Sleep Number loses less money than Wall Street feared, and stock rallies

By Claudia Assis

Mattress sales to 'remain pressured,' Sleep Number says

Sleep Number Corp.'s stock rallied more than 10% in the extended session Thursday after the mattress maker and retailer posted a narrower quarterly loss and sales that were better than estimates.

"While the consumer environment remains challenging for the mattress industry, our swift actions to improve demand and reduce costs allowed us to make better progress in the fourth quarter than we expected," Chief Executive Shelly Ibach said in a statement.

Sleep Number (SNBR) lost $15 million, or 68 cents a share, in the fourth quarter, contrasting with earnings of $37 million, or $1.60 a share, in the year-ago period. Analysts polled by FactSet expected a loss of 88 cents a share.

Adjusted for one-time items, including restructuring costs recorded in the quarter, the company lost 58 cents a share.

Sales fell 14% to $430 million, with demand down by low single digits year over year, the company said. That was above FactSet consensus of sales of $421 million.

The company said it expects the demand for mattresses "to remain pressured in 2024."

It guided for adjusted Ebitda of between $125 million and $145 million for the year, with net sales down mid-single digits.

The company said its restructuring efforts were "progressing as planned," with operating expenses cut by $85 million last year. It plans on additional reductions of $40 million to $45 million in operating expenses for this year.

It ended 2023 with about 4,100 employees, or 7% fewer than in 2019.

Shares of Sleep Number have declined 68% in the past 12 months, contrasting with gains of around 27% for the S&P 500 index SPX.

-Claudia Assis

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02-22-24 2007ET

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