Airbed manufacturer and retailer Sleep Number, with headquarters in Minneapolis, reported a record $475 million in net sales for its third quarter, a 14% increase compared with the third quarter of fiscal 2018. The number reflects a 10% gain in comparable store sales and an 81% growth in diluted earnings per share to $0.94 for the quarter.
The company surpassed analysts’ expectations (Zacks Investment Research) for both revenue and earnings in the quarter.
“Our revolutionary Sleep Number 360 smart beds are delivering life-changing sleep and drove double-digit demand growth on top of double-digit demand growth the prior year,” said Shelly Ibach, president and chief executive officer. “Our multiyear initiatives are resulting in the sales and profit growth we anticipated. We are creating a future where our 360 smart bed will be the hub for consumers’ health and wellness with individualized digital health as core to our business.”
Operating income increased 55% to $39 million, or 8.2% of net sales, compared with the prior year’s fiscal third quarter.
Earnings per diluted share increased 81% to $0.94, compared with $0.52 for the prior year.
Sleep Number raised its 2019 diluted EPS outlook to a range of $2.45 to $2.75. It includes up to 10% net sales growth for the full-year and a 25% effective income tax rate for the fourth quarter.
The company opened 15 storefronts and shuttered seven, ending its third quarter with 602 stores.
During an Oct. 15 earnings call, Ibach told analysts the company plans to refresh its 360 beds in the second half of 2020 to keep pace with advancements in data science, design and engineering in the sleep-health space.