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what it is
Sleep Number sells premium smart beds, adjustable bases, and bedding through its own stores and website.
how it gets paid
Last year Sleep Number made $1.4B in revenue. Sleep Number smart beds was the main engine at $0.95B, or 68% of sales.
why growth slowed
Revenue fell about 16% last year (FY2025). The Q3 2025 print missed badly: about −$1.73 EPS versus a roughly breakeven consensus. EDGAR shows annual revenue near $1.4 billion.
what just happened
Q3 2025 was about one number: about −$1.73 EPS versus a roughly $0.02 loss consensus — a brutal miss.
At a glance
C balance sheet — red flag territory — real financial stress
20/100 earnings predictability — expect surprises
$(5.77) fy2025 eps (GAAP)
~$1.4B fy2025 revenue
~−3.3% fy2025 operating margin
xvary composite: 25/100 — weak
What they do
Sleep Number sells premium smart beds, adjustable bases, and bedding through its own stores and website.
Sleep Number controls the whole stack: design, manufacturing, stores, and service. Vertical integration → it keeps the middlemen out → so you get one brand owning the customer from showroom to setup. That matters when you have 611 stores in all 50 states and proprietary SleepIQ sensors built into the bed, because your sleep data and your mattress live in the same ecosystem.
How they make money
$1.4B
annual revenue · their business grew -16.1% last year
Sleep Number smart beds
$0.95B
17.0%
FlexFit adjustable bases
$0.21B
14.0%
Bedding accessories
$0.13B
18.0%
Delivery, setup, and service
$0.07B
+3.0%
SleepIQ and other
$0.04B
0.0%
The products that matter
premium adjustable mattresses
Smart Beds
77.5k units · -17%
Mattress unit sales fell 17% to 77.5k last year, while revenue per unit rose 3.4%. You can hold price for a while. You do not fix a demand problem by losing fewer customers at a higher ticket.
core demand test
simplified mattress lineup
ComfortMode Portfolio
5 new models · early 2026
Five new ComfortMode models rolled out starting early 2026 (per company commentary). The catch is simple: if a cleaner lineup cannot steady units and margin, the turnaround pitch loses its cleanest operating lever.
turnaround lever
accessories and related services
Other & Services
$100M · flat
This business sits at roughly $100M and was flat last year. It helps at the edge, but it is too small to offset a 16.1% drop in the core mattress line.
not enough yet
Key numbers
$279M
long-term debt
Debt is 3.5 times the company's roughly $79 million market cap. That flips the usual question from growth to survival.
16.1%
annual sales drop
Revenue fell to $1.4 billion, per EDGAR. Shrinking demand is a bad setup when you sell premium products with store overhead.
~−3.3%
fy2025 operating margin
FY2025 flipped to an operating loss on lower sales. That is a different setup than a thin positive margin — it raises the bar on every turnaround lever.
611
store count
A 611-store footprint gives reach in all 50 states. It also means fixed costs do not go away just because mattress demand does.
Financial health
C
strength
- balance sheet grade C — very weak — significant financial distress
- risk rank 5 — safer than 5% of stocks
- price stability 5 / 100
- long-term debt $279M (78% of capital)
C — balance sheet grade and long-term debt are flagged. this stock carries more risk than average.
Total return vs. market
Return history isn't available for SNBR right now.
source: institutional data · return history unavailable
What just happened
missed estimates
Q3 2025 was about one number: about −$1.73 EPS versus a roughly $0.02 loss consensus — a brutal miss.
That quarter also missed on sales (about $343M vs ~$363M expected). FY2025 revenue landed near $1.4B, down about 16% vs. prior year, with a GAAP loss around $132M — consistent with weakening quarterly profitability.
~$343M
q3 2025 revenue
−$1.73
q3 2025 eps
~60%
q3 2025 gross margin
the number that mattered
The EPS miss matters most because it tells you cost cuts and gross margin were nowhere near enough to protect profits.
source: Sleep Number Q3 2025 / FY2025 earnings materials · SEC filings
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What could go wrong
the #1 risk is the going-concern warning tied to losses, leverage, and shrinking bed demand.
high
Going-concern pressure
The latest annual filing raised substantial doubt about the company's ability to continue. That came after a $132M loss while long-term debt sat at $279M and the market cap was about $79M.
This is the risk that swallows every other risk. If financing tightens, equity holders are last in line.
high
Core demand keeps shrinking
Mattress unit sales dropped 17% to 77.5k last year, and mattress and bed sales fell 16.1% to $1.3B. If that trend holds, cost cuts only slow the decline.
This touches most of the business, because mattress and bed sales make up roughly 93% of the revenue shown here.
med
Premium pricing stops looking premium
Gross margin fell 430 basis points, from 59.9% to 55.6%. When a premium brand gives back that much margin, the market starts asking if the premium still exists.
Lower margin means less cash for debt service, marketing, and store support. Premium brands are supposed to protect this line.
med
The turnaround misses its window
Management is leaning on five new ComfortMode models and $50M in annualized fixed cost cuts for 2026. If either slips, the company risks running out of patience before it runs into growth.
That leaves you owning more hope than proof, with a capital structure that does not forgive delays.
A $79M equity value against $279M of long-term debt, plus a $132M annual loss, means the downside is not theoretical. The capital structure is the story.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
Gross margin after the product reset
Q4 gross margin fell to 55.6% from 59.9%. If the new lineup cannot hold this line, the premium-brand thesis keeps breaking in public.
risk
$50M cost-cut execution
Management is targeting $50M in annualized fixed cost reductions in 2026. You want to see savings show up without another ugly drop in unit demand.
calendar
ComfortMode launch read-through
ComfortMode launched early 2026. The first useful read is not the launch event. It is the next unit and margin print.
trend
Price per unit versus units sold
Revenue per unit rose 3.4% even as unit sales fell 17% to 77.5k. If price keeps rising while volume keeps falling, you are watching a shrinking niche, not a recovery.
Analyst rankings
earnings predictability
20 / 100
Low predictability means the business is hard to model from quarter to quarter. In human-speak: analysts do not trust SNBR to print steady numbers yet.
source: institutional data
Institutional activity
institutional ownership data for SNBR is being compiled.
source: institutional data
Price targets
3-5 year target range
n/a
n/a
$8
current price
n/a
target midpoint · n/a from current
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