MINNEAPOLIS – Vertical sleep brand Sleep Number Corp. reported a net loss in the third quarter ended Sept. 28 of $3.1 billion, a 35% dip from the company’s net loss of $2.3 billion in the same period last year.
On a per-share basis, the company said it had a loss of 14 cents.
Net sales in the third quarter were $426.6 million, a 10% drop from $473 million in the same quarter last year when the company announced its restructuring plan.
In addition to its earnings results, the company announced the retirement of Shelly Ibach, chair, president and CEO.
The company said its gross margin of 60.8% was up 340 basis points compared to the prior year, driven by year-over-year product cost reductions through value engineering and ongoing supplier negotiations, favorable product mix, and efficiency gains in our home delivery and logistics operations.
Adjusted EBITDA climbed 11% compared with the same period last year to $28 million.
“Our actions throughout the business over the past year are driving sustainable operating model improvements and contributing to our increased financial flexibility and durability,” Ibach said. “Our initiatives drove broad cost efficiencies and a gross margin rate improvement to 60.8%, resulting in third quarter adjusted EBITDA of $28 million, which was in-line with expectations even with persistent consumer demand weakness.”
Looking ahead, the company updated its full-year 2024 EBITDA outlook to a revised range of $115 million to $125 million. Sleep Number said it expects 2024 full-year net sales to be down about 10% consistent with year-to-date net sales performance. The company’s outlook includes at least 150 basis points of gross margin rate improvement for the year. The company expects to generate $10 million to $20 million of free cash flow for the year with capital expenditures of approximately $25 million.
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