Sleep Number (SNBR) Q4 2024 earnings summary

Executive summary

• Leadership transition announced: Linda Findley appointed as new President and CEO, effective April 7, 2025, succeeding Shelly Ibach, who is retiring after 18 years; Phillip M. Eyler to become independent Chair.

• The company executed a significant operating model transformation over the past 18 months to enhance financial resilience amid a persistently weak mattress market.

• Focused on cost reductions, margin improvement, and cash generation to offset top-line pressures from declining demand.

• Q4 net sales declined 12% year-over-year to $377 million; full-year net sales down 11% to $1.68 billion.

• Q4 adjusted EBITDA increased 43% year-over-year to $26 million; full-year adjusted EBITDA was $120 million, at the midpoint of guidance.

Financial highlights

• Q4 net sales declined 12% year-over-year to $377 million; full year 2024 net sales were $1.68 billion, down 11% versus prior year.

• Q4 gross margin rate reached 59.9% (up 330 bps YoY); full year gross margin was 59.6% (up 190 bps YoY).

• Q4 operating income was $2.8 million, compared to a loss of $19.6 million last year.

• Operating expenses reduced by $28 million in Q4 and $88 million for the full year.

• Generated $4 million in positive free cash flow for the year, up $70 million from prior year.

Outlook and guidance

• No formal 2025 financial outlook provided due to CEO transition; new guidance to be issued later.

• Industry demand expected to remain pressured in the first half of 2025, with potential for improvement in the back half, though recent trends suggest a more conservative outlook.

• Company remains focused on maximizing EBITDA, cash generation, and maintaining flexibility.