Sleep Number (SNBR) Investor presentation summary

Strategic transformation and turnaround plan

• Initiated a comprehensive financial and operational transformation with a clear vision for growth and shareholder value.

• New leadership team, including a new CEO in April 2025, driving a company-wide turnaround strategy called "Sleep Number Shifts."

• Streamlined operations and reduced costs by over $135M in 2025 compared to 2024, excluding restructuring and non-recurring costs.

• Amended and extended bank agreement through 2027, providing financial flexibility for the turnaround.

• Focused on repositioning the brand, expanding customer reach, and reigniting growth through product, marketing, and distribution shifts.

Product, marketing, and distribution initiatives

• Simplifying product offerings in 2026 to focus on comfort, value, and durability, leveraging extensive IP and smart technology.

• Modernizing marketing with a full-funnel strategy, brand refresh, and improved ROI through targeted messaging and creative evolution.

• Optimizing store footprint, expanding digital presence, and exploring new distribution channels and partnerships.

• Enhancing customer engagement and experience across all touchpoints to drive advocacy and loyalty.

• Leveraging data analytics and digital tools to improve store performance and customer personalization.

Financial performance and outlook

• Achieved $1.4B in net sales and $85M adjusted EBITDA (LTM as of September 2025), with a net leverage ratio of 5.0x.

• Lowered fixed cost structure and improved gross margin profile expected to drive strong free cash flow as growth returns.

• Targeting positive free cash flow in 2026 and beyond, with plans to de-lever the balance sheet and restructure debt.

• Adjusted EBITDA margin projected to improve with cost reductions and operational efficiencies.

• Free cash flow generation expected to be meaningful in 2026, supported by stabilized top line and working capital leverage.