Sleep Number Corp

Latest Results (18.10.2025):

Sleep Number Corporation reported its second quarter of 2025 with a 19.7% decline in net sales to $328 million. Despite maintaining a steady gross profit margin of 59.1%, the company faced an increased net loss of $25 million. Significant cost-cutting measures, including a 21% reduction in operating expenses, were implemented to exceed cost-saving targets and ensure compliance with debt covenants. The company remains focused on strategic business changes to drive future growth.

Net Sales Decline

Sleep Number Corp's net sales fell by 19.7% to $328 million in the second quarter of 2025 compared to the same period last year, primarily due to lower volume and a reduced store count.

Steady Gross Margin

The company maintained its gross profit margin at 59.1%, consistent with the prior year, despite a decrease in gross profit by $48 million.

Operating Expenses Reduced

Operating expenses were cut by $48 million, or 21%, before restructuring and other non-recurring costs, driven by lower marketing, selling, general and administrative, and research and development expenses.

Increased Net Loss

Net loss widened to $25 million, or $1.09 per diluted share, compared to a net loss of $5 million in the second quarter of 2024, primarily due to decreased net sales.

Adjusted EBITDA Falls

Adjusted EBITDA was reported at $24 million, marking a 17% decrease year-over-year, influenced by the decline in net sales and reduced fixed cost leverage, though the margin improved by 30 basis points to 7.2%.

Aggressive Cost Savings

The company is implementing $130 million in cost savings for 2025, surpassing the initial target of $80 million to $100 million, while maintaining compliance with debt covenants.

Financial Outlook

Sleep Number Corp anticipates full-year 2025 net sales to be approximately $1.45 billion, a 14% decline year-over-year. The company expects to achieve break-even free cash flow in the second half of 2025, supported by ongoing cost management and strategic initiatives.