Mattress Firm Cuts FY13 Outlook; Shares Down

(RTTNews) - Bedding retailer Mattress Firm Holding Corp. (MFRM), Tuesday lowered its full year financial outlook, hurt largely by severe winter and higher promotional costs amidst poor consumer environment. The company also detailed a weak guidance for the next fiscal year, sending shares of the specialty bedding retailer plunging eight percent in after-hours trade on the Nasdaq.

Houston, Texas-based Mattress Firm now expects full-year 2013 earnings of $1.53 to $1.55 per share and adjusted earnings of $1.64 to $1.66 per share. Eight analysts polled by Thomson Reuters currently estimate earnings of $1.79 per share for the year. Analysts' estimates typically exclude one-time items.

Earlier, the company had forecast earnings of $1.65 to $1.73 per share and adjusted earnings of $1.75 to $1.83 per share.

For the full year 2013, the company now sees sales of about $1.217 billion, down from its previous guidance of $1.217 billion to $1.224 billion. Analysts currently estimate revenues of $1.22 billion for the year.

Chief Executive Steve Stagner admitted that the company's full year results will be "below our expectations." Stagner blamed the consumer environment and unusually severe winter conditions as the primary reasons for the weak results.

Stagner also noted that the efforts to improve sales and traffic during the fourth quarter resulted in a decrease in operating margin of about 200 to 230 basis-points.

"We remain committed to our strategy of driving continued sales growth, increasing relative market share across the chain and positioning the Company for long-term growth of shareholder value as the largest and fastest growing mattress specialty retailer in the United States," Stagner added.

Mattress Firm reported preliminary fourth-quarter net sales of $312 million, up 20.8 percent, driven by comparable-store sales growth of 6.5 percent and the addition of new and acquired stores.

For the full-year 2014, Mattress Firm expect earnings in the range of $1.72 to $1.81 per share, adjusted earnings of $1.85 to $1.95 per share, and revenues between $1.380 billion and $1.430 billion.

Analysts currently expect earnings of $2.18 per share on revenues of $1.40 billion for 2014.

MFRM closed Tuesday's trading at $41.26, down $0.02 or 0.05%. The stock further slipped $3.26 or 7.90% in after-hours trade.