Sleep Number Rockets Higher on Stronger-Than-Expected Earnings

Sleep Number says its earnings performance reflects stellar demand for its 360 smart beds, competitive advantages and strong business fundamentals.
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Sleep Number  (SNBR) - Get Report shares soared after the sleep products company reported stronger-than-expected earnings for the first quarter.

Net income totaled $39 million, or $1.36 a share, for the quarter, up from $25 million, or 80 cents, a year ago. Analysts polled by FactSet forecast 72 cents a share for the latest quarter.

Sleep Number’s revenue registered $473 million in the latest quarter, up 11% from $426 million a year earlier. Analysts’ forecast revenue of $433 million.

Sleep Number said it will reduce spending by $250 million for the full year compared to what it had planned before the coronavirus epidemic.

The company has “significantly reduced capital expenditures, compensation, benefits and discretionary spending, and temporarily furloughed 40% of its team members, with approximately another 30% working reduced hours,” it said in a statement.

"As a purpose driven company, Sleep Number has been intently focused on keeping our team members safe, serving our customers and ensuring our business continuity during this time of uncertainty and disruption created by the Covid-19 pandemic," CEO Shelly Ibach said in the statement.

"Our record first-quarter performance reflects the exceptional consumer demand for our life-changing 360 smart beds, our significant competitive advantages and strong business fundamentals. We are effectively managing the near-term challenges caused by the pandemic.”

The company is poised to rebound sharply “as this crisis abates and the economy recovers," she said.

Sleep Number shares recently traded at $29.11, up 26.35%. But even with that gain, the stock has plunged 43% over the last three months, compared to a 15% decline for the S&P 500.

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