Sleep Number sales drop 20% as it loses competitive ground

Sleep Number recorded another quarterly loss on Wednesday, as sales slid 20% in the latest quarter.

The Minneapolis-based company’s sales tumble comes as the overall mattress industry had its best quarter in more than three years, producing single-digit percentage gains in the second quarter, said Peter Keith, a senior research analyst with Piper Sandler who does a monthly retail survey of the mattress industry.

Sleep Number named Linda Findley as its new chief executive on April 7, and she began making changes immediately.

The company is now in the middle of a restructuring, trying to squeeze $130 million worth of savings in 2025.

“Sleep Number is in a turnaround,” she said in a news release. “I joined because it is fundamentally a great company, and I continue to believe that.”

Findley continues to face challenges as the spring months produced the company’s 10th straight quarterly sales decline.

As a result, Sleep Number lost $25 million, or $1.09 a share. In the same period a year ago, the loss was $5.1 million. Sales were down to $328 million.

Findley told analysts on the earnings call that the company is working on the product portfolio to include more price points for consumers. Sleep Number also is looking at its capital structure and has begun negotiating for more flexibility with lenders.

The most immediate change has been in the marketing and advertising budget. The company cut its second quarter budget by 30%, a move that directly affected sales.

“We expected the sharp drop in second quarter sales based on these changes,” Findley said in the release. “We are rebuilding this program and are already seeing signs that our new, more efficient approach is working.”

Findley made personnel changes at the company within weeks of being named CEO, reducing management positions by 21%. Last week, Sleep Number’s chief financial officer, Francis Lee, stepped down.