Mattress Tub & Past plummeted 25% on Thursday after the corporate reported dismal first quarter earnings.
The corporate noticed income get reduce in half, and introduced it could be closing 200 shops over the following two years.
Regardless of the retailer’s weak earnings, Bank of America reiterated its “purchase” ranking on Thursday and elevated its price goal to $16.50, representing implied upside of 111% from present ranges.
In an interview with CNBC on Thursday, Mattress Tub & Past’s CEO Mark Tritton was hopeful, saying “We’re seeing some nice numbers in June and past, so we’re enthusiastic about what we have now forward for us.”
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Mattress Tub & Past plunged as a lot as 25% Thursday after the corporate reported dismal first quarter earnings that confirmed the extent of the harm COVID-19 had on its enterprise.
Listed below are the important thing numbers:
Income: $1.31 billion, down 49% year-over-yearAdjusted EPS: -$1.96, versus the -$1.32 estimateGross Margin: 26.7%, down 780 foundation factors
The retailer additionally introduced it plans to shut roughly 200 shops over the following two years because it appears to optimize its retail footprint.
One vibrant spot for Mattress Tub & Past was gross sales from its digital channel, which elevated 82% within the quarter, and represented nearly two-thirds of complete gross sales. Digital gross sales embrace its curbside decide up and buy-online-pick-up-in-store providers.
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The corporate declined to supply monetary steering for 2020 attributable to uncertainties surrounding the impression of the COVID-19 pandemic.
Whereas buyers had been unimpressed with the corporate’s earnings report, as evidenced by the buying and selling exercise on Thursday, Bank of America reiterated its purchase ranking on the agency and elevated its price goal to $16.50, representing upside potential of 106% from present ranges.
The bank stated “comp gross sales tendencies have accelerated considerably via June as shops have reopened,” and it is inspired by the retailer’s “dedication to taking out unproductive shops” and continuation of robust progress in digital gross sales.
BofA stated it believes buyers are “considerably undervaluing a turnaround” of Mattress Tub & Past’s core enterprise, and that there might be “substantial value creation” from the buybuy Child model, which is owned by Mattress Tub & Past.
In a CNBC interview on Thursday morning, Mattress Tub & Past’s CEO Mark Tritton remained optimistic on the corporate’s turnaround efforts.
“We have seen an acceleration of our potential strengths and alternatives amid the COVID-19 surroundings,” Tritton stated. He added, “We’re seeing some nice numbers in June and past, so we’re enthusiastic about what we have now forward for us.”
Shares of Mattress Tub & Past tumbled as a lot as 25% to $7.82 Thursday. The stock is down 55% year-to-date.