Sleep Number Corp. said fourth-quarter sales fell 12.3% to $376.8 million, but the specialty bedding manufacturer and retailer improved its gross margin and substantially reduced its net loss from the fourth quarter of 2023.
The company said gross margin was 59.9% for the three months ended Dec. 28, up from 56.6% in the comparable period. The improvement was driven by product cost reductions, a favorable product mix and improved efficiencies in its logistics and home delivery operations.
The most recent quarter’s net loss totaled $4.67 million, or 21 cents per share. That compares with a loss of $25.2 million or $1.12 per share in the final quarter of 2023.
“In the face of significant ongoing weakness in the U.S. bedding industry, we have transformed Sleep Number’s operating model over the past 18 months for greater financial resilience,” said Shelly Ibach, chair, president and CEO. “In 2024, we delivered gross margin rate improvement and operating cost reductions that were nearly double our original targets for the year, while generating positive free cash flow.”
For the year ended Dec. 28, sales fell 10.9% to $1.68 billion. Gross margin totaled 59.6%, up from 57.7% the previous year.
The 2024 net loss totaled $20.3 million, or 90 cents per share. That was up from a loss of $15.3 million, or 68 cents per share, the previous year.
“While the marketplace remains extremely challenging, our dedicated team is intently focused on driving improved demand and further advancing our operating model transformation, which position Sleep Number to deliver pro table long-term growth when the market recovers,” Ibach said.
Sleep Number finished 2024 with 640 company-owned retail stores, down from 672 at the end of 2023. The average sales per square foot fell to $841 last year from $926 in 2023.
Separately, the company announced that Linda Findley has been named president and CEO, effective April 7. Ibach is retiring but will remain as board chair until the company’s 2025 annual meeting.
