Sleep Number Corporation announced a new financing package that adds $55 million of liquidity to its balance sheet, including a $25 million term loan that will mature on June 30 2026. The deal also grants the company relief on several financial and liquidity covenants, most notably a waiver of the $30 million minimum liquidity covenant until after July 1 2026.
The liquidity boost is intended to underpin the company’s turnaround plan, which focuses on a major product reset, a new ComfortMode bed launch, and a refreshed marketing campaign. Management said the funding will help sustain these initiatives while the firm continues to evaluate strategic business and financing opportunities that could enhance shareholder value.
Under the agreement, the term loan carries a one‑month SOFR plus 8% interest rate, reflecting the high cost of securing short‑term capital in a distressed environment. The covenant relief eases pressure on the company’s cash‑flow metrics, allowing it to avoid potential breaches of its revolver debt and other liquidity covenants during the critical next few months.
Sleep Number’s financial position has been under strain, with a $132 million net loss reported for 2025 and only $1.69 million in cash on hand as of January 3 2026. Q4 2025 net sales fell 16% year‑over‑year, driven by lower store traffic and industry demand pressure. The new financing is therefore a critical bridge while the company works to reverse these trends.
CFO Amy O’Keefe said the agreement “provides covenant relief and incremental capital to support our new product launch and marketing plans as we enter the Memorial Day selling season.” CEO Linda Findley added that the firm is “in full turnaround mode” and has made “significant progress against our new product and marketing strategies while continuing to reduce costs.”
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