Sleep Number Corp (NASDAQ:SNBR) reported better-than-expected Q3 results and also narrowed FY19 EPS guidance. The company also announced a $500-million buyback.
The Minneapolis-based company reported net sales increased 14% to a record $475 million, including a 10% comparable sales gain
Prior year’s reported results were impacted by one week of deliveries ($24 million of net sales and 23 cents of EPS) which shifted from the third to the fourth quarter.
Gross profit rate increased 200 basis points to 62.4% of net sales compared with 60.4% for the same period last year
Operating income increased 55% to $39 million, or 8.2% of net sales, up 210 basis points versus the prior year’s third quarter
Earnings per diluted share increased 81% to $0.94, compared with $0.52 for the prior year
To quote CEO Shelly Ibach, "Our revolutionary Sleep Number 360® smart beds are delivering life-changing sleep and drove double-digit demand growth on top of double-digit demand growth the prior year. Our multi-year initiatives are resulting in the sales and profit growth we anticipated.
"We are creating a future where our 360® smart bed will be the hub for consumers’ health and wellness with individualized digital health as core to our business."
The company raised its 2019 earnings per diluted share outlook to a range of $2.45 to $2.75. The outlook includes up to 10% net sales growth for the full-year and a 25% effective income tax rate for the fourth quarter.
Shares slumbered 18 cents to $46.68
