Sign up UNITED KINGDOM
Proactive Investors - Run By Investors For Investors

Eve Sleep shares plummet as CEO departs following "strategic missteps"

The mattress maker said that despite trading outperforming the broader market, sales had fallen short of expectations
Eve mattress
Eve added that UK profitability would be delayed from the fourth quarter of 2018

Eve Sleep Plc (LON:EVE) saw its shares plummet in early trading Monday as it got rid of its chief executive officer following a series of "strategic missteps" by its management which saw sales fall below expectations.

The AIM-listed mattress maker said that despite trading outperforming the broader market, sales had fallen short of expectations with trading patterns experiencing greater volatility than originally expected.

READ: eve Sleep reports strong revenue, margin growth on quicker than expected retail roll-out, European expansion

The firm added that its management had made some “strategic missteps” by underestimating what was required to develop a meaningful footprint across continental Europe and losing focus on creating an “aspirational sleep brand” in its core markets.

As a result, eve said its chief executive officer, Jas Bagniewski, would step down with immediate effect, with chief financial officer Abid Ismail assuming responsibilities in the interim.

The group also said that due to volatile trading patterns and upcoming growth initiatives, the revenue shortfall in the first half was not expected to be recovered in the second half as non-core markets continued to drag on growth.

Eve said with this in mind UK profitability would be delayed from the fourth quarter of 2018, although the impact on earnings would be partially offset by cost savings.

In the same announcement, the group also said it had entered into a new partnership with Dreams, a UK bed retailer, which would see its eve mattress sold through Dreams’ stores and website.

Paul Pindar, chairman of eve Sleep, said: "We have fallen short of our own and the market's high expectations and as a result have taken the tough decision to make management change. Jas has, as one of the founders, been a driving force for this business and has much to be proud of…In tandem with the search for a new CEO we will with immediate effect be refocusing all of our efforts on strengthening the eve brand in our core markets.

He added: “While we do not anticipate a near term improvement in the external environment, we have a healthy net cash position, our trading continues to far outstrip that of the market and should be underpinned by Company growth initiatives including the Dreams partnership that we expect to benefit the traditionally stronger second half”.

Eve Sleep shares were down 64.4% at 24.5p.

--Updates share price--

View full EVE profile View Profile

Eve Sleep Plc Timeline

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use