Mattress Firm Holding Corp., the bedding retailer with more than 3,500 stores, fell as much as 13 percent after providing a disappointing annual forecast and naming a new chief executive officer.
Earnings will be $2.50 to $2.60 a share this year, excluding some items, the Houston-based company said on Monday. Analysts had estimated $2.73 on average, according to data compiled by Bloomberg. Mattress Firm also elevated President Ken Murphy to the CEO role, with current chief Steve Stagner becoming executive chairman.
Mattress Firm has struggled with sluggish demand and the bedding industry’s reliance on discounting, trends that have weighed on earnings. To help bolster growth, the company agreed to buy Sleepy’s in November for about $780 million -- a deal that unites the two largest specialty mattress retailers in the U.S.
The stock fell as low as $37.11 in New York on Tuesday, the biggest intraday decline in more than six weeks. Even before the drop, Mattress Firm was down 37 percent over the past 12 months.
The CEO change will let Murphy focus on managing operations, while Stagner will handle the strategic vision, Mattress Firm said. Stagner also will oversee the Sleep’s integration.
Murphy, whose promotion to CEO was effective immediately, joined Mattress Firm in 1998 and became president last year.