Sleep Number Reports Q2 2025 Net Sales Down 19.7%, Achieves $130M in Cost Savings

Sleep Number's Q2 2025 net sales decreased 19.7% YoY to $328mln, with a net loss of $25mln due to a $13mln adjustment to deferred tax assets. The company exceeded its cost savings targets, achieving $130mln in savings for 2025. Sleep Number projects full-year 2025 net sales of $1.45bln, a 14% decline YoY, and expects operating expenses to reach $830mln.

Sleep Number Corporation (Nasdaq: SNBR) reported its second-quarter 2025 results, revealing a decrease in net sales and a net loss, but also significant cost savings and future projections. The company's net sales for the quarter ended June 28, 2025, totaled $328 million, a 19.7% year-over-year (YoY) decline. This decrease was driven by lower volume and a reduced store count [1].

The company reported a net loss of $25 million, inclusive of a $13 million adjustment to the valuation of deferred tax assets. This loss compares to a net loss of $5 million for the same period last year. Despite the loss, Sleep Number achieved a gross profit margin of 59.1%, consistent with the prior year. The company also reduced second-quarter operating expenses by $48 million, or 21%, year-over-year, before restructuring and other non-recurring costs [1].

One of the standout achievements for Sleep Number was exceeding its cost savings targets for 2025. The company implemented $130 million in cost savings, surpassing its annualized target of $80 million to $100 million. This move helped Sleep Number maintain compliance with its debt covenants and set the stage for future growth [1].

Looking ahead, Sleep Number expects full-year 2025 net sales of approximately $1.45 billion, representing a 14% YoY decline. This projection is partly driven by softer year-over-year comparisons and the 53rd week in 2025. The company anticipates a gross profit margin of 61% for the year, consistent with the first quarter of 2025. Operating expenses, excluding restructuring and other non-recurring costs, are expected to reach approximately $830 million [1].

Sleep Number's CEO, Linda Findley, commented on the company's turnaround efforts, stating, "Sleep Number is in a turnaround. In my first 100 days, the new leadership team has been focused on digging into our product and consumer proposition. It is clear Sleep Number has a strong brand and differentiated products. We are building on these core strengths with plans to return to profitable growth by starting to implement initiatives focused on enhancing our product assortment, value proposition, and consumer engagement" [1].

The company is also working to optimize its product portfolio, value, and distribution, aiming to focus on the products, price points, and benefits that matter most to its customers. Additionally, Sleep Number expects its actions to drive sequential topline improvement in the coming quarters while continuing to aggressively manage costs [1].

References:
[1] https://www.businesswire.com/news/home/20250729982295/en/Sleep-Number-Announces-Second-Quarter-2025-Results