Mattress Firm slashes forecast; shares slump
(Reuters) - Specialty bedding retailer Mattress Firm Holding Corp (MFRM.O) slashed its full-year adjusted profit and sales expectations citing pressured sales trends and lower traffic growth.
Mattress Firm's shares, which have risen more than 20 percent this year, fell about 23 percent to $23.25 after the bell. They closed at $30.32 on the Nasdaq on Tuesday.
"Since the (U.S. Presidential) election, there has not been an increase in traffic or even the same rate of traffic, we have seen a deceleration in traffic," Chief Executive Stephen Stagner said on a post-earnings conference call.
The company said traffic growth has slowed over the last six weeks, including Veterans Day and Black Friday.
Mattress Firm said it plans to refine its advertising and enhance staff training methods to overcome the weak macro economy.
Unit sales of premium bedding, a category that traditionally generated significant transaction volume, are also declining, the company noted.
Tempur-Pedic (TPX.N), one of Mattress Firm's key suppliers, posted its first quarterly loss and cut its full-year forecast in October as it struggles to maintain market share against fast-growing rivals.
Mattress Firm now expects full-year adjusted earnings of between $1.49 and $1.52 per share, down from its previous forecast of $1.67 to $1.73 per share.
Analysts were expecting a profit of $1.70 per share, according to Thomson Reuters I/B/E/S.
The company said it expects sales of between $1.010 billion and $1.015 billion, down from its previous range of between $1.02 and $1.03 billion. This is below analysts' estimates of $1.02 billion.
Mattress Firm, which sells brands including Tempur-Pedic International Inc, Sealy Corp ZZ.N Serta and Simmons, reported better-than-expected results for the third quarter, helped by new stores.
(Reporting by Ranjita Ganesan in Bangalore; Editing by Supriya Kurane)