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From Home Furnishing Business
Sleep Number Releases Fourth Quarter and 2022 Sales
February 26,
2023 by HFBusiness Staff in Business Strategy, Industry 
Sleep Number released their end-of-year and fourth quarter numbers for the year ended Dec. 31, 2022.
Fourth quarter net sales increased 1% versus the prior year and full year net sales decreased 3% to $2.11 billion, with full year diluted earnings per share (EPS) of $1.60.
The company generated $36 million of operating cash flows for the year and an adjusted ROIC of 17.6%. This provides 2023 earnings outlook of $1.25 to $2.00 per diluted share.
“As we navigated a series of significant macro challenges in 2022, we achieved important strategic advancements that strengthen our sleep technology leadership. These advancements will position Sleep Number to capitalize on profitable growth opportunities when the consumer environment improves,” said Shelly Ibach, chair, president and CEO of Sleep Number.
Net sales were $498 million, up 1% compared with $492 million last year, and gross profit decreased 3% to $272 million, or 54.7% of net sales, compared with $280 million or 56.9% of net sales for the prior year. Net loss per diluted share of $0.24, was compared to net income per diluted share of $0.47 last year.
“Consumer response to our best innovation to date – the new Climate360 smart bed – has been strong, and we are excited to introduce our next-generation smart beds beginning in the second quarter. We are seeing improved demand trends early in the year, with the consistent flow of microchips supporting normalized delivery times for our smart beds and adjustable bases.”
I am grateful to our Sleep Number team for their resilience and commitment to our purpose of improving the health and wellbeing of society through higher quality sleep.”
For the full year 2022, net sales decreased 3% to $2.11 billion in 2022; full year demand declined 13% versus the prior year, partially offset by the delivery of excess backlog.
Gross profit decreased 9% to $1.2 billion, or 56.9% of net sales, including the impact of year-over-year input cost increases and inefficiencies from semiconductor chip constraints, partially offset by pricing actions. Diluted EPS was $1.60, compared to $6.16 last year.
The company expects 2023 diluted EPS of $1.25 to $2.00. The 2023 outlook assumes net sales are flat to down mid-single digits versus the prior year. The outlook assumes gross margin rate improves by more than 150 basis points versus 2022. The company expects to generate over $100 million of operating cash flow for the year and positive free cash flows.
The company anticipates 2023 capital expenditures of $50 million to $60 million and is planning no share repurchases during the year.
To access the webcast of the conference call, please visit the investor relations area of the Sleep Number website at https://ir.sleepnumber.com. The webcast replay will remain available for approximately 60 days.