Sleep Number Corporation reported a significant decline in financial performance for the first quarter of fiscal 2025, with net sales totaling $393.3 million, a decrease of 16% from $470.4 million in the same period last year. The drop in revenue was attributed to lower sales volume and a reduced store count, with a 15% decline in total retail comparable sales. The company also experienced a net loss of $8.6 million, or $0.38 per diluted share, compared to a loss of $7.5 million, or $0.33 per diluted share, in the prior year.
The company's gross profit for the quarter was $240.5 million, down from $276.2 million a year earlier, although the gross profit margin improved to 61.2%, up from 58.7%. This increase was primarily driven by product cost reductions and a favorable product mix. Operating expenses decreased by $32 million year-over-year, largely due to lower sales and marketing expenses and a significant reduction in restructuring costs, which fell to $60,000 from $10.6 million in the previous year.
In terms of operational metrics, Sleep Number's average sales per store decreased to $2.5 million from $2.8 million, reflecting the challenges faced in the retail environment. The company operated 637 stores at the end of the quarter, down from 640 at the beginning of the period, with five store closures. The total retail smart bed unit sales decreased by 19%, although the average revenue per smart bed unit increased by 4% to $5,992.
Looking ahead, Sleep Number is focused on improving its financial resilience through ongoing restructuring efforts initiated in late 2023. The company anticipates incurring an additional $10 million to $15 million in restructuring costs throughout 2025. Despite the current challenges, management remains committed to enhancing operational efficiencies and driving product innovation to better meet consumer needs. The company’s liquidity position remains stable, with $558 million in borrowings under its revolving credit facility and a commitment to maintaining compliance with financial covenants.
About Sleep Number Corp
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