Sleep Number(SNBR)2024-10-30 20:08Financial Performance - Reported third quarter net sales of 28 million for the quarter, consistent with expectations, representing an 11% increase compared to the prior year[2][4] - Updated full-year 2024 adjusted EBITDA outlook to a revised range of 125 million, with expected net sales down approximately 10%[2][6] - Adjusted EBITDA for the three months ended September 28, 2024, was 24,861 thousand for the same period in 2023, an increase of approximately 11.5%[16] - Adjusted EBITDA for the trailing twelve months ended September 28, 2024, was 131,798 thousand for the same period in 2023[19] Cost Management - Reduced operating expenses by 60 million year-to-date, leading to improved financial flexibility[2][4] - The company anticipates at least 150 basis points of gross margin rate improvement for the year, driven by cost efficiencies and favorable product mix[2][6] Cash Flow and Liquidity - Increased year-to-date free cash flow by 34 million for the first nine months[2][5] - Free cash flow for the nine months ended September 28, 2024, was 16,206 thousand for the same period in 2023[17] - Net cash provided by operating activities increased to 31,816 thousand for the same period in 2023, an increase of approximately 59.7%[14] Store Performance - Retail comparable-store sales decreased by 9% in the third quarter of 2024, compared to a 14% decrease in the same quarter of 2023[15] - Average sales per store decreased from 2,670 thousand in Q3 2024, a decline of approximately 9.5%[15] - The company closed 4 stores in the third quarter of 2024, resulting in a total of 643 stores at the end of the period, down from 678 stores a year earlier[15] Debt and Leverage - The leverage ratio at the end of the third quarter was 4.2x EBITDAR, below the covenant maximum of 5.0x[5] - Consolidated funded indebtedness increased to 495,485 thousand as of September 30, 2023[19] - The net leverage ratio under the revolving credit facility increased to 4.2 to 1.0 as of September 28, 2024, compared to 3.8 to 1.0 as of September 30, 2023[19] - Total debt including operating lease liabilities decreased slightly to 935,207 thousand as of September 30, 2023[19] Net Income and Loss - Net loss for the nine months ended September 28, 2024, was 9,901 thousand for the same period in 2023[14] - The company reported a basic net loss per share of 0.44 for the same period in 2023[24] - Operating income for the nine months ended September 28, 2024, was reported at 42,546 thousand for the same period in 2023[24] Asset Management - Total assets decreased from 864,651 thousand as of September 28, 2024, representing a decline of approximately 9.1%[13] - Total current liabilities decreased from 894,042 thousand as of September 28, 2024, a reduction of approximately 4.5%[13] Innovation and Product Development - Introduced the new ClimateCool™ smart bed as part of ongoing innovation efforts to enhance customer sleep solutions[3] - Sleep Number has improved nearly 16 million lives through its wellness technology platform, which includes over 29 billion hours of longitudinal sleep data[9] Restructuring and Management Changes - The company plans to appoint Michael J. Harrison as independent Chair of the Board following the retirement of CEO Shelly Ibach[7] - The company incurred restructuring costs of $14,382 thousand during the nine months ended September 28, 2024[24] Return on Investment - Adjusted ROIC decreased to 4.5% for the trailing twelve months ended September 28, 2024, down from 14.9% for the same period in 2023[22]