Earnings Results: Sleep Number stock tanks amid slashed earnings forecast, ‘historically low’ consumer sentiment

by | Oct 26, 2022 | Stock Market

Shares of Sleep Number Corp. were getting pummeled in late trading Wednesday after the maker of “smart beds” slashed its earnings forecast as it deals with the twin challenges of “historically low” consumer sentiment and chip-related supply-chain issues. The company now anticipates $1.50 to $2.00 a share in earnings for the full year “driven by insufficient and uneven flow of chip supply and softer demand.” In its second-quarter report, Sleep Number
provided an outlook calling for $3.00 to $4.00 in full-year EPS. Analysts were expecting $3.29.

Sleep Number executives also noted that their forecast assumes that fourth-quarter net sales will be flat relative to the prior year. The FactSet consensus was for $600 million in sales for the quarter, up from $492 million a year before. The stock was down more than 20% in after-hours trading Wednesday. “We are aggressively pursuing actions to improve supply, margin, and demand,” Chief Executive Shelly Ibach said in a release. “While the consumer is understandably cautious, our brand health remains very strong, and our customer loyalty is stellar.” The outlook comes as Sleep Number’s latest quarterly results showed declines on key metrics, even as they exceeded Wall Street expectations. Third-quarter net income plunged to $5 million, or 22 …

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