Sleep Number Corporation · Q2 2022 earnings

Briefing

Net sales increased and diluted EPS grew versus the prior year.

Sleep Number Corporation reported a 13% increase in net sales to $549 million and a 75% increase in diluted EPS to $1.54 for the second quarter of 2022. The company updated its full-year 2022 diluted EPS outlook to a range of $3.00 to $4.00 per share.

• Second-quarter net sales increased 13% and diluted EPS grew 75% versus the prior year
• Year-to-date net sales increased 2% with year-to-date diluted EPS of $1.60 versus $3.44 for the same period last year on constrained electronics supply, inflation pressures and low consumer sentiment
• Gross margin of 59.2% of net sales, more than 100 basis points above expectations due to favorable product mix which more than offset operating inefficiencies resulting from the uneven flow of electronics supply
• Leverage ratio of 3.3x EBITDAR at the end of the second quarter; more than $375 million of liquidity remains against current debt facility

Headline financials

Revenue & EPS history

The company updated its full-year 2022 diluted EPS outlook to a range of $3.00 to $4.00 per share based on macro conditions. The outlook assumes low single-digit net sales growth for 2022 on a high single-digit demand decline, while servicing excess backlog. The company anticipates 2022 capital expenditures of approximately $70 million.