Sleep Number Corporation

Sleep Number Corporation reported a challenging fiscal year 2025, with net sales declining 16% year-over-year to $1.41 billion, driven by ongoing industry demand pressure and lower store traffic. The company recorded a net loss of $132.0 million, a significant deterioration from a $20.3 million net loss in 2024. Gross profit decreased 17% to $833.0 million, with the gross margin rate declining 0.6 percentage points to 59.0%. Operating loss was $46.6 million, compared to operating income of $22.9 million in the prior year. The company implemented substantial cost reductions, lowering operating expenses by $100 million year-over-year, excluding restructuring costs, and achieved $136 million in operating cost savings compared to 2024. However, it faces liquidity challenges, ending the year with $588.2 million in borrowings under its revolving credit facility and negative free cash flow of $18 million. Under new CEO Linda Findley, the company launched the 'Sleep Number Shifts' turnaround strategy in November 2025, focusing on product simplification, marketing modernization, and distribution optimization to reposition the brand and reignite growth.

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