Sleep Number posts Q1 loss as sales slide11% to $470M

MINNEAPOLIS – Citing ongoing recessionary behavior in the bedding industry, vertical mattress player Sleep Number swung to a net loss of $7.5 million in the first quarter compared to net income of $11.5 million in the same quarter last year.

Net sales for the quarter ended March 30 slid 11% to $470 million, compared to net sales of $526.5 million in the prior year first quarter. The company said it reduced operating expenses by $24 million, before restructuring costs, in the quarter. Cash flow increased $21 million compared with the prior year’s first quarter.

sleep number fintabs, 4-24-2024

“Our actions to increase operating model efficiencies drove first quarter adjusted EBITDA and gross margin rate ahead of our expectations. We also generated a significant year-over-year increase in free cash flow, as planned, and continue to prioritize paying down debt and reducing leverage,” said Shelly Ibach, chair, president and chief executive officer. “As we build a more durable operating model and as demand for our category improves from recessionary levels, we expect to capitalize on our significant opportunity as a sleep wellness technology company.”

Looking ahead, the company said it expects a mid-single digit net sales decline for the year on a low-single digit demand decline.

During its conference call with analysts, the company said it expects to end the year with 30 fewer stores as it continues to implement its cost-cutting initiative started in November.

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