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Sleep Number Rises on Stronger-Than-Expected Profit, Outlook

Sleep Number shares advanced after the bed and accessories retailer posted fourth-quarter earnings and an outlook for 2021 that were better than expected.

Shares of Sleep Number  (SNBR)  spiked on Thursday after the bed retailer reported fourth-quarter earnings and a full-year outlook that beat analysts' expectations.

Shares of the Minneapolis company at last check rose 3.2% to $123.86. In Thursday trading they've touched a 52-week high $135.50, almost nine times the 52-week low of $15.27, set last April 3.

For the quarter ended Jan. 2,  Sleep Number posted earnings of $2.19 a share, more than double the 82 cents of the year-ago period.

Net sales increased 29% to $568 million from $441 million.

A survey of analysts by FactSet produced consensus estimates of GAAP earnings of $1.48 a share, or an adjusted $1.51, on revenue of $555.1 million.

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“In a year of challenge and change," Sleep Number leveraged vertical integration and digitization, President and Chief Executive Shelly Ibach said in a statement. 

"With strong momentum in the first quarter and ongoing investments in sleep-science-based innovations and digital technologies, we are well-positioned to generate sustainable profitable growth for years to come," Ibach added.

KeyBanc analyst Bradley Thomas highlighted that Sleep Number's first-quarter demand to date is above Wall Street estimates. 

"Long-term growth prospects for Sleep Number remain positive, aided by new-product introductions, improved marketing, real estate optimization, and overall industry growth," he said, as quoted by Bloomberg.

Sleep Number expects earnings for full-year 2021 to rise at least 30% to $6 a share. The FactSet survey calls for profit of $5.83 a share for the year.

The shares have 1 buy rating, 4 holds and 1 sell, with an average price target of $132, according to Bloomberg data.