Sleep Number Earnings Call Transcripts
Fiscal Year 2026
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Q1 2026 net sales reached $319 million, with adjusted EBITDA ahead of plan despite a 19% year-over-year decline. Liquidity improved with a $55 million infusion, and new products drove higher ARU and customer satisfaction. Gross margin was 57.9%, with cost savings and strategic review ongoing.
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A new CEO has driven major cost reductions, management changes, and product innovation, including a new entry-level bed and modernized marketing. The company is optimizing its store footprint, improving financial flexibility, and targeting growth among value-focused and wellness-oriented customers.
Fiscal Year 2025
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2025 saw a successful turnaround with cost reductions, a new product lineup, and improved margins despite lower sales. Liquidity remains a focus, with double-digit sales growth and higher EBITDA expected in the second half of 2026.
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Q3 sales fell 19.6% year over year amid aggressive competition and reduced marketing spend, but cost reductions and a new bank agreement provide flexibility for turnaround efforts. 2025 guidance includes $1.4B in sales, 60% gross margin, and negative $50M free cash flow, with 2026 focused on growth and further cost cuts.
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Q2 net sales fell 19.7% year-over-year to $328 million due to a strategic marketing reset, but gross margin held steady at 59.1%. Cost reductions exceeded targets, with $130 million in annualized savings expected for 2025. Full-year sales are forecast to decline 14% to $1.45 billion.
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Q1 net sales fell 16% year-over-year, but gross margin improved to 61.2% due to operational efficiencies. Leadership is executing $80–$100 million in annualized cost reductions, restructuring, and a renewed focus on core customer value, while navigating tariff and demand headwinds.
Fiscal Year 2024
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Leadership transition is underway as the company delivered strong margin and cost improvements despite an 11% sales decline in 2024. Adjusted EBITDA rose 43% in Q4, and operational efficiencies offset weak demand, with further cost actions and debt restructuring planned.
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Q3 saw a 10% sales decline but strong gross margin gains and cost reductions, with adjusted EBITDA up 11% year-over-year. Full-year guidance was lowered due to persistent weak demand, but the company remains focused on innovation, cost control, and maintaining covenant compliance.
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Q2 saw net sales down 11% year-over-year, but gross margin improved 150 bps and cost reductions drove better-than-expected Adjusted EBITDA. Full-year guidance is maintained despite ongoing industry demand pressures, with innovation and operational transformation supporting future growth.