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MINNEAPOLIS - Sleep Number Corporation (NASDAQ:SNBR) announced a significant restructuring of its Board of Directors, including upcoming retirements of five current members, as part of an agreement with its largest shareholder, Stadium Capital Management, LLC. The changes aim to create a smaller, more agile board to navigate a challenging market and drive profitable growth. The announcement comes as the company faces significant headwinds, with its stock trading near its 52-week low of $6.46, down over 65% in the past six months. According to InvestingPro analysis, the company maintains impressive gross profit margins of nearly 60% despite current challenges.
The company’s 2025 Annual Meeting of Shareholders will see the departure of Michael J. Harrison and Shelly R. Ibach, who will not seek reelection. Additionally, Barbara R. Matas, Brenda J. Lauderback, and Stephen L. Gulis, Jr. have agreed to accelerate their retirements, with Lauderback stepping down by December 31, 2025, and Gulis leaving by the earlier of the completion of the company’s debt refinancing or the 2026 Annual Meeting.
Hilary A. Schneider will take over as Chair of the Management Development and Compensation Committee following the 2025 Annual Meeting, in anticipation of Lauderback’s retirement. Incoming Board Chair Phillip M. Eyler expressed gratitude for Stadium Capital’s collaboration and emphasized the focus on shareholder value. He also acknowledged the contributions of the retiring members.
Stadium Capital’s Co-Founder Alexander M. Seaver voiced approval of the board’s renewal efforts and expressed confidence in the new leadership’s priorities to transform Sleep Number. As part of the agreement, Stadium Capital will withdraw its director nominations and support Sleep Number’s nominees at the 2025 Annual Meeting.
The details of the agreement will be disclosed in a Form 8-K report to be filed with the U.S. Securities and Exchange Commission. This move is part of Sleep Number’s broader strategy to enhance its performance and align its leadership with market conditions. With total debt of $936 million and current financial health rated as WEAK by InvestingPro, the restructuring comes at a crucial time. The company, known for its sleep wellness platform and smart bed ecosystem, remains committed to improving sleep quality and has impacted nearly 16 million lives with its products and research. For deeper insights into Sleep Number’s financial health and growth potential, including 12+ additional ProTips and comprehensive valuation metrics, investors can access the full Pro Research Report on InvestingPro.
This report is based on a press release statement from Sleep Number Corporation.
In other recent news, Sleep Number Corporation reported its fourth-quarter 2024 earnings, revealing a slight beat on earnings per share (EPS) but a significant miss on revenue. The company posted a revenue of $377 million, falling short of the forecasted $413.17 million, and marking a 12% decline year-over-year. Despite the revenue shortfall, Sleep Number’s adjusted EBITDA improved by 43% to $26 million, attributed to effective cost management strategies. The company also introduced the Climate Cool series, focusing on higher-margin products, although the market conditions remain challenging. Meanwhile, Raymond James maintained a Market Perform rating on Sleep Number stock, noting the company’s fourth-quarter adjusted EBITDA narrowly missed consensus estimates. Analyst Bobby Griffin pointed out the lack of guidance for 2025 due to an upcoming CEO transition, which adds to the uncertainty regarding the company’s recovery trajectory. Sleep Number plans to focus on cost efficiency and margin improvement while considering debt restructuring options. The company faces ongoing challenges such as tariffs and declining consumer sentiment, but it continues to explore strategies to optimize its operations and financial resilience.
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