Bedding manufacturer and retailer Sleep Number said second-quarter sales tumbled 19.7% to $327.9 million and its net loss widened as the company slashed marketing spending and other costs as part of a turnaround effort led by its new CEO.
CEO Linda Findlay, who took the reins in April, said the sales decline was not a surprise and expressed confidence the company will rebound from its recent financial struggles.
“It is clear Sleep Number has a strong brand and differentiated products,” Findlay said. “We are building on these core strengths with plans to return to profitable growth by starting to implement initiatives focused on enhancing our product assortment, value proposition and consumer engagement.”
She said the company reduced operating expenses by $48 million during the second quarter to ensure it stayed in compliance with debt covenants. The reductions included “dramatically” lower spending on marketing.
“The old marketing strategy was inefficient, and we needed to implement a major reset,” she said. “We are rebuilding this program and are already seeing signs that our new, more efficient approach is working. In parallel, we are also working to optimize our product portfolio, value and distribution, with the goal of focusing on the products, price points and benefits that matter most to our customers.”
Due to the reduced operating costs, the gross margin of 59.1% was the same as last year’s second quarter.
The quarterly net loss, which included a $13 million reduction in the value of some deferred tax assets, totaled $25 million, or $1.09 per share. In last year’s second quarter, the loss totaled $5.05 million, or 22 cents per share.
For the six months leading up to June 28, sales totaled $721.2 million, down 17.9% from $878.9 million in the first half of 2024.
The six-month net loss totaled $33.7 million, or $1.48 per share. That compares with a loss of $12.5 million or 56 cents per share in the same period last year.
The company is projecting 2025 sales of approximately $1.45 billion, which would be about 14% lower than 2024.
Sleep Number ended the quarter with 630 company-owned retail stores – 10 fewer than it had at the start of 2025 and down from 672 that were open at the start of 2024.
Read Purple’s 2nd quarter sales report.
