Sales of Sleep Number Corp.’s new 360 Smart Bed helped the Minneapolis-based company report record fourth quarter and year-end results that exceeded analyst expectations in an increasingly competitive category for new beds.
“Consumers are embracing the sleep and wellness benefits of our revolutionary Sleep Number 360 Smart Bed,” said Sleep Number’s President and CEO Shelly Ibach in the company’s earnings release. “We look forward to having our full line of smart beds in market by midyear 2018.”
For the fourth quarter ended Dec. 31, Sleep Number reported net income of $15.8 million, or 39 cents per share, up 56 percent from the same period last year. Sales rose 16 percent to $363.3 million. The company said earnings per share (EPS) included 6 cents of tax benefits primarily due to the federal tax cuts passed in December.
Analysts expected Sleep Number to earn 19 cents per share in the quarter on revenue of $332 million.
Shares of Sleep Number closed Thursday at $36.75 per share, down 0.8 percent. However, the earnings report was released after the market closed and in after-hours trading, shares were up 2.8 percent to $37.79 per share.
For the full year, Sleep Number earned $65.1 million, or $1.55 per share, on revenue of $1.44 billion. Last year, the company earned $51.4 million, or $1.10 per share, on sales of $1.31 billion. The results topped analysts’ expectations of $1.36 per share for the year.
Versions of the company’s 360 Smart Bed have been on the market for more than six months, contributing to the increase in revenue, the company said.
Sleep Number also said it now has stores in all 50 states after opening one in Hawaii in the fourth quarter. It now has 550 company-owned stores and expects to add 100 more by 2019.
The company said it expects slower growth in the economy in 2018, so it is forecasting that earnings per share will rise 10 to 29 percent in 2018 to between $1.70 and $2, with mid to high single-digit sales growth. It expects EPS to rise to $2.75 a share by 2019.