Casper Sleep is missing out on sales, analysts say

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Casper Sleep Inc. is “leaving sales on the table” and underperforming competitors like Tempur Sealy International Inc. and Purple Innovation Inc. , according to Wedbush analysts. The mattress company reported second-quarter revenue that beat FactSet expectations, but missed Wedbush’s forecast. “Given 55%+ gross margins in the online channel and depressed advertising rates, the economics to capture additional sales and drive incremental profit should be compelling,” analysts led by Seth Basham wrote. “This is particularly true in a very robust demand environment and with a business model geared to the fast-growing online channel.” Casper’s revenue for the quarter totaled $110.2 million, with direct-to-consumer revenue totaling $81 million, up 5% from last year. The company also announced new retail partnerships with Walmart Inc.’s Sam’s Club warehouse retail chain and Ashley Home Store among them. “Casper is underperforming most publicly-traded mattress peers (such as Tempur Sealy and Purple) on top line growth and bottom line profitability in recent months,” Wedbush said. “[C]ontinued relative sales growth weakness in its core direct-to-consumer business (only low-single-digit growth in May and June) leaves us disappointed.” Wedbush rates Casper stock neutral with an $8, up $1. Casper announced its quarterly earnings on Tuesday, with shares closing the day down 6.2%. For the last three months, Casper stock has gained 39.3% while the S&P 500 index has rallied 17.6% for the period.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.