Sleep Number Corporation’s SNBR fourth-quarter 2024 earnings topped the Zacks Consensus Estimate and grew year over year. On the other hand, net sales missed the consensus mark and tumbled year over year.

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The ongoing softness in the U.S. bedding industry, along with a lower store count, marred the sales growth during the quarter. However, despite the declining market trends, the company’s bottom line witnessed a boost due to the benefits from the transformed operating model and lower operating expenses.

Moving forward, SNBR aims to focus on fostering improved demand and further advancing its operating model transformation to reap notable profits in the long term.

Post the earnings announcement, SNBR stock slipped 6.9% in Wednesday’s after-hours trading session.

SNBR’s Q4 Earnings & Net Sales

The company reported an adjusted loss per share of 18 cents, which topped the Zacks Consensus Estimate of loss per share of 22 cents. In the year-ago quarter, it reported an adjusted loss of 58 cents per share.

Net sales of $376.8 million lagged the consensus mark of $389 million by 3% and declined 12% from the prior-year quarter’s level.

Sleep Number’s Operating Highlights

The quarter’s gross profit decreased to $225.6 million from $242.9 million reported in the year-ago quarter. The gross margin expanded year over year by 330 basis points (bps) to 59.9%. The margin expansion was driven by year-over-year product cost reductions, favorable product mix and efficiency gains in its home delivery and logistics operations.

Total operating expenses of SNBR reduced 15.1% year over year to $222.8 million. The operating expenses (as a percentage of net sales) contracted 200 bps to 59.1% from 61.1% reported last year.

The adjusted EBITDA increased year over year to $26.2 million from $18.3 million. The adjusted EBITDA margin expanded year over year by 270 bps to 7%.

A Glimpse at Sleep Number’s 2024

Net sales for the year totaled $1.68 billion, down 11% year over year from $1.89 billion.

The gross margin expanded 190 bps to 59.6% from 57.7% reported in 2023. Total operating expenses (as a percentage of net sales) during the year increased to 58.2% from 56.5% last year.

The adjusted EBITDA margin increased 40 bps to 7.1%.

SNBR’s Financial Position

As of Dec. 28, 2024, Sleep Number had cash and equivalents worth $2 million, down from $2.5 million at the end of 2023. Inventories at the end of 2024 were $103.2 million, down from $115.4 million at 2023-end.

Net cash provided by operations totaled $27.1 million in 2024 against net cash used in operations of $9 million in the prior year. Capital expenditures totaled $82 million for the year.

SNBR’s Zacks Rank & Few Consumer Discretionary Releases

Sleep Number currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Leggett & Platt, Incorporated LEG reported fourth-quarter 2024 results, with earnings meeting the Zacks Consensus Estimate and revenues beating the same. On a year-over-year basis, both metrics declined.

The quarterly results indicated a weak demand in the company’s residential end markets due to a challenging macro environment and soft consumer spending. Softening in Automotive and Hydraulic Cylinders further impacted the company’s performance. Although LEG carried out its restructuring and operating efficiency improvement initiatives, the headwinds mentioned above overshadowed the prospects to a great extent.

Flexsteel Industries, Inc. FLXS reported impressive second-quarter fiscal 2025 (ended Dec. 31, 2024) results, with earnings and net sales surpassing the Zacks Consensus Estimate. Both metrics increased on a year-over-year basis.

Despite persistent challenges in the industry, Flexsteel has been gaining market shares. The company continued its growth trend, achieving the fifth consecutive quarter of positive growth in sales. This growth was broad-based, with strong performance in core markets and new initiatives. In addition, Flexsteel expanded its operating margin and generated positive free cash flow. This enabled it to pay off its remaining bank debt and begin accumulating cash.

Mohawk Industries, Inc. MHK reported better-than-expected results for the fourth quarter of 2024, with adjusted earnings and revenues topping the Zacks Consensus Estimate. The top line increased year over year while the bottom line declined.

The quarter’s performance reflects benefits realized from the sales actions, restructuring initiatives and productivity improvements undertaken by the company. Furthermore, the product introductions made last year, coupled with the marketing initiatives, backed the global sales trend. However, adverse impacts from the U.S. hurricanes, along with soft residential demand trends in its end markets, partially offset the quarter’s results.

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