What happened

Shares of Sleep Number (NASDAQ:SNBR), a leader in sleep innovation, biometric sleep tracking, and mattress retailing, are up more than 17% Thursday morning after the company released fourth-quarter results.

So what

Net sales increased 13% during the fourth quarter to $412 million, topping analysts' estimates of $408 million, and full-year sales increased 6% to a record $1.53 billion. Fourth-quarter adjusted earnings per share checked in at $0.58, lower than analysts' estimates calling for $0.72 per share. Despite the earnings miss, management remained confident about the company's outlook.

Mattresses at a retail store.

Image source: Getty Images.

"Our purpose-driven brand and our revolutionary new 360® smart beds are driving enthusiastic consumer engagement and accelerated performance, including 12% adjusted net sales growth and 48% adjusted EPS growth for the second half of 2018," stated Shelly Ibach, president and CEO, in a press release. "We expect this trajectory to continue in 2019 as we advance our initiatives to drive demand, leverage our business model and deploy capital efficiently."

Check out the latest Sleep Numberearnings call transcript.

Now what

Sleep Number has had its ups and downs, and some investors have given up waiting for its Sleep Number 360 smart beds to move the needle on financial results. Remember that back in 2017 the company was targeting earnings per share of $2.75 for full-year 2019 and, despite a strong fourth quarter and positive outlook, the company is now expecting full-year results in the range of $2.25 to $2.75 per share. Sleep Number delivered a strong back half of 2018, and if its 360 smart beds continue to gain traction and power earnings, 2019 should be a solid step forward for investors.