Sleep Number Corp. Q1 sales slide 7% on chip shortage, Covid and the war in Ukraine.
MINNEAPOLIS – A constrained supply of chips, the Omicron variant of COVID and the war in Ukraine attributed to a 7% decline in first quarter net sales for sleep brand Sleep Number Corp., according to the company.
Net sales for the period ended April 2 were $527 million, compared with $568 million in the same period of 2021. The company said it also saw a 3% dip in consumer demand.
“External factors continue to disrupt global supply and weaken consumer confidence, resulting in increased business complexity and volatility,” said Shelly Ibach, president and CEO. “In this dynamic environment, we remain focused on deepening consumer relationships and innovating for broad relevance while taking decisive actions to address near-term pressures. Our team is highly engaged and resilient, and our business model, liquidity and competitive advantages are strong. We remain steadfast in our commitment to fulfilling our purpose and creating superior long-term shareholder value.”
This marks the second quarter in a row that supply chain issues negatively impacted Sleep Number’s sales. The company said its backlog has increased to more than $200 million.
Net income for the quarter dropped 96% to $2 million from $66.6 million in the same quarter last year.
The company updated its full-year 2022 diluted EPS outlook to a range of $5 to $6 per share. The outlook assumes low double-digit net sales growth for 2022 on at flat to low single-digit demand growth the balance of the year, while servicing excess backlog. The company said it expects to generate approximately $200 million of cash from operations and anticipates 2022 capital expenditures of $70 million to $80 million.
I’m Sheila Long O’Mara, executive editor at Furniture Today. Throughout my 25-year career in the home furnishings industry, I have been an editor with a number of industry publications and spent a brief stint with a public relations agency where I worked with some of the industry’s leading bedding brands. I rejoined Furniture Today in December 2020 with a focus on bedding and sleep products. It’s a homecoming for me, as I was a writer and editor with Furniture Today from 1994 until 2002. I’m happy to be back and look forward to telling the important stories impacting bedding retailers and manufacturers.
