge		$ 138,700		$ 138,726

Notes Payable and Long-term D46

Notes Payable and Long-term Debt (Details) $ in Thousands	Oct. 20, 2014USD ($)item	Aug. 02, 2016USD ($)	Feb. 05, 2016USD ($)	Feb. 02, 2016USD ($)
Notes Payable and Long-term Debt
Aggregate principal amount outstanding		$ 1,370,122		$ 690,921
Less: deferred financing costs		(13,552)		(7,224)
Total long-term debt		1,356,570		683,697
Less: Current maturities of long-term debt		16,284		8,664
Long-term debt, net of current maturities		1,340,286		675,033
Capital leases
Notes Payable and Long-term Debt
Aggregate principal amount outstanding		9,458
ABL-2014 Senior Credit Facility-term loans
Notes Payable and Long-term Debt
Aggregate principal amount outstanding		1,306,075		691,000
Unamortized discount		$ (23,362)		(5,887)
Maximum borrowing capacity under credit facility	$ 720,000
Amount of increase in revolving credit facility			$ 665,000
Number of financial covenants | item	1
Fixed charge ratio (as a percent)	5.5	3.9
ABL-2014 Senior Credit Facility-term loans | LIBOR
Notes Payable and Long-term Debt
Applicable margin rate (as a percent)	5.25%	5.25%
Interest rate (as a percent)		1.00%
ABL-2014 Senior Credit Facility-term loans | Federal Funds Rate
Notes Payable and Long-term Debt
Applicable margin rate (as a percent)	4.25%
ABL-2014 Senior Credit Facility-revolver borrowings
Notes Payable and Long-term Debt
Aggregate principal amount outstanding		$ 40,000
Maximum borrowing capacity under credit facility	$ 125,000		200,000
Amount of increase in revolving credit facility			$ 75,000
Increase in aggregate commitments that may be requested under facility terms	$ 50,000
Issuance fee (as a percent)	0.125%
Commitment fee (as a percent)	0.25%
Amount outstanding under credit facility		40,000
Amount available for borrowings under credit facility		$ 114,400
Number of financial covenants | item	1
Fixed charge ratio (as a percent)		2.53
ABL-2014 Senior Credit Facility-revolver borrowings | Minimum
Notes Payable and Long-term Debt
Fixed charge ratio (as a percent)	1
ABL-2014 Senior Credit Facility-revolver borrowings | LIBOR | Minimum
Notes Payable and Long-term Debt
Applicable margin rate (as a percent)	1.25%
ABL-2014 Senior Credit Facility-revolver borrowings | LIBOR | Maximum
Notes Payable and Long-term Debt
Applicable margin rate (as a percent)	1.50%
ABL-2014 Senior Credit Facility-revolver borrowings | Federal Funds Rate | Minimum
Notes Payable and Long-term Debt
Applicable margin rate (as a percent)	0.25%
ABL-2014 Senior Credit Facility-revolver borrowings | Federal Funds Rate | Maximum
Notes Payable and Long-term Debt
Applicable margin rate (as a percent)	0.50%
Letter of Credit Facility
Notes Payable and Long-term Debt
Maximum borrowing capacity under credit facility	$ 60,000
Outstanding letters of credit		$ 12,300
Swing Line Facility
Notes Payable and Long-term Debt
Maximum borrowing capacity under credit facility	$ 20,000
Equipment financing and other notes payable
Notes Payable and Long-term Debt
Aggregate principal amount outstanding		$ 37,951		$ 5,808

Notes Payable and Long-term D47

Notes Payable and Long-term Debt - Equipment Financing and Other (Details) - USD ($) $ in Thousands	Aug. 02, 2016	Feb. 05, 2016	Feb. 02, 2016
Equipment Financing and Other Short-Term Notes Payable
Long-term debt	$ 1,370,122		$ 690,921
Capital leases
Equipment Financing and Other Short-Term Notes Payable
Long-term debt	9,458
Capital leases | Corporate Office Headquarters
Equipment Financing and Other Short-Term Notes Payable
Outstanding capital lease	$ 8,000
Interest rate (as a percent)	4.10%
Capital leases | Information Technology and Warehouse Equipment
Equipment Financing and Other Short-Term Notes Payable
Outstanding capital lease	$ 1,500
Equipment financing and other notes payable
Equipment Financing and Other Short-Term Notes Payable
Long-term debt	37,951		$ 5,808
Equipment financing and other notes payable | Sleepy's
Equipment Financing and Other Short-Term Notes Payable
Mortgage Payable	$ 37,900
Equipment financing and other notes payable | Sleepy's | Maximum
Equipment Financing and Other Short-Term Notes Payable
Interest rate (as a percent)	5.60%
Equipment financing and other notes payable | Sleepy's | Minimum
Equipment Financing and Other Short-Term Notes Payable
Interest rate (as a percent)	3.60%
Project
Equipment Financing and Other Short-Term Notes Payable
Ownership percentage	50.00%
Project | Sleepy's
Equipment Financing and Other Short-Term Notes Payable
Mortgage Payable	$ 35,500
Ownership percentage	50.00%	50.00%

Notes Payable and Long-term D48

Notes Payable and Long-term Debt - Maturities (Details) - USD ($) $ in Thousands	Aug. 02, 2016	Feb. 02, 2016
The aggregate maturities of notes payable and long-term debt
Remainder of 2016	$ 5,754
2,017	10,737
2,018	10,716
2,019	40,593
2,020	8,221
Thereafter	1,280,549
Total long-term debt	$ 1,356,570	$ 683,697

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 02, 2016	Aug. 04, 2015	Aug. 02, 2016	Aug. 04, 2015	Feb. 03, 2015
Income Taxes
Income tax expense (benefit)	$ (408)	$ 13,678	$ (73,207)	$ 16,778
Effective tax rate (as a percent)			37.80%	38.00%
Federal statutory rate (as a percent)			35.00%
Decrease in unrecognized tax benefits resulting from settlement of an audit				$ 400
Net operating loss carryforwards					$ 3,500
Operating loss carryforward estimated use current year	2,800		$ 2,800
Operating loss carryforward estimated use next fiscal year	$ 700		$ 700

Prepaid Expenses and Other Cu50

Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Aug. 02, 2016	Feb. 02, 2016
Prepaid Expenses and Other Current Assets
Prepaid rent	$ 51,941	$ 32,098
Prepaid income taxes	45,091	2,722
Prepaid insurance	10,686	5,752
Prepaid computer software and hardware services	9,802	3,317
Prepaid special event space rental	3,203	1,924
Prepaid point-of-purchase inventory	1,837	2,032
Prepaid advertising	671	1,903
Other	3,507	5,428
Prepaid expenses and other current assets	$ 126,738	$ 55,176

Accrued Liabilities and Other51

Accrued Liabilities and Other Noncurrent Liabilities (Details) - USD ($) $ in Thousands	Aug. 02, 2016	Feb. 02, 2016
Accrued liabilities
Unbilled advertising	$ 46,661	$ 22,452
Insurance	36,520	8,837
Employee wages, payroll taxes and withholdings	25,072	13,537
Sales and property tax	21,265	10,642
Closed store lease reserve	6,875	630
Product warranty returns	5,267	4,830
Utilities	4,846	2,391
Accrued employee compensated absences	4,756	4,756
Accrued rent	4,393	3,526
Accrued construction in-progress costs	3,877	3,274
Sales returns and exchange	3,785	2,353
Accrued interest	3,124	843
Other	13,151	5,798
Total accrued liabilities	179,592	83,869
Other noncurrent liabilities
Deferred lease liabilities	114,404	95,047
Deferred vendor incentives	32,304	35,026
Product warranty returns, less current portion	9,946	8,784
Other	4,824	3,766
Total other noncurrent liabilities	$ 161,478	$ 142,623

Earnings Per Share (Details)

Earnings Per Share (Details) - shares	3 Months Ended		6 Months Ended
	Aug. 02, 2016	Aug. 04, 2015	Aug. 02, 2016	Aug. 04, 2015
Earnings Per Share
Basic weighted average shares outstanding	37,201,842	35,188,368	37,126,890	35,167,565
Diluted weighted average shares outstanding	37,201,842	35,600,295	37,126,890	35,584,024
Stock options
Earnings Per Share
Effect of dilutive securities (in shares)		319,819		332,038
Shares excluded from calculation of diluted net income per common share as their inclusion would be anti-dilutive		49,631		49,631
Market-based stock options
Earnings Per Share
Shares excluded from diluted weighted average shares outstanding	589,160	15,388	589,160	15,388
Restricted Stock
Earnings Per Share
Effect of dilutive securities (in shares)		92,108		84,421
Market-based restricted stock
Earnings Per Share
Shares excluded from diluted weighted average shares outstanding	483,094	136,832	483,094	136,832

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions	6 Months Ended
	Aug. 02, 2016	Nov. 03, 2011
Stock-Based Compensation
Common stock reserved for future grants (in shares)		4,206,000
Number of shares available for future grants	2,080,432
Stock options
Stock-Based Compensation
Term of options	10 years
Stock Options
Outstanding at the beginning of the period (in shares)	750,000
Granted (in shares)	28,000
Exercised (in shares)	(147,000)
Forfeited (in shares)	(42,000)
Outstanding at the end of the period (in shares)	589,000
Exercisable at the end of the period (in shares)	370,000
Weighted Average Exercise Price Per Share
Outstanding at the beginning of the period (in dollars per share)	$ 26.78
Granted (in dollars per share)	44.50
Exercised (in dollars per share)	19.47
Forfeited (in dollars per share)	36.38
Outstanding at the end of the period (in dollars per share)	28.77
Exercisable at the end of the period (in dollars per share)	23.13
Weighted average fair value per option granted (in dollars per share)	$ 21.86
Aggregate intrinsic value of stock options exercised	$ 2.5
Weighted average market price of shares exercised	$ 36.69
Weighted average remaining contractual term of options outstanding	6 years 2 months 5 days
Intrinsic value of options outstanding	$ 3.7
Weighted average remaining contractual term of options exercisable	5 years 8 months 5 days
Aggregate intrinsic value of options exercisable	$ 3

Stock-Based Compensation - Opti

Stock-Based Compensation - Options - Exercise Price Range (Details) shares in Thousands	6 Months Ended
	Aug. 02, 2016$ / sharesshares
Time based stock options | $19.00 - $29.26
Outstanding and Exercisable stock options by range of exercise prices
Range of exercise prices, lower limit (in dollars per share)	$ 19
Range of exercise prices, upper limit (in dollars per share)	$ 29.26
Outstanding
Options (in shares) | shares	247
Weighted Average Remaining Contractual Life	5 years 4 months 2 days
Weighted Average Exercise price (in dollars per share)	$ 19.78
Exercisable
Options (in shares) | shares	165
Weighted Average Remaining Contractual Life	5 years 3 months 22 days
Weighted Average Exercise price (in dollars per share)	$ 19.51
Time based stock options | $34.65 - $57.05
Outstanding and Exercisable stock options by range of exercise prices
Range of exercise prices, lower limit (in dollars per share)	34.65
Range of exercise prices, upper limit (in dollars per share)	$ 57.05
Outstanding
Options (in shares) | shares	134
Weighted Average Remaining Contractual Life	7 years 9 months 18 days
Weighted Average Exercise price (in dollars per share)	$ 45.58
Exercisable
Options (in shares) | shares	45
Weighted Average Remaining Contractual Life	7 years 2 months 23 days
Weighted Average Exercise price (in dollars per share)	$ 43.80
Time based stock options | $60.74 - $60.74
Outstanding and Exercisable stock options by range of exercise prices
Range of exercise prices, lower limit (in dollars per share)	60.74
Range of exercise prices, upper limit (in dollars per share)	$ 60.74
Outstanding
Options (in shares) | shares	37
Weighted Average Remaining Contractual Life	9 years 1 month 10 days
Weighted Average Exercise price (in dollars per share)	$ 60.74
Market-based stock options | $19.00 - $29.26
Outstanding and Exercisable stock options by range of exercise prices
Range of exercise prices, lower limit (in dollars per share)	19
Range of exercise prices, upper limit (in dollars per share)	$ 29.26
Outstanding
Options (in shares) | shares	153
Weighted Average Remaining Contractual Life	5 years 4 months 13 days
Weighted Average Exercise price (in dollars per share)	$ 19.97
Exercisable
Options (in shares) | shares	147
Weighted Average Remaining Contractual Life	5 years 4 months 2 days
Weighted Average Exercise price (in dollars per share)	$ 19.55
Market-based stock options | $34.65 - $57.05
Outstanding and Exercisable stock options by range of exercise prices
Range of exercise prices, lower limit (in dollars per share)	34.65
Range of exercise prices, upper limit (in dollars per share)	$ 57.05
Outstanding
Options (in shares) | shares	18
Weighted Average Remaining Contractual Life	6 years 8 months 23 days
Weighted Average Exercise price (in dollars per share)	$ 36.84
Exercisable
Options (in shares) | shares	13
Weighted Average Remaining Contractual Life	6 years 8 months 23 days
Weighted Average Exercise price (in dollars per share)	$ 36.84

Stock-Based Compensation - Fair

Stock-Based Compensation - Fair Value Assumptions (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Aug. 02, 2016	Aug. 04, 2015	Aug. 02, 2016	Aug. 04, 2015
Stock options
Assumptions used to calculate the fair value of the stock awards on the grant date
Stock-based compensation expense recognized	$ 0.4	$ 0.6	$ 0.7	$ 1.2
Unrecognized compensation costs related to the stock options	2.9		$ 2.9
Weighted average period over which unrecognized compensation expense is expected to be recognized			2 years 1 month 2 days
Time based stock options
Assumptions used to calculate the fair value of the stock awards on the grant date
Weighted average expected life (in years)			6 years 3 months
Volatility factor (as a percent)			50.00%
Dividend yield (as a percent)			0.00%
Risk-free interest rate, minimum (as a percent)			1.23%
Risk-free interest rate, maximum (as a percent)			1.35%
Restricted Stock
Assumptions used to calculate the fair value of the stock awards on the grant date
Weighted average expected life (in years)			4 years
Volatility factor (as a percent)			45.00%
Dividend yield (as a percent)			0.00%
Stock-based compensation expense recognized	$ 1	$ 1.8	$ 3.4	$ 3.3
Weighted average period over which unrecognized compensation expense is expected to be recognized			2 years 7 months 2 days
Market-based restricted stock
Assumptions used to calculate the fair value of the stock awards on the grant date
Risk-free interest rate, minimum (as a percent)			1.05%
Risk-free interest rate, maximum (as a percent)			1.22%

Stock-Based Compensation - Rest

Stock-Based Compensation - Restricted Stock (Details) - Restricted Stock - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended		6 Months Ended
	Aug. 02, 2016	Aug. 04, 2015	Aug. 02, 2016	Aug. 04, 2015
Restricted Stock
Unvested at the beginning of the period (in shares)			496
Granted (in shares)			80
Vested (in shares)			(31)
Unvested at the end of the period (in shares)	483		483
Forfeited (in shares)			(62)
Weighted Average Grant-Date Fair Value
Unvested at the beginning of the period (in dollars per share)			$ 42.53
Granted (in dollars per share)			36.80
Vested (in dollars per share)			59.67
Forfeited (in dollars per share)			42.20
Unvested at the end of the period (in dollars per share)	$ 40.51		$ 40.51
Additional disclosure
Total grant-date fair value of restricted stock awards granted			$ 3
Total fair value of awards vested			1.3
Stock-based compensation expense recognized	$ 1	$ 1.8	$ 3.4	$ 3.3
Weighted average period over which unrecognized compensation expense is expected to be recognized			2 years 7 months 2 days
Unrecognized forfeiture adjusted compensation expense	$ 12.4		$ 12.4

Commitments and Contingencies57

Commitments and Contingencies (Details) $ in Thousands	6 Months Ended
	Aug. 02, 2016USD ($)employee
Sublease Rentals
Number of employees terminated for policy violation | employee	2
Properties operated by the company
Future minimum lease payments under operating leases
Remainder of 2016	$ 219,797
2,017	445,397
2,018	388,289
2,019	336,839
2,020	295,486
Thereafter	1,030,361
Total future minimum lease payments	2,716,169
Properties no longer operated by the company
Future minimum lease payments under operating leases
Remainder of 2016	5,212
2,017	2,599
2,018	1,810
2,019	1,285
2,020	390
Total future minimum lease payments	11,296
Sublease Rentals
Remainder of 2016	280
2,017	1,551
2,018	1,118
2,019	1,104
2,020	368
Total sublease rentals	4,421
Contractual minimum leases
Future minimum lease payments under operating leases
Remainder of 2016	1,900
2,017	3,500
2,018	2,100
2,019	$ 1,200
Minimum
Commitments and Contingencies
Initial terms of non-cancellable operating lease agreements	5 years
Period of renewal options of operating leases	1 year
Maximum
Commitments and Contingencies
Initial terms of non-cancellable operating lease agreements	10 years
Period of renewal options of operating leases	5 years

Subsequent Event (Details)

Subsequent Event (Details) - Mattress Firm - Subsequent event $ / shares in Units, $ in Millions	Aug. 16, 2016USD ($)$ / shares
Subsequent event
Acquisition-related costs	$ 1.1
Steinhoff
Subsequent event
Purchase price (in dollars per share) | $ / shares	$ 64
Potential termination fee	$ 73.2