MINNEAPOLIS – Vertical bedding retailer Sleep Number reported a 16% decline in its net sales for the second quarter ended July 1, compared to the same quarter last year and a 97% slide in net income for the period.
Sleep Number said sales in the quarter slid to $459 million compared to net sales of $549 million in the prior-year period. The company posted net income of $754,000 for the quarter, down significantly from $34.9 million in the same quarter last year.
“As we continue to navigate a challenging macro environment, our business is well positioned for growth,” said Shelly Ibach, chair, president and chief executive officer of Sleep Number. “Demand has steadily improved year-to-date, and we expect this trend to continue in the back-half of the year as we benefit from the launch of our entire next generation smart bed portfolio, the Climate360 smart bed, and the advancement of our ‘Sleep Next Level’ advertising campaign with the start of the NFL season. We have taken actions across the business to drive efficiencies and remain on track to expand margins and generate more than $100 million in cash from operations in 2023.”
For the first half of the year, the company said net sales dropped 8% to $985 million from net sales of $1.2 billion in the same six-month period last year. Net income for the first half was $12.2 million, a 67% decline from $37 million in the first half of last year.
Looking head to the balance of the year, the company updated its outlook to a range of $1.25 to $1.75 diluted earnings per share. That’s a change from its previous outlook last quarter of $1.25 to $2 diluted earnings per share. Sleep Number said the outlook assumes net sales are down low- to mid-single digits compared to last year and gross margin improvement of more than 150 basis points compared to 2022.
