Shares of Select Comfort Corp. dropped to a 52-week low Thursday, after the bedding maker said it swung to a first-quarter loss due to a pullback in consumer spending and a reduced advertising budget.
The company also said it expects a second-quarter loss as well.
Net loss totaled $7.1 million, or 16 cents per share, compared with a profit of $10.7 million, or 21 cents per share, in the year-ago period. Analysts expected a profit of 9 cents per share.
Revenue fell 22 percent to $168.2 million from $216.5 million. Analysts expected revenue of $200.4 million.
The company said results were due to reduced consumer discretionary spending. Consumers have been cutting back, particularly on big-ticket items such as mattresses, amid weak credit and housing markets and rising food and gas prices.
Furthermore, Select Comfort said it cut back on its media spending ahead of a new marketing campaign.
The company said it cut 170 jobs, including 17 percent of corporate staff, pared back on store openings and store remodels and made other cost cutting moves in an effort to save more than $30 million during the year and $45 million annually.
"The company has badly missed sales forecasts and efforts to stem severe same store sales declines have clearly not worked," said Stifel Nicolaus & Co. analyst John Baugh, who rates the company "Hold" in a note on Thursday. "The back half of the year should see the benefit from the new product introductions and cost cutting initiatives, but ultimately results will depend on volumes."
Shares fell 62 cents, or 19 percent, to close at $2.62, after hitting an annual low of $2.45 earlier in the session. The stock has traded between $3.02 and $19.03 over the past year.
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