Sleep Number Corp. said first-quarter sales fell 10.7% to $470.4 million as the specialty bedding manufacturer and retailer continued to experience weak demand.
The Minneapolis-based company also recorded a net loss of $7.48 million, or 33 cents per share, for the quarter that ended March 31. That compares with a profit of $11.5 million, or 51 cents per share, in the first quarter of 2023.
Gross margin fell slightly to 58.7% from 58.9% in last year’s first quarter, and the company noted that operating expenses were reduced by $24 million in the most recent quarter, while free cash flow increased by $21 million.
The sales and gross margin figures were slightly ahead of expectations, the company said.
“We also generated a significant year-over-year increase in free cash flow, as planned, and continue to prioritize paying down debt and reducing leverage,” said Shelly Ibach, chair, president and CEO. “As we build a more durable operating model and as demand for our category improves from recessionary levels, we expect to capitalize on our significant opportunity as a sleep wellness technology company.”
Sleep Number said 88.2% of sales came from its company-owned retail stores, and the remaining 11.8% were online, telephone and chat orders. Comparable-store sales were down 10%, and the average sales per square foot fell to $903 from $1,060 in last year’s first quarter.
The company ended the quarter with 661 retail stores – a net reduction of 11 from the start of the year.
Read more on Sleep Number, Sleep Number’s Earnings Drop in 3rd Quarter.
