Sleep Number Outlines Turnaround Progress in Q4 Earnings Call

Company highlights cost reductions, product overhaul, and liquidity challenges amid industry pressures

Mar. 12, 2026 at 2:48pm

Got story updates? Submit your updates here. ›

Sleep Number NASDAQ: SNBR outlined progress in its turnaround efforts during its fourth-quarter and full-year 2025 earnings call, highlighting cost reductions, an accelerated product overhaul, and steps being taken to address liquidity and the company's capital structure. The company reported full-year results that met or exceeded prior guidance, but faced sales declines and margin pressures in Q4 due to an inventory charge and industry-wide pressures.

Why it matters

Sleep Number's earnings call provides insight into the challenges facing the bedding industry, as the company navigates a product reset, cost-cutting initiatives, and liquidity concerns amid broader macroeconomic pressures. The company's turnaround efforts and ability to execute on its strategic plans will be closely watched by investors.

The details

Sleep Number reported full-year 2025 net sales of $1.41 billion, in line with guidance, and adjusted EBITDA of $78 million, above the company's guidance. However, Q4 sales declined 8% year-over-year to $347 million, with gross margin pressured by a $9.6 million inventory obsolescence charge related to the new product launch. The company outlined $185 million in annualized cost reductions executed, with another $50 million identified. Sleep Number also highlighted the launch of its new ComfortMode mattress line, which has seen strong early demand, as part of a broader product reset. Management cited liquidity and capital structure as a top priority, with the company working with advisors on refinancing opportunities.

  • The fiscal year ended January 3, 2026.
  • Sleep Number launched its first new bed and a new adjustable base in January 2026.
  • The company will have four new beds available in stores and online starting March 23, 2026.
  • Most stores will have the new product lineup set by mid-April 2026, with some continuing into May.

The players

Sleep Number

A Minneapolis-based company specializing in the design, manufacture and retail of adjustable air mattresses and bedding products.

Linda Findley

The CEO of Sleep Number, who said 2025 was a 'pivotal year' as the company reshaped teams and made 'big turnaround changes' across retail and corporate operations, marketing, and product development.

Amy O'Keefe

The CFO of Sleep Number, who joined the company in mid-December 2025.

Got photos? Submit your photos here. ›

What they’re saying

“2025 was a 'pivotal year' as the company reshaped teams and made 'big turnaround changes' across retail and corporate operations, marketing, and product development.”

— Linda Findley, CEO

“The ComfortMode SKU delivered a 10 percentage point gross margin improvement versus the two c-series beds it replaced compared to the prior year.”

— Amy O'Keefe, CFO

What’s next

The judge in the case will decide on Tuesday whether or not to allow Walker Reed Quinn out on bail.

The takeaway

Sleep Number's turnaround efforts, including a major product reset and cost-cutting initiatives, will be closely watched as the company navigates industry-wide pressures and liquidity concerns. The success of the new ComfortMode line and the company's ability to improve its financial flexibility will be key to its long-term recovery.