What happened
Shares of Sleep Number Corp (SNBR +18.22%) were surging after the mattress retailer posted a strong third-quarter earnings report last night. The company formerly known as Select Comfort beat estimates on the top and bottom lines, and the stock gained 16.8% as of 1:07 p.m. EDT.
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So what
Sleep Number said that overall revenue was up 3% to $414.8 million, but adjusted for a shift in its backlog and hurricane impact from a year ago, revenue was up 12% to $438.8 million. Both figures beat analyst estimates at $410.9 million. Comparable sales were flat in the period, but the adjusted earnings per share surged 34%, accounting for the shift in the backlog and a lower tax rate, to $0.75, beating estimates at $0.70.
CEO Shelly Ibach summed up the quarter, saying:
Our business has gained significant momentum since completing the transition to all Sleep Number 360® smart beds, including 19% year-over-year sales order growth in the last seven weeks of the third quarter. The timing of robust sales order growth in the quarter shifted deliveries from the third to the fourth quarter. Double-digit sales order growth has continued into October.
Now what
With its sales momentum continuing into the fourth quarter, Sleep Number confidently reiterated its full-year earnings-per-share guidance of $1.85, and sales growth in the mid-single digits. Though there has been significant disruption in the mattress industry with the rise of online purveyors like Casper and the recent bankruptcy of Mattress Firm, Sleep Number has demonstrated steady growth thanks to its innovative mattress, and the stock is back near an all-time high after today's surge.
