Sleep Number said second-quarter sales and earnings fell by double digits as the vertically integrated mattress producer and retailer continued to experience weak demand.
Sales for the quarter ended July 1 fell 16.4% to $458.8 million, while earnings tumbled to $754,000, or three cents per share. In last year’s second quarter, earnings were $34.9 million or $1.54 per share.
Operating income also fell sharply to $11.2 million. In the same quarter last year, the figure was $49.9 million.
The company said demand improved as the second quarter progressed and noted that last year’s second quarter included delivery of more than $100 million worth of high-margin backlogged products.
“As we continue to navigate a challenging macro environment, our business is well positioned for growth,” said Shelly Ibach, chair, president and CEO. “Demand has steadily improved year-to-date, and we expect this trend to continue in the back-half of the year as we benefit from the launch of our entire next generation smart bed portfolio, the Climate360 smart bed, and the advancement of our ‘Sleep Next Level’ advertising campaign with the start of the NFL season.”
“We have taken actions across the business to drive efficiencies and remain on track to expand margins and generate more than $100 million in cash from operations in 2023,” she added.
For the first six months of 2023, sales fell 8.4% to $985.3 million. Six-month earnings totaled $12.22 million or 54 cents per share. That was down from $37 million or $1.60 per share in the first half of 2022.
The company also trimmed its earnings forecast for 2023 to a range of $1.25 to $1.75 per share. That is below an April projection of $1.25 to $2 per share.
The new forecast is based on a sales decline in the low to mid-single digits for the year and a gross margin improvement of more than 1.5 percentage points.