MINNEAPOLIS - Sleep Number (NASDAQ:SNBR) Corporation (NASDAQ:SNBR) announced the impending retirement of its Chair, President, and CEO, Shelly Ibach, by the 2025 Annual Meeting of Shareholders. The company's Board of Directors is working with an executive search firm to find a successor. Ibach, who has been with the company for nearly 18 years, will continue as Chair until the 2025 Annual Meeting and serve as a strategic advisor until the end of that year.
Under Ibach's leadership, Sleep Number transitioned from Select Comfort, a specialty mattress retailer, to a wellness technology company, growing its revenue from $743 million to $1.9 billion in 2023. The company credits her for driving innovation, including the introduction of the first smart bed, and establishing strategic partnerships with entities like the NFL, Mayo Clinic, and American Cancer Society.
The Board also plans to undergo changes, with Michael Harrison set to become the independent Chair following Ibach's retirement. Furthermore, two long-serving directors are expected to retire by the 2026 Annual Meeting, leading to a reduction in the Board's size. The company is also seeking shareholder approval for governance enhancements, including a process to declassify the Board and adopt a majority voting standard for certain corporate decisions.
Sleep Number has also reported its 2024 Third Quarter performance results, alongside these announcements.
These leadership and governance updates are part of Sleep Number's strategic efforts to ensure business continuity and support long-term shareholder value in challenging market conditions. The company emphasizes its commitment to innovation and financial resilience, aiming to leverage its strengths and competitive advantages for future growth.
This news is based on a press release statement from Sleep Number Corporation.
In other recent news, Sleep Number Corporation has experienced a revision in its stock outlook by Piper Sandler, who decreased the price target to $12 from the prior $13, while maintaining a Neutral rating. This comes after Sleep Number's Q2 2024 financial results, which showed a slight lead over expectations in terms of gross margin rate expansion and adjusted EBITDA. Despite softer than expected sales and customer demand in Q2, the company was able to exceed consensus expectations due to strong gross margin performance and cost reductions.
Sleep Number's management has reiterated its full-year sales and adjusted EBITDA guidance, raising the high-end expectations for gross margin expansion to over 100 basis points year-over-year. Additionally, the company is planning to reduce operating costs by $40 million to $45 million. In the face of a challenging demand environment, Sleep Number is optimistic about future growth, particularly with the launch of their new Smart Bed, ClimateCool.
Piper Sandler's revision of the price target follows these recent developments, highlighting Sleep Number's focus on operational efficiency and financial health. Despite the challenging market dynamics, Sleep Number is holding onto its market share, thanks in part to strategic management of gross margins and costs. The company continues to focus on margin restoration and cash flow generation, aiming to reach adjusted EBITDA margins in the mid-teens.
InvestingPro Insights
As Sleep Number Corporation (NASDAQ:SNBR) navigates through leadership transitions and strategic changes, recent financial data from InvestingPro sheds light on the company's current position. The company's market capitalization stands at $295.76 million, reflecting its size in the competitive sleep technology market.
InvestingPro data reveals that Sleep Number's revenue for the last twelve months as of Q2 2024 was $1,781.03 million, showing a decline of 11.98% compared to the previous period. This aligns with the challenging market conditions mentioned in the article and underscores the importance of the company's strategic efforts to ensure business continuity.
Two relevant InvestingPro Tips highlight potential concerns for investors. Firstly, Sleep Number is "quickly burning through cash," which could impact its ability to fund innovation and growth initiatives during this transition period. Secondly, the company "operates with a significant debt burden," which may limit financial flexibility as it implements leadership and governance changes.
These insights from InvestingPro provide valuable context to the company's strategic decisions and emphasize the importance of the upcoming leadership transition. Investors seeking a more comprehensive analysis can access 10 additional InvestingPro Tips for Sleep Number, offering a deeper understanding of the company's financial health and market position.
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