Shares of Invacare (IVC -9.49%) were plunging 33.6% lower as of 11:17 a.m. EDT on Thursday. The steep decline came after the medical equipment manufacturer lowered its full-year 2021 guidance.
Only a little over one month ago, Invacare reported positive second-quarter results. The company at the time reaffirmed its full-year 2021 guidance of constant-currency net sales growth of between 4% and 7% and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $45 million.
Now, though, Invacare isn't nearly as optimistic. The company's revised full-year guidance projects net sales growth of 0% to 4% with adjusted EBITDA between $6 million and $9 million.
What changed? Invacare CEO Matt Monaghan cited "challenges related to labor, material and freight, which are affecting both our business and a wide variety of industries." He said that the company had expected an improvement on these fronts when it reconfirmed full-year guidance in the Q2 update. That improvement hasn't materialized.
Invacare plans to pass on its higher costs to customers through price increases. However, the impact from these price hikes won't be felt until the fourth quarter. The company expects that the fourth quarter will be better than the third, but with more gradual improvement than initially projected.