Mattress Firm Tumbles After Cutting Annual Profit Forecastby
Mattress Firm Holding Corp. fell as much as 19 percent after cutting its annual forecast, renewing concerns about a slowdown at the bedding provider.
The company now expects earnings of $2.25 to $2.35 a share this year, excluding some items. It had previously predicted profit of as much as $2.60. Mattress Firm also lowered its sales guidance.
The move dealt another blow to investors, who hadn’t been happy with the original forecast in March. Mattress Firm also named a new chief executive officer that month, jarring shareholders. The company is struggling with sluggish demand and an industrywide reliance on discounting. It’s also integrating Sleepy’s, a company it agreed to buy in November for about $780 million.
Mattress Firm shares plunged as low as $27.18 in New York on Friday. The stock was already down 25 percent this year through Thursday’s close.
Management decided in April to rebrand all its stores under the Mattress Firm name, a process that will last 12 to 18 months. The company is writing down its assets by $138.7 million as it phases out its other trade names.
“Despite a challenging quarter, I am proud to say that our team worked tirelessly to move the organization past these challenges,” Chairman Steve Stagner said in the statement. “We are now better positioned to execute on our long-term strategy, as we build a national chain under the Mattress Firm brand.”