Please ensure Javascript is enabled for purposes of website accessibility

Why Sleep Number Stock Dropped Today

By Howard Smith - Mar 4, 2021 at 4:46PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The bed retailer was one of the high-flier stocks the market took down today.

What happened

In an overall red day for the stock markets, bed retailer Sleep Number (SNBR 3.32%) dropped significantly more than the overall S&P 500 index. Sleep Number closed the session off about 13% on the day. 

So what

Sleep Number wasn't in bed alone today, though. Another specialty mattress maker, Casper Sleep (CSPR), also fell more than 9%. And overall markets took down many stocks that have had outsized returns over the past several months. Sleep Number shares are still up about 170% in 12 months and more than 50% just this year. 

Sleep Number retail showroom with beds under a canopy of bright blue panels.

Sleep Number retail showroom. Image source: Sleep Number.

Now what

Beds and mattresses have been selling well all through the pandemic. And Sleep Number offers a high-tech sleep solution with its adjustable air-chambered mattresses. Consumers focused on home-retail purchases much of the last year, but Sleep Number thinks the momentum will continue. 

Its fourth-quarter 2020 net sales grew 29% year over year, and it expects earnings-per-diluted share to increase 30% for the full-year 2021 versus 2020, excluding an extra 53rd week. If the company hits that earnings mark, it will represent a double in earnings per share in the last two years. 

Sometimes the market corrects, and sometimes it rotates between sectors. After a strong run in the stock, that looks to be what happened today. Long-term investors should be able to sleep well through that kind of volatility as long as the business continues to perform as expected. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Sleep Comfort Corporation Stock Quote
Sleep Comfort Corporation
SNBR
$43.56 (3.32%) $1.40
Casper Sleep Inc. Stock Quote
Casper Sleep Inc.
CSPR

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/21/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.