Sleep Number (SNBR) Q4 2024 earnings summary

Executive summary

• Leadership transition announced: Linda Findley appointed as new President and CEO, effective April 7, 2025, succeeding Shelly Ibach, who is retiring after 18 years; Phillip M. Eyler to become independent Chair.

• The company executed a significant operating model transformation in 2024, focusing on cost reduction, margin improvement, and financial resilience amid a weak mattress industry environment.

• Fourth quarter net sales declined 12% year-over-year to $377 million; full-year net sales down 11% to $1.68 billion.

• Despite a challenging demand environment, the company delivered a 43% year-over-year increase in Q4 adjusted EBITDA and met the midpoint of full-year EBITDA guidance.

• Q4 net loss narrowed to $5 million from $25 million last year; full-year net loss was $20 million versus $15 million prior year.

Financial highlights

• Q4 net sales declined 12% year-over-year to $377 million, with a 5% reduction in store count contributing 1-2 points of pressure.

• Full-year 2024 net sales were $1.68 billion, down 11% from the prior year, with demand down high single digits.

• Q4 gross margin reached 59.9%, up 330 basis points year-over-year; full-year gross margin was 59.6%, a 190 basis point increase over 2023.

• Q4 adjusted EBITDA was $26 million, up 43% year-over-year; full-year adjusted EBITDA was $120 million, at the midpoint of guidance.

• Net cash from operating activities was $27 million for the year, up $36 million year-over-year; free cash flow was $4 million, up $70 million.

Outlook and guidance

• No financial outlook for 2025 provided due to the CEO transition; guidance will be issued later after the new CEO evaluates strategies and trends.

• Industry demand expected to remain pressured in the first half of 2025, with potential for improvement in the back half, though recent trends suggest a more conservative outlook.

• The company is prepared to continue cost reductions and operational efficiency initiatives if demand remains soft.