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Sleep Number (SNBR)
NASDAQ:SNBR
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Sleep Number (SNBR) AI Stock Analysis

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SNBR

Sleep Number

(NASDAQ:SNBR)

Rating:44Neutral
Price Target:
$7.50
▼(-10.71%Downside)
The overall stock score reflects Sleep Number's significant financial challenges, which are the most critical factor. Technical analysis and valuation issues further impact the score, although strategic efforts to improve margins and reduce costs offer some hope for stabilization. Corporate events provide a mixed picture, with leadership changes seen positively but governance concerns persist.

Sleep Number (SNBR) vs. SPDR S&P 500 ETF (SPY)

Sleep Number Business Overview & Revenue Model

Company DescriptionSleep Number Corporation, headquartered in Minneapolis, Minnesota, is a leading innovator in the sleep industry. The company designs, manufactures, and markets a line of adjustable-firmness mattresses, bedding accessories, and sleep health technologies. Sleep Number is best known for its Sleep Number 360® smart beds which offer personalized comfort with adjustable firmness, comfort layers, and sleep tracking capabilities. The company operates in the retail sector, selling directly to consumers through its own retail stores, online platform, and select third-party retailers.
How the Company Makes MoneySleep Number Corporation generates revenue primarily through the sale of its Sleep Number 360® smart beds and related bedding products. The company’s revenue model is based on direct-to-consumer sales, leveraging its network of over 600 retail stores across the United States and its online e-commerce platform. Key revenue streams include the sale of mattresses, smart beds, adjustable bases, and bedding accessories. Sleep Number also offers sleep health solutions and related technology services that contribute to its earnings. The company benefits from proprietary technology and a strong brand presence, enabling it to maintain a loyal customer base and command premium pricing. Partnerships with health and wellness organizations further enhance its product offerings and market reach. Additionally, Sleep Number invests in marketing and customer service initiatives to drive brand awareness and customer satisfaction, thereby supporting its revenue growth.

Sleep Number Earnings Call Summary

Earnings Call Date:Apr 30, 2025
(Q1-2025)
|
% Change Since: 7.83%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant challenges, including a notable decline in net sales and adjusted EBITDA. However, there were positive developments in gross profit margin expansion and cost reduction plans. The overall sentiment reflects a company facing significant headwinds but making strategic efforts to stabilize and improve efficiency.
Q1-2025 Updates
Positive Updates
Gross Profit Margin Expansion
Gross profit margin expanded to 61.2% in the first quarter, up 250 basis points versus last year, driven by operational efficiencies and product mix improvements.
Positive Consumer Response to Climate Series Beds
The Climate Series beds helped expand the Average Revenue per Unit (ARU) by approximately 4% compared to last year.
Operating Cost Improvements
First quarter operating expenses, excluding restructuring and onetime costs, were $237 million, a $23 million or 9% improvement over last year.
Planned Annualized Cost Reductions
The company plans $80 million to $100 million in annualized cost reductions, focusing on organizational efficiency and marketing.
Negative Updates
Decline in Net Sales
Net sales for the first quarter were $393 million, a decrease of 16% compared to the prior year.
Decrease in Adjusted EBITDA
Adjusted EBITDA for the quarter was $22 million, a decrease of $15 million from the prior year, with an adjusted EBITDA margin of 5.6%, 230 basis points lower than the previous year.
Tariff Impact Concerns
Potential unmitigated tariff impact estimated at $30 million for 2025, with $17 million expected to be offset through partnerships and supply chain flexibility.
Challenges in Consumer Confidence
Consumer confidence has been declining since February, impacting willingness to spend and contributing to top-line pressure.
Company Guidance
In the Q1 2025 earnings call, Sleep Number provided several key financial and strategic metrics. Net sales for the quarter were reported at $393 million, marking a 16% decline compared to the previous year. However, the company achieved a gross profit margin of 61.2%, an increase of 250 basis points from last year, aided by operational efficiencies and a favorable product mix. Operating expenses totaled $237 million, showing a $23 million or 9% improvement year-over-year, excluding restructuring and onetime costs. Adjusted EBITDA was $22 million, reflecting a decrease of $15 million from the prior year, with an adjusted EBITDA margin of 5.6%, down 230 basis points. The company is strategically managing its debt, maintaining a leverage ratio of 4.46x EBITDAR, within the covenant maximum of 4.75x. Sleep Number has also outlined cost reduction goals, estimating an annualized reduction of $80 million to $100 million, aiming to stabilize and position for future growth despite the challenging consumer environment. The company is also navigating tariff impacts, with an unmitigated effect estimated at $30 million for 2025, while aiming to offset $17 million through supplier partnerships and supply chain flexibility.

Sleep Number Financial Statement Overview

Summary
Sleep Number faces significant financial challenges, with declining revenues and negative net income. The balance sheet shows financial instability with negative stockholders' equity and high leverage. Cash flow analysis reveals liquidity issues with negative operating and free cash flows. Overall, the company's financial position is precarious and requires strategic initiatives to address profitability and liquidity challenges.
Income Statement
45
Neutral
The income statement shows declining revenues with a negative net income for the TTM period, indicating profitability challenges. Gross profit margin remains relatively stable at 60.4% for TTM, but the net profit margin is negative due to the net loss. The revenue growth rate is negative, reflecting a decrease compared to previous periods, suggesting possible market or operational issues.
Balance Sheet
30
Negative
The balance sheet highlights financial instability with negative stockholders' equity, indicating more liabilities than assets. The debt-to-equity ratio is negative due to negative equity, pointing to high leverage. This poses a risk to financial stability and solvency, although the equity ratio is not applicable due to negative equity.
Cash Flow
35
Negative
Cash flow analysis reveals negative operating and free cash flows for the TTM, indicating liquidity issues. The operating cash flow to net income ratio is negative, which is concerning for cash generation from operations. The free cash flow growth rate is also negative, emphasizing declining cash reserves and potential liquidity constraints.
BreakdownDec 2024Dec 2023Dec 2022Mar 2022Mar 2021
Income Statement
Total Revenue1.68B1.89B2.11B2.18B1.86B
Gross Profit1.00B1.09B1.20B1.32B1.16B
EBITDA88.07M95.34M135.28M253.93M246.46M
Net Income-20.33M-15.29M36.61M153.75M139.19M
Balance Sheet
Total Assets860.81M950.88M953.94M919.54M800.14M
Cash, Cash Equivalents and Short-Term Investments1.95M2.54M1.79M2.39M4.24M
Total Debt936.11M972.65M896.01M791.05M589.36M
Total Liabilities1.31B1.39B1.39B1.34B1.02B
Stockholders Equity-451.59M-441.93M-438.18M-424.95M-223.98M
Cash Flow
Free Cash Flow3.64M-66.08M-33.32M233.11M240.59M
Operating Cash Flow27.14M-9.03M36.14M300.01M279.66M
Investing Cash Flow-26.29M-58.35M-70.61M-66.64M-39.02M
Financing Cash Flow-1.44M68.13M33.87M-235.22M-237.99M

Sleep Number Technical Analysis

Technical Analysis Sentiment
Positive
Last Price8.40
Price Trends
50DMA
8.35
Positive
100DMA
7.69
Positive
200DMA
11.78
Negative
Market Momentum
MACD
-0.04
Negative
RSI
62.89
Neutral
STOCH
64.25
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SNBR, the sentiment is Positive. The current price of 8.4 is above the 20-day moving average (MA) of 7.39, above the 50-day MA of 8.35, and below the 200-day MA of 11.78, indicating a neutral trend. The MACD of -0.04 indicates Negative momentum. The RSI at 62.89 is Neutral, neither overbought nor oversold. The STOCH value of 64.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SNBR.

Sleep Number Risk Analysis

Sleep Number disclosed 1 risk factors in its most recent earnings report. Sleep Number reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Sleep Number Peers Comparison

Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
71
Outperform
$763.66M13.3112.09%6.53%-6.32%-18.35%
70
Outperform
$1.61B16.669.84%2.71%3.04%-16.49%
67
Neutral
¥267.20B13.406.45%2.59%5.22%-11.90%
66
Neutral
$288.51M28.246.73%-0.77%-8.89%
55
Neutral
$1.36B45.68-2.77%4.69%1.14%-149.26%
52
Neutral
$93.43M-199.78%-10.41%53.85%
44
Neutral
$203.26M9.10%-12.36%37.69%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SNBR
Sleep Number
8.40
-2.33
-21.71%
ETD
Ethan Allen
29.60
0.79
2.74%
MLKN
MillerKnoll
19.76
-9.10
-31.53%
LZB
La-Z-Boy Incorporated
39.16
-3.52
-8.25%
PRPL
Purple Innovation
0.86
-0.57
-39.86%
LOVE
The Lovesac Company
19.53
-8.19
-29.55%

Sleep Number Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Sleep Number Appoints Bob Ryder as Interim CFO
Positive
Jul 22, 2025

On July 18, 2025, Sleep Number Corporation appointed Bob Ryder as interim CFO, succeeding Francis Lee, effective July 21, 2025. Lee will remain as an advisor until August 15, 2025, to facilitate a smooth transition. Ryder, with over 30 years of finance leadership experience, will focus on the company’s debt structure and work towards long-term success. The leadership change is not due to any financial or operational issues, and the company is on track to exceed its cost reduction goals, positioning itself for future growth with new products and strategies.

The most recent analyst rating on (SNBR) stock is a Hold with a $16.00 price target. To see the full list of analyst forecasts on Sleep Number stock, see the SNBR Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Sleep Number Schedules Q2 2025 Earnings Call
Neutral
Jul 22, 2025

On July 22, 2025, Sleep Number Corporation announced its second quarter 2025 earnings conference call scheduled for July 30, 2025. The company will release its fiscal results for the quarter ending June 28, 2025, before the market opens on that day, and will host a conference call to discuss these results. This marks a shift in their communication strategy as they will now rely solely on press releases for announcing future earnings calls.

The most recent analyst rating on (SNBR) stock is a Hold with a $16.00 price target. To see the full list of analyst forecasts on Sleep Number stock, see the SNBR Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Sleep Number Shareholders Reject Key Board Amendments
Negative
May 29, 2025

At Sleep Number‘s 2025 Annual Meeting, shareholders voted on several proposals, including the election of directors and amendments to the company’s articles and bylaws. While the election of directors and some proposals, such as the ratification of Deloitte & Touche LLP as the independent registered public accounting firm, were approved, key amendments to declassify the board and eliminate supermajority voting requirements did not pass. The board expressed disappointment at the failure to secure the necessary two-thirds majority for these amendments and plans to resubmit them at the 2026 Annual Meeting, aiming to declassify the board by 2027 contingent on shareholder approval.

The most recent analyst rating on (SNBR) stock is a Hold with a $16.00 price target. To see the full list of analyst forecasts on Sleep Number stock, see the SNBR Stock Forecast page.

Executive/Board Changes
Sleep Number Announces Executive Resignation and Transition
Neutral
May 28, 2025

On May 23, 2025, Sleep Number Corporation announced that Joel Laing, Vice President, Treasurer, and Chief Accounting Officer, will resign effective June 5, 2025. His departure is amicable and not due to any disagreements with the company. Francis Lee, the Chief Financial Officer, will assume the role of principal accounting officer starting June 6, 2025.

The most recent analyst rating on (SNBR) stock is a Hold with a $16.00 price target. To see the full list of analyst forecasts on Sleep Number stock, see the SNBR Stock Forecast page.

Executive/Board ChangesBusiness Operations and Strategy
Sleep Number Restructures Leadership, Eliminates Key Role
Neutral
Apr 30, 2025

On April 25, 2025, Sleep Number Corporation eliminated the role of Executive Vice President and Chief Innovation Officer, previously held by Annie Bloomquist, as part of a broader organizational redesign. Bloomquist will serve in an advisory role until May 31, 2025, to aid in the transition. The company announced changes to its Executive Leadership Team to enhance efficiency and accountability, with new roles and responsibilities aimed at strengthening company performance and improving customer engagement. These changes are intended to streamline decision-making and better position the company to respond to industry and macroeconomic shifts.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 23, 2025