Sleep Number Reports Strong Q4, Announces New Features to Aid Sleep
Sleep Number shareholders can sleep well tonight: the Minneapolis-based company on Wednesday reported its sixth straight quarter of growth, ending 2019 with a net sales increase of 11 percent for a record $1.7 billion.
President and CEO Shelly Ibach credited the sustained growth to Sleep Number’s 360 “smart beds,” which capture biometric data points to provide sleep health insights and make adjustments to the mattress as you sleep. “We’re building lifelong relationships with our customers by linking smart sleep with individualized health and wellness,” said Ibach, who opened the fourth-quarter earnings call by reporting her personal Sleep IQ of 82 from the prior night (anything above 60 is considered “great”).
Sleep Number plans to introduce updated smart beds in the second quarter of 2020. Ibach described several new features, including monthly wellness reports, sleep circadian rhythm insights, heart rate variability measurements, and a temperature balancing layer that warms and cools the mattress throughout the night. “Temperature during sleep is an issue for 83 percent of people,” Ibach said.
Sleep Number’s chief rival in the premium market, Tempur-Sealy, offers a cooling mattress. Tempur-Sealy also reported a strong fourth quarter with record net sales growth.
Financial analysts asked Ibach about the mounting mattress industry competition during the earnings report. Ibach reiterated Sleep Number’s focus on health and wellness. “Sleep deprivation is a public health epidemic. We are a company with purpose. We’re dedicated to our mission of improving lives by individualizing sleep experiences. We’re committed to making quality sleep the new badge of honor for society.”
At the Consumer Electronics Show in January, Sleep Number announced a $10 million endowment to Mayo Clinic to fund sleep science research with an emphasis on cardiovascular medicine.
Sleep Number invested $59 million in capital expenditures in 2019, compared with $46 million the prior year, according its fourth quarter report. Ibach pointed to the continued investment in “Sleep IQ” technology and store expansion. Sleep Number operates 610 stores nationwide. For 2020, capital expenditures are projected to increase again, to $60 million.
“We’re investing,” said Ibach, “to ensure broad consumer relevance is delivering superior returns for our shareholders.”