<span item_type="fundamental" item_id="1c97cb57b6f9c83fa82f87e8056cc79f" counter_id="ST/US/SNBR" env="prod"></span><span item_type="announcement" item_id="647513453984291841" env="prod"></span><p>Revenue: As of FY2027 Q1, the actual value is USD 318.99 M, missing the estimate of USD 352.07 M.</p><p>EPS: As of FY2027 Q1, the actual value is USD -2.19, missing the estimate of USD -0.01.</p><p>EBIT: As of FY2027 Q1, the actual value is USD -36.86 M.</p><p></p><p>Sleep Number Corporation operates as a single reportable segment, with company-wide performance assessed based on consolidated financial information <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>.</p><h4>Net Sales</h4><p>Net sales for the three months ended April 4, 2026, decreased by 19% to $319 million, down from $393 million in the prior-year period, primarily due to lower volume and reduced store count <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>. Retail store sales accounted for $277.6 million (87.0% of net sales) for the three months ended April 4, 2026, compared to $344.4 million (87.6% of net sales) for the same period in the prior year <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>. Online, phone, chat, and other sales were $41.4 million (13.0% of net sales) for the three months ended April 4, 2026, down from $48.8 million (12.4% of net sales) in the prior-year period <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>. Total Retail comparable sales decreased by 16% for the three months ended April 4, 2026, compared to a 15% decrease in the prior-year period <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>. The total net sales decrease of $74 million was comprised of a $54 million decrease in Total Retail comparable net sales, a $7 million decrease from online, phone, and chat, and a $13 million decrease from net store closings and other <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>. Total Retail mattress unit sales decreased by 19% year-over-year, while the average revenue per mattress unit increased to $6,021 for the three months ended April 4, 2026, from $5,992 in the prior-year period <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>.</p><h4>Gross Profit</h4><p>Gross profit for the three months ended April 4, 2026, was $184.6 million, a 23% decrease from $240.5 million in the prior-year period <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>. The gross profit margin was 57.9% of net sales for the three months ended April 4, 2026, a decrease from 61.2% in the prior-year comparable period <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>. This decrease was attributed to an unfavorable product mix (-1.4 percentage points), unfavorable cost variances and other non-mattress unit sales and warranty-related revenue deleveraging (-1.4 percentage points), and higher discounts on close-out models (-0.5 percentage points) <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>.</p><h4>Operating Expenses</h4><p>Sales and marketing expenses were $160.8 million (50.4% of net sales) for the three months ended April 4, 2026, compared with $189.1 million (48.1% of net sales) for the same period one year ago, representing a 15% decrease in expenses, including a 32% lower media spend <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>. General and administrative expenses totaled $33.6 million (10.5% of net sales) for the three months ended April 4, 2026, down from $39 million (9.8% of net sales) in the prior-year period <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>. Research and development expenses decreased to $5.3 million for the three months ended April 4, 2026, from $11 million in the prior-year period <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>. Restructuring costs significantly increased to $21.7 million for the three months ended April 4, 2026, from $0.1 million in the prior-year period, including $17.5 million in asset impairments <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>. Total operating expenses were $221.5 million for the three months ended April 4, 2026, compared to $238.7 million in the prior-year period <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>.</p><h4>Operating (Loss) Income</h4><p>Sleep Number Corporation reported an operating loss of - $36.9 million for the three months ended April 4, 2026, a decrease from an operating income of $1.9 million for the same period one year ago <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>.</p><h4>Interest Expense, Net</h4><p>Interest expense, net, increased to $13.1 million for the three months ended April 4, 2026, from $11.1 million for the same period one year ago <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>.</p><h4>Net Loss</h4><p>Net loss for the three months ended April 4, 2026, was - $50.3 million, compared with a net loss of - $8.6 million for the same period one year ago <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>. Basic and diluted net loss per share was - $2.19 for the three months ended April 4, 2026, compared with - $0.38 for the same period one year ago <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>.</p><h4>Adjusted EBITDA</h4><p>Adjusted EBITDA was $5.8 million for the three months ended April 4, 2026, down from $22.0 million for the same period one year ago <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>.</p><h4>Adjusted Return on Invested Capital (Adjusted ROIC)</h4><p>Adjusted ROIC was -13.1% on a trailing twelve-month basis for the period ended April 4, 2026, compared with 7.2% for the comparable period one year ago <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>.</p><h4>Cash Flow</h4><p>Net cash used in operating activities was - $7.8 million for the three months ended April 4, 2026, compared with - $2.6 million for the three months ended March 29, 2025 <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>. Net cash used in investing activities was - $5.4 million for both periods <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>. Net cash provided by financing activities was $13.0 million for the three months ended April 4, 2026, compared with $7.0 million for the same period one year ago <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>. Free cash flow used was - $13.2 million for the three months ended April 4, 2026, compared with - $7.2 million used for the same period one year ago <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>.</p><h4>Liquidity and Debt</h4><p>As of April 4, 2026, the company had $606 million of borrowings outstanding under its credit facility, including $178 million in outstanding term loans and $428 million outstanding under its revolving credit facility, along with $8 million in outstanding letters of credit <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>. Availability under the revolving credit facility amounted to $39 million <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>. The weighted-average interest rate on borrowings under the credit facility was 7.8% <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>.</p><h4>Outlook and Strategy</h4><p>Sleep Number Corporation has initiated a turnaround strategy, “Sleep Number Shifts,” focusing on product simplification, modernizing marketing, and optimizing distribution channels to reposition the brand and reignite growth <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>. These initiatives are supported by ongoing cost savings and operating efficiencies, including real estate optimization <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>. The company anticipates it will not remain in compliance with financial covenants over the next twelve months, raising substantial doubt about its ability to continue as a going concern, and plans to address this through engagement with lenders, fulfilling obligations, and exploring additional capital options or strategic alternatives <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>. The company expects approximately $2 million of additional restructuring costs to be incurred through the remainder of 2026 <span class="superscript" item_id="0" item_type="announcement_file" value="1" url="https://www.sec.gov/Archives/edgar/data/827187/000082718726000041/snbr-20260404.htm"></span>.</p>

Sleep Number | 10-Q: FY2027 Q1 Revenue Misses Estimate at USD 318.99 M