Investors fled Select Comfort Corporation (SCSS) shares on Thursday after the company reported weaker-than-expected results and lowered its forecast for the year. The company’s shares dropped more than 23% during morning trading.
The mattress maker and retailer posted third-quarter earnings of $20.3 million, down 23% from $26.2 million during the same period last year. EPS came in at 23 cents, far below the 43 cents that Wall Street has expected. Sales climbed to $263.7 million, up 7%, but still less than the $277.5 million that analysts had forecast, the Associated Press notes.
Select Comfort cut its earnings outlook for the year from previously issued guidance of between $1.30 and $1.45 a share, to between $1.14 and $1.22 a share. That is less than the consensus estimate of $1.33 a share among analysts.
CEO Shelly Ibach indicated that the company is looking to control costs due to an uncertain economic environment. Select Comfort’s company-owned retail stores saw sales drop 1% compared to the prior year. The company operates about 400 locations nationwide.
Select Comfort competes with Tempur Sealy International (TPX) and Mattress Firm Holding Corp. (MFRM), which fell about 4% and 5%, respectively, in Thursday morning trading.