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Why Sleep Number Stock Dropped Today

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

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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. 

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Stocks Mentioned

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

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