Mattress Firm Gets Laid Out After Q2 Miss

Joel Elconin is the co-host of Benzinga's #PreMarket Prep, a daily trading idea radio show.

Mattress Firm Holding Corp MFRM shares were trading lower by $13 (23 percent) at $47.34 in Friday's session. The catalyst for the sharp decline is a Q2 miss for EPS ($0.67 vs. $0.72 estimates) and for revenues ($661.1 million vs. $663.58 million). In addition, the company said FY2016 sales growth will be in the low single-digit range and guided lower for the remainder of the year.

The decline in pre-market trading (from Thursday's close $60.34 to $52.20) spilled over into the regular session. Off the open, it briefly popped to $52.40 before another wave of sellers flooded the issue.

So far, it has declined to $46.33 and rebounded into the $47 handle. That marked the lowest level for the issue since it bottomed at $45.89 on its way to its all-time high that was made in November 2014 at $71.82.

Today's decline is taking place on much heavier than average volume: 2.9 million shares have traded compared to its 20-day average of 349,500.