Shares of Sleep Number Corp. tanked 25% in the after-hours session Tuesday after the mattress maker and retailer swung to a surprise quarterly loss, predicted a loss for the full year and said it reached an agreement with a shareholder that had been pushing for change. It was a “challenging” quarter for Sleep Number
and the bedding industry, Chief Executive Shelly Ibach said. “The consumer demand trajectory changed abruptly midway through the quarter,” Ibach said in a statement.
In a call with analysts after the results, Ibach detailed the problems. Demand “weakened significantly” and moved to the lowest on record in the quarter as consumers lost purchasing power, she said. People shifted to “scrutinizing their spending” from spending selectively, and considerations around price and value “took on heightened importance,” Ibach said. Sleep Number’s marketing, digital and sales promotional strategies failed to address the value-seeking and the changes in consumer behavior. Even though people continued to desire Sleep Number’s products, perceived affordability of its smart beds and other wares “became a real barrier,” she said. Sleep Number lost $2.32 million, or 10 cents a share, in the third quarter, versus earnings of $5 million, or 22 cents a share, in the year-ago quarter. Revenue dropped 13% to $473 million, the company said. Analysts polled by FactSet expected the company to earn 16 cents a share on sales of $509 million in the quarter. Sleep Number also kicked off a plan to reduce costs in ligh …