Sleep Number Has Profitable 1st Quarter

In the first quarter of fiscal 2019, Sleep Number Corp. reported net income of $25 million — a 24% increase compared with first-quarter 2018 — and revenue of $426 million (up 10%). The airbed manufacturer and retailer’s earnings per diluted share were $0.80, 54% higher than in the prior-year quarter.

Earnings beat stock analysts’ estimates, but the Minneapolis-based company’s sales missed Wall Street expectations of $428 million, and the company’s stock took a tumble in the weeks that followed.

Sleep Number invested $20 million in capital expenditures, including the opening of 15 new stores (and nine shuttered), for a total of 585 stores at the close of the quarter.

In prepared remarks for an April 17 conference call, Shelly Ibach, president and chief executive officer, said 26% of Sleep Number comparable store sales were in excess of $3 million. “(Also,) referral and repeat sales represent more than 40% of our business today, and we expect this strategic strength to grow in importance,” she added.

Sleep Number reiterated its 2019 outlook for profits in the range of $2.25 to $2.75 per share, 6% to 10% net sales growth and an effective income tax rate of 25%.

“We’re reiterating our guidance, and we delivered the quarter that we needed to and expected to,” Ibach said during the conference call. “And we’re on pace, we’re excited with our initiatives, we’re leaning into them. So, those are all good indicators of how we feel about the overall marketplace and our opportunities in it.”

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