Markets

Sleep Number shares getting pummeled after earnings letdown

Key Points
  • Sleep Number reports first-quarter sales that fall short of analyst expectations.
  • The mattress maker's stock tumbles nearly 19% in Thursday afternoon trading.
A Sleep Number representative lays on a new Sleep Number bed at the International CES in Las Vegas.
Getty Images

Shares of Sleep Number were down as much as 19% on Thursday afternoon, a day after reporting first-quarter sales that fell short of analyst expectations.

The company's net sales rose 10% to $426.4 million, below estimates of $427.5 million, according to data from Refinitiv. Same-sales also fell short of analysts' expectations, rising only 5% compared with 6.2% as originally projected. And gross margin of 61.5% posted below the 61.9% estimate.

However, the mattress maker's earnings were 80 cents per share, exceeding analysts' forecasts of 73 cents.

Despite lackluster first-quarter sales, the Minneapolis-based company reiterated its outlook for 2019 profit of $2.25 to $2.75 per share.

The bedmaker's stock was priced as low as $38.88 on Thursday afternoon.

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Key Points
  • A federal appeals court revived for a second time a 11-year-old defamation lawsuit by bedding retailer Mattress Firm against adjustable bed maker Sleep Number.
  • The 2nd U.S. Circuit Court of Appeals said a lower court judge misinterpreted New York law in dismissing claims first brought in March 2007 by Sleepy's, now part of Mattress Firm, against Select Comfort, renamed Sleep Number last November.