The Minneapolis company reported second-quarter earnings of 88 cents a share, swinging from a year-earlier loss of 45 cents a share. Revenue advanced 70% to $484.3 million from $284.9 million.
Analysts surveyed by FactSet were expecting Sleep Number to report earnings of $1.10 a share on revenue of $511 million.
"We have made substantial progress in addressing temporary component shortages and expect strong delivery volumes the balance of the year," Chief Executive Shelly Ibach said in a statement.
For the year, Sleep Number raised its earnings outlook to $7.25 a share, from its prior outlook of at least $6.50. Analysts polled by FactSet were expecting $7.28 a share.
Shares of Sleep Number at last check fell 13% to $97.12. The stock on Wednesday has traded off as much as 17% at $93.35.
"Robust consumer demand for Sleep Number 360 smart beds exceeded our expectations, while near-term supply constraints limited delivered net sales in June and July," Ibach said.
"Sleep Number teams are driving higher than expected operational efficiencies," the executive said.