Tempur Sealy International Inc. shares fell after the mattress company lowered its 2016 guidance, saying sales in the current quarter have been weaker than expected.
The Lexington, Ky., company’s shares dropped 24% to $56.29 in recent after-hours trading.
Tempur Sealy reduced its 2016 outlook for adjusted earnings before interest, taxes, depreciation and amortization by $25 million and now expected adjusted Ebidta of $500 million to $525 million. The company also projected a decline in net sales of between 1% and 3% for the year, compared with its previous estimate for net sales to increase in the low single digits.
Chairman and Chief Executive Scott Thompson, who have been aiming to lower costs and boost margins at the company, said in prepared remarks Tuesday that “while our net sales are below expectations, our operational initiatives are going well and are continuing to drive considerable margin expansion.”
Mr. Thompson has been CEO for roughly a year and was brought in by activist investor H Partners Management LLC, which — among other things — had criticized Tempur Sealy for falling profit margins.
Tempur Sealy released its updated guidance ahead of a financial conference Tuesday in Phoenix.
The company plans to release its third-quarter results on Oct. 27.