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Dec 31, 2022
Sleep Number Q4 2022 Earnings Report
Sleep Number reported a slight increase in fourth-quarter net sales but a decrease in gross profit and a net loss per share.
Key Takeaways
Sleep Number's fourth-quarter net sales increased by 1% compared to the prior year, while full-year net sales decreased by 3%. The company reported a net loss per diluted share for the quarter, compared to a net income per diluted share in the previous year. The company is introducing next-generation smart beds beginning in the second quarter.
Fourth quarter net sales increased 1% versus the prior year.
Full year net sales decreased 3% to $2.11 billion, with full year diluted earnings per share (EPS) of $1.60.
Generated $36 million of operating cash flows for the year and an Adjusted ROIC of 17.6%.
Provides 2023 earnings outlook of $1.25 to $2.00 per diluted share.
Sleep Number
Sleep Number
Forward Guidance
The company expects 2023 diluted EPS of $1.25 to $2.00. The 2023 outlook assumes net sales are flat to down mid-single digits versus the prior year. The outlook assumes gross margin rate improves by more than 150 basis points versus 2022.
Positive Outlook
- Net sales are flat to down mid-single digits versus the prior year.
- Gross margin rate improves by more than 150 basis points versus 2022.
- Generate over $100 million of operating cash flow for the year
- Generate positive free cash flows.
- Introducing next-generation smart beds beginning in the second quarter.
Challenges Ahead
- current and future economic conditions and consumer sentiment
- increases in interest rates, which have increased the cost of servicing the company’s indebtedness
- availability of attractive and cost-effective consumer credit options
- operating with minimal levels of inventory, which may leave the company vulnerable to supply shortages
- planning no share repurchases during the year.