What happened

In an overall red day for the stock markets, bed retailer Sleep Number (NASDAQ:SNBR) 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 (NYSE: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. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.