Investors in bed-maker
might want to lie down.
The stock is set for a brutal plunge Tuesday after a preannouncement last night in which full-year earnings were guided down to 88 cents to 93 cents a share on account of limited sales of low-priced and midpriced mattresses. Analysts had been forecasting earnings of 95 cents a share. The company also said it would have to struggle to match the second-quarter Thomson First Call consensus of 15 cents share.
The company said it successfully introduced a pair of expensive models in recent months. "As a result, however, we believe we missed sales opportunities at our middle and lower price points during the quarter, a period that also saw a softening of overall consumer spending," the company said.
The stock closed Monday at $24.44, about 26 times the high end of its new 2004 guidance. The multiple contracted to around 20 in Tuesday's premarket session, where the stock was down $5.68, or 23%, to $18.76.
Select Comfort said same-store sales rose 14% in the second quarter from a year ago.