Tuesday Morning shares tank on weak Q4 sales
BANGALORE, July 11 (Reuters) - Shares of Tuesday Morning Corp (TUES.O: Quotazione) slumped 25 percent to an all-time low on Friday, a day after the home accessories retailer reported weak fourth-quarter sales weighed down by deepened discounts and forecast a wider-than-expected loss for the period.
Higher gasoline and food prices, resetting mortgage rates, a credit crunch and the U.S. housing decline have hurt all retailers, especially chains that specialize in home goods like Williams-Sonoma Inc (WSM.N: Quotazione) and Bed Bath & Beyond Inc (BBBY.O: Quotazione), as demand for furniture and decor has fallen significantly.
Analyst William Baldwin of Baldwin Anthony Securities said the decline in sales cannot be blamed only on the macroeconomic environment.
"They don't have the right merchandise at the right price, so people won't go to the store anymore," he said.
Deutsche Bank downgraded the stock to "sell" from "hold" and cut its price target by 21 percent to $3.40, saying Tuesday Morning remains a weak competitor in a tough sector.
The brokerage said it does not foresee a near-term let up in housing and related consumer weakness, which should keep the home furnishings industry very promotional.
On Thursday, the company forecast a loss of between 5 cents and 8 cents a share for the quarter. Analysts had expected a loss of 4 cents a share.
Shares of the company fell to a low of $3.01 before recovering some losses to trade down 23 percent at $3.08 in afternoon trade on Nasdaq. (Reporting by Amiteshwar Singh in Bangalore; Editing by Deepak Kannan)
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