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Investing.com -- Sleep Number Corporation (NASDAQ:SNBR) reported first-quarter earnings that fell short of analyst expectations, sending shares down 3.7% in after-hours trading. The bed manufacturer and retailer saw sales decline amid a challenging consumer environment.
Sleep Number posted a net loss of $0.38 per share for the quarter ended March 29, 2025, compared to analyst estimates of $0.36 earnings per share. Revenue came in at $393.26 million, missing the consensus forecast of $461.11 million and declining 16% YoY.
The company attributed the weak performance to lower sales volume and a reduced store count. However, gross profit margin improved 250 basis points to 61.2%, driven by efforts to reduce material costs and improve logistics efficiency.
"We are laser focused on delivering strong returns for shareholders and are taking a different approach to the Sleep Number business," said Linda Findley, President and CEO. "I see a way to run our business on a lower cost basis without compromising our topline."
Sleep Number announced an organizational redesign aimed at streamlining operations and reducing costs. The company cut corporate management roles by 21% and expects to achieve $80 to $100 million in annualized operating expense reductions compared to Q1 2025 levels.
Despite the cost-cutting measures, adjusted EBITDA fell 41% YoY to $22 million in the first quarter. The company did not provide full-year guidance, citing the recent leadership transition and evolving macroeconomic environment.
With consumer spending on big-ticket items remaining under pressure, Sleep Number faces challenges in reviving sales growth while implementing its new efficiency initiatives. Investors will be watching closely to see if the restructuring efforts can improve profitability in coming quarters.
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