Sleep Number Corporation reported net sales of $393.3 million for the first quarter ended March 29, 2025, representing a 16.4% decrease year-over-year and falling short of analyst estimates. The company posted a net loss of $(8.6) million, or $(0.38) per share, which was significantly below analysts' consensus estimates.
Despite the top-line pressure, Sleep Number's gross profit rate increased to 60.2%, up 1.3 percentage points from the prior year, driven by product cost reductions and a favorable product mix. Operating expenses decreased by 14% year-over-year, including a 19% reduction in media spend, reflecting aggressive cost management efforts.
Concurrently, Sleep Number announced a series of changes to its Executive Leadership Team as part of an organizational redesign under new CEO Linda Findley. These changes, which included a 21% reduction in corporate management, are aimed at streamlining decision-making, enhancing efficiency, and increasing accountability to support the company's near- and long-term strategy.
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