Sleep Number Corporation reported a fourth‑quarter net loss of $59 million on sales of $347.4 million, a 7.8% decline from the $376.8 million reported in the same period a year earlier. Full‑year 2025 net sales totaled $1.411 billion, down 16.8% from $1.682 billion in 2024, while the company posted a net loss of $131.9 million versus a $20.3 million loss in 2024.
The company highlighted $185 million in annualized cost reductions, but a $14 million restructuring charge and a $9.6 million inventory obsolescence charge related to the new ComfortMode bed contributed to the Q4 loss. These one‑time items, along with a deferred tax valuation adjustment, explain the widening net loss despite the cost‑saving progress.
Revenue beat analyst estimates that ranged from $328.7 million to $351.95 million. The beat was driven by the launch of the ComfortMode bed in January 2026, which has outsold the plan by 3.5 times and delivered stronger margins. Amy O’Keefe, CFO, noted that "Net sales were $347 million in Q4 or 8% below the same period in the prior year… Gross profit margin was 55.6% in the quarter, a 430 basis point decline versus the prior year, primarily driven by a $9.6 million nonrecurring inventory obsolescence charge associated with our new product launch and the impact of unit deleverage and higher tariffs."
The company missed earnings expectations, reporting a GAAP EPS of –$2.55 versus an estimate of –$0.55. The miss was largely due to the restructuring charge, deferred tax adjustment, inventory obsolescence, unit deleverage, and higher tariffs, all of which compressed margins and increased costs.
Management reiterated its 2026 outlook, stating "Sleep Number exceeded 2025 guidance provided on our last earnings call. We are still in full turnaround mode and made significant progress against our new product and marketing strategies while continuing to reduce costs. For the full year 2025, pro‑forma adjusted EBITDA margin was approximately 9% and anticipate double‑digit adjusted EBITDA growth in 2026 as we continue to execute on our strategy." The company also highlighted ongoing liquidity concerns and its engagement with Guggenheim Securities to evaluate capital‑structure options.
Investor sentiment was mixed: some investors welcomed the revenue beat and early success of the ComfortMode bed, while the significant EPS miss and liquidity worries tempered enthusiasm, leading to a cautious overall market reaction.
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