Sleep Number Announces Second Quarter 2025 Results

About this update from Sleep Number Corporation

Cost Savings to Exceed Initial Targets While Maintaining Compliance with Debt Covenants Company Implementing Significant Changes to Business with Enhanced Marketing, Product Initiatives MINNEAPOLIS, July 30, 2025 --( BUSINESS WIRE )--Sleep Number Corporation (Nasdaq: SNBR) today reported results for the quarter ended June 28, 2025. Linda Findley, President and CEO, commented, "Sleep Number is in a turnaround. I joined because it is fundamentally a great company and I continue to believe that. In my first 100 days, the new leadership team has been focused on digging into our product and consumer proposition. It is clear Sleep Number has a strong brand and differentiated products. 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. "At the start of the second quarter, we aggressively reduced expenses to reset our cost structure, and ensure ongoing compliance with our debt covenants. We cut marketing spend dramatically in Q2 because the old marketing strategy was inefficient, and we needed to implement a major reset. We expected the sharp drop in second quarter sales based on these changes. 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. "We are energized by the work ahead and have created the right environment, with the right team, for Sleep Number to thrive. We have proven our ability to manage costs and improve efficiency. Although our topline remains pressured, we expect our actions to drive sequential topline improvement in the coming quarters while we continue to aggressively manage our costs." Second Quarter Overview (all comparisons year-over-year unless otherwise noted) Cash Flows, Liquidity and Balance Sheet Highlights (all comparisons year-over-year unless otherwise noted) Financial Outlook The company expects the full year 2025 net sales to be approximately $1.45 billion, representing an approximately 14% year-over-year decline. This percentage change is partly driven by softer year-over-year comparisons and the 53rd week in 2025. Gross profit margin is expected to be 61%, which is consistent with the first quarter of 2025, and full year operating expenses, excluding restructuring and other non-recurring costs, are expected to be approximately $830 million. The company expects break-even free cash flow in the second half of 2025. Conference Call Information Management will host its regularly scheduled conference call to discuss the company’s results at 8:30 a.m. EDT (7:30 a.m. CDT; 5:30 a.m. PDT) today. To access the webcast, please visit the investor relations area of the Sleep Number website at https://ir.sleepnumber.com . The webcast replay will remain available for approximately 60 days. About Sleep Number Corporation Sleep Number is a sleep wellness company. We are guided by our purpose to improve the health and wellbeing of society through higher quality sleep; to date, our innovations have improved nearly 16 million lives. Our sleep wellness platform helps solve sleep problems, whether it’s providing individualized temperature control for each sleeper through our Climate360 ® smart bed or applying our 34 billion hours of longitudinal sleep data and expertise to research with global institutions. Our smart bed ecosystem drives best-in-class engagement through dynamic, adjustable, and effortless sleep with personalized sleep and health insights; our millions of Smart Sleepers are loyal brand advocates. And our 3,400 mission-driven team members passionately innovate to drive value creation through our vertically integrated business model, including our exclusive direct-to-consumer selling in 630 stores and online. To learn more about life-changing, individualized sleep, visit a Sleep Number ® store near you, our newsroom and investor relations sites, or SleepNumber.com . Forward-looking Statements Statements used in this news release relating to future plans, events, financial results or performance, such as the statements that: cost savings to exceed initial targets while maintaining compliance with debt covenants; implementing significant changes to business with enhanced marketing and product initiatives; implementing $130 million of cost savings for 2025 excluding restructuring costs that maintains compliance with debt covenants; plans to return to profitable growth by implementing initiatives focused on enhancing the company's product assortment, value proposition, and consumer engagement; rebuilding the marketing program for efficiency and optimizing its product portfolio, value and distribution; the company has proven its ability to manage costs and improve efficiency; the company expects its actions to drive sequential topline improvement in the coming quarters while it continues to aggressively manage costs; and statements about the company’s financial outlook, including the company’s expected full year 2025 net sales, gross profit margin, and operating expenses, excluding restructuring and other non-recurring costs, and free cash flow expectations in the second half of 2025 are forward-looking statements subject to certain risks and uncertainties which could cause the company’s results to differ materially. The most important risks and uncertainties are described in the company’s filings with the Securities and Exchange Commission, including in Item 1A of the company’s Annual Report on Form 10-K and other periodic reports. Forward-looking statements speak only as of the date they are made, and the company does not undertake any obligation to update any forward-looking statement.   View source version on businesswire.com: https://www.businesswire.com/news/home/20250729982295/en/ Contacts Investor Contact: [email protected] Media Contact: Muriel Lussier, [email protected]

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