Vertically integrated Sleep Number said first-quarter sales were essentially even with the same period last year, but profits surged thanks to a more consistent flow of components that made its operations more efficient.
The company, which had been plagued by the inability to get enough microchips for its technology-laden beds, said profits for the quarter, which ended April 1, totaled $11.47 million or 51 cents per share. That was up from $2.07 million or 9 cents per share in last year’s first quarter.
Operating income also jumped to $25.9 million from $4.42 million in the comparable quarter, and gross margin increased 1.6 percentage points to 58.9%.
First-quarter sales totaled $526.5 million, comparable with $527.1 million in last year’s first quarter.
“After nearly two years of supply disruption, the consistent flow of microchips has enabled us to return to more efficient operations,” said Shelly Ibach, chairman, president and CEO. “First-quarter performance was consistent with our expectations, reflecting our team’s strong execution in a challenged macro environment with historically low consumer sentiment pressuring demand.”
Sales at its 671 company-owned retail stores accounted for 87.1% of total sales in the most recent quarter, and comparable-store sales rose 1%.
Average sales per store totaled $3.24 million in the 12 months ending April 1, down from an average of $3.49 million in the previous 12-month period. The company said 75% of its stores registered more than $2 million in net sales, and 36% topped $3 million.
Since the first quarter ended, Ibach said the company has begun rolling out the next generation of Sleep Number smart beds and lifestyle furniture. In addition, the company recently launched a branding campaign called “Sleep Next Level” featuring basketball Hall of Famer Dwayne Wade and his wife, actress Gabrielle Union.
