By Lorie Hailey
Associate Editor
LEXINGTON, Ky. (June 7, 2012) —Shares of Lexington-based Tempur-Pedic plunged nearly 49 percent Wednesday after the mattress maker cut its profit and revenue forecasts.
On Tuesday, Tempur-Pedic said it expects U.S. sales to decline 8 percent over last year. Second quarter sales are expected to be 3 to 5 percent below last year’s second quarter net sales.
“With lower than planned sales and associated deleverage, the company currently expects second quarter 2012 diluted earnings per share to decrease approximately 50 percent from the second quarter of 2011,” the company’s press release said.
Based on the second quarter outlook and an updated full year review, the company said it expects full year net sales to be approximately $1.43 billion. Tempur-Pedic also updated its full-year earnings guidance, saying its expects diluted earnings per share to be approximately $2.70.
“Sales trends in our North America business during the second quarter have been disappointing and below plan, primarily due to changes in the competitive environment, including an unprecedented number of new competitive product introductions which have been supported by aggressive marketing and promotion,” said CEO Mark Sarvary. “As a result, we are projecting lower sales than previously anticipated for the rest of the year and are taking actions to realign our expense structure appropriately.”
Shares of Tempur-Pedic closed Tuesday at $42.70 and opened Wednesday at $26.71. By the end of the day, the price had dropped to $22.39.
At 10 a.m. today, Tempur-Pedic was trading at $21.43.
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