Sleep Number Corporation (NASDAQ: SNBR) stock jumped more than 8 percent after the company announced third quarter financial results. According to the report, third quarter net sales grew 12% to a record $531 million, with demand growth of 16%, and operating income grew 78% and diluted EPS grew 90% to a record $1.79.
Net sales increased 12% to $531 million, including an 11% comparable sales gain; online and phone sales were up 111% versus the prior year and represented 14% of net sales. As for gross profit rate increased 70 basis points (bp) to 63.1% of net sales compared with 62.4% for the same period last year.
“Our exceptional third quarter performance reflects the ongoing relevance of our life-changing 360® smart beds as consumers deepen their understanding of the importance of quality sleep to their overall health and wellness,” said Shelly Ibach, President and CEO. “For the third consecutive year, since transitioning to our smart beds, our Q3 results reflect double-digit demand growth. We again demonstrated the resilience of our vertical business model through our top and bottom-line performance and a trailing twelve months ROIC of nearly 21%. I am thankful for our team’s amazing dedication to our mission, their ingenuity and how they keep each other safe, healthy and happy. Driven by our purpose, we are accelerating our strategic initiatives, strengthening our competitive advantages and creating meaningful value for our customers, team, business partners and shareholders.”
The company expects to generate full-year 2020 earnings per diluted share of approximately $4.00, which would represent a 48% increase versus full-year 2019 earnings per diluted share of $2.70. The outlook assumes 7% to 8% net sales growth for 2020, including an estimated two percentage points of growth and approximately 25 cents per share from the 53rd week.