The shares of a number of mattress makers fell Friday after Mattress Firm reported a disappointing second quarter and cut its full-year forecast.
Mattress Firm's revenue jumped 16 percent with help from recent acquisitions, but it was weighed down by higher expenses. It reported adjusted earnings of 43 cents per share on revenue of $302.5 million. Analysts polled by FactSet were anticipating a better quarter with forecasts of 51 cents per share on revenue of $322.6 million.
For the year, Mattress Firm Holding Corp. expects adjusted earnings of $1.75 to $1.83 per share on revenue in a range of $1.19 billion to $1.21 billion. Its prior outlook was for adjusted earnings between $1.90 and $1.98 per share, with revenue in a range of $1.24 billion to $1.25 billion. Analysts had predicted full-year earnings of $1.96 per share on revenue of $1.23 billion
The news sent shares of Mattress Firm down more than 16 percent by midday with its stock trading at $34.82, down $6.82.
Raymond James analyst Budd Bugatch said that it was a "triple whammy" of a sales shortfall, earnings miss and lower full-year guidance that should weigh on the company's shares.
Mattress Firm's performance also dragged down the stock of some of its peers. Mattress makers shares tend to be volatile, but Friday's outlook may have investors concerned that consumer demand for these big-ticket items has slowed.
Shares of Select Comfort Corp. fell 83 cents, or 3.2 percent, to $24.82 by midday. Tempur Sealy International Inc.'s shares fell as low as $39.76 in morning trading, but rallied later in the day to reach $42.01, up 23 cents.