Sleep Number Corporation (SNBR) Earnings
Sleep Number Corporation is expected to report next earnings on July 29, 2026 (in NaN days), with a consensus EPS estimate of $-0.32. SNBR has beaten EPS estimates in 6 of its last 12 reported quarters (average surprise -402.4% over the last four).
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| May 12, 2026 | $-0.39 | $-2.19 | -458.6% | $319M | -0.5% |
| Mar 12, 2026 | $-0.50 | $-1.95 | -289.5% | $347M | -2.6% |
| Nov 5, 2025 | $0.15 | $0.07 | -53.3% | $343M | +4.3% |
| Jul 30, 2025 | $-0.12 | $-1.09 | -808.3% | $328M | -9.9% |
| Apr 30, 2025 | $-0.11 | $-0.38 | -245.5% | $393M | -1.2% |
| Mar 5, 2025 | $-0.22 | $-0.18 | +18.2% | $377M | -18.3% |
| Oct 30, 2024 | $-0.17 | $-0.14 | +17.6% | $427M | +9.5% |
| Jul 31, 2024 | $-0.37 | $-0.22 | +40.5% | $408M | -9.2% |
| Apr 24, 2024 | $-0.41 | $0.03 | +107.3% | $470M | -0.8% |
| Feb 22, 2024 | $-0.90 | $-0.58 | +35.6% | $430M | +2.1% |
| Jul 27, 2023 | $0.01 | $0.03 | +314.4% | $459M | -2.7% |
| Feb 22, 2023 | $-0.22 | $-0.24 | -9.1% | $498M | +0.4% |
Source: company filings + earnings calendar. For informational purposes only — not investment advice.
Earnings call summary
Q1 FY2026 · May 12, 2026
AI summary of management’s prepared remarks and analyst Q&A. For informational purposes only — not investment advice.
Management highlights
### Capital Structure Update - On April 27, 2026, Sleep Number reached an agreement with existing lenders that provides $55 million in incremental near-term liquidity, including a new $25 million senior secured term loan due June 30, 2026. The agreement also provides relief from the $30 million minimum liquidity covenant through June 30, 2026, and lender forbearance for existing covenant defaults as of April 4, 2026. - This near-term relief allows the company to continue executing its turnaround plan and gives management time to evaluate and implement a long-term solution for its capital structure, including a full range of strategic and financing options. ### Product Launch Highlights - The company completed a full product reset across all retail stores in less than 4 weeks, with seamless manufacturing and delivery transitions to the new product lineup. Stores with the new full lineup saw 12% higher average revenue per unit (ARU) than stores still stocked with legacy products. - ComfortMode, the first new bed launched in January 2026, has delivered a 15 point overall improvement in Net Promoter Score (NPS), and a 27 point NPS improvement compared to the prior C-series entry-level line. In-home testing found 90% of users slept better, 80% got more sleep, and 80% experienced less pain using the new Sleep Number beds. - The full new product portfolio has a better average margin profile than the prior lineup, and management expects gross margins to return to at or above historical levels once one-time launch and legacy inventory clearance costs are resolved. ### Marketing and Distribution Updates - Improvements to the company website and AI-powered discoverability have driven 5% year-over-year e-commerce demand growth in April 2026, and a 25% year-to-date improvement in AI citations for Sleep Number products. - A new integrated brand campaign launched to support the product reset, with early performance trending above category benchmarks. The company also launched its first Travis Kelce branded content, which garnered over 7 million views and high social engagement, alongside expanded influencer marketing. - Sleep Number launched a test of exclusive online sales through Costco.com, with early indications of strong performance from both direct sales and increased in-store visibility for the brand. ### Cost Discipline - Since the start of 2025, the company has identified over $235 million in annualized cost savings, with $200 million of that already implemented. For the 2026 targeted $50 million annualized savings plan, 30% has been implemented year-to-date.
Guidance
- Management expects Q2 2026 net sales to range from a low single-digit year-over-year decrease to flat, consistent with prior performance guidance provided on the last earnings call. After adjusting for a 9% reduction in store count, this outlook implies a potential return to mid-to-high single-digit same-store sales growth later in Q2 during the Memorial Day selling season, matching the 6% year-over-year demand growth seen in March 2026. - Q2 2026 media investment is expected to be roughly flat compared to Q1 2026, and up significantly compared to Q2 2025, which was a trough for marketing investment. Most media spend is back-weighted to the weeks leading up to Memorial Day. - Gross margins are expected to sequentially improve throughout 2026 as legacy inventory is cleared and the product mix balances to the new higher-margin lineup, reaching at or above historical historical margin levels. - The majority of one-time product launch costs (including inventory obsolescence) are now behind the company, with only minor remaining launch costs expected in Q2 2026. - Because management is actively evaluating strategic and financing options with advisers, the company is not providing full-year 2026 financial guidance at this time, though overall performance expectations remain consistent with prior indications.
Segment performance
Sleep Number does not break out performance across multiple distinct product segments in this call. All performance is reported at the company level: Q1 2026 net sales totaled $319 million, a 19% year-over-year decrease. Gross profit margin was 57.9%, 329 basis points below the prior year, driven by discounting of legacy inventory and mix shift to the newly launched ComfortMode entry-level bed. Adjusted operating expenses (before restructuring/non-recurring costs) were $195 million, an 18% year-over-year decrease. Adjusted EBITDA was $5.8 million, a $16 million year-over-year decrease. Free cash flow was a use of $13.2 million, and capital expenditures totaled $5.4 million. For the new product portfolio, the premium ComfortNext Lux bed is currently the top-selling SKU, with an average price of approximately $4,000 for a queen size, and delivers higher margins than the products it replaces. The new ComfortMode entry-level bed has a 100 basis point lower return rate than the product it replaced.
Risks & headwinds
- The company faces ongoing consumer uncertainty and macroeconomic volatility, which has driven soft demand in the first two months of Q1 2026 and pressured overall top-line results. - Near-term liquidity remains tight, as the company is investing heavily in product launch, marketing, and sponsorships heading into the key Memorial Day selling season. The $25 million new term loan matures on June 30, 2026, requiring a long-term capital structure solution to be completed by that date. - Input cost and inflationary pressures, including tariff impacts, present a potential headwind to margins, though this pressure is already incorporated into the current operating plan. - The company remains in technical default of prior financial covenants, with lender forbearance only in place through June 30, 2026, creating pressure to complete a long-term capital restructuring on a tight timeline.
Analyst Q&A
Q: With a lot riding on Q2 performance after the full product rollout, how is the plan for media and new products coming together to drive sustained demand growth over time? /
A: The media spend plan has not changed from prior disclosures. Q2 media spending is back-weighted to the weeks leading up to the Memorial Day holiday, with the bulk of investment coming after the full product lineup was rolled out to all stores. The current outlook for low single-digit to flat net sales matches what the company previously guided.