Shares of Tempur Sealy International Inc. plunged 29% toward a three-year low in premarket trade Monday, after the mattress seller said Mattress Firm Holdings Corp. will terminate all contracts with the company in the U.S. unless significant changes weren't made to agreements. With the companies unable to reach agreement, Tempur Sealy issued termination notices for all its brands to Mattress Firm as of Jan. 27, and expects to cease doing business with Mattress Firm during the first quarter of 2017. Tempur Sealy said sales to Mattress Firm, which were approximately 21% worldwide, had declined by 11% since 2015. Tempur Sealy said it expects to report 2016 sales of $3.13 billion, above the FactSet consensus of $3.10 billion. "Ultimately, we concluded that it was in the long-term interest of all of our stakeholders to terminate our contracts with Mattress Firm," said Tempur Sealy Chief Executive Scott Thompson. "This enables us to immediately reorient our employees and resources to support retail partners that exhibit a long-term commitment to Tempur Sealy's brands." The stock had gained 4.7% over the past 12 months through Friday, while the S&P 500 had climbed 18%.
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