Q4 2020 Sleep Number Corp Earnings Call
Okay.
Non smokers.
[music].
Welcome to sleep Number's Q4, and full year 2020 earnings conference call on <unk>.
Lines have been placed in a listen only mode until the question and answer session. Today's call is being recorded if anyone has any objections you may disconnect at this time I would now.
To introduce Dave Chanteuse price.
President of Finance and Investor Relations you may begin.
Good afternoon.
And welcome to the Sleep number Corporation fourth quarter 2020 earnings Conference call. Thank you for joining us.
I am Dave Schwantes, Vice President of Finance and Investor Relations.
With me today are Shelly ibach, our president and CEO and David Callen, Our Chief Financial Officer.
This telephone conference is being recorded and will be available on our website at sleep number dot com.
Please refer to the details in our news release to access the replay.
Please also refer to on news release for a reconciliation of certain non-GAAP financial measures and supplemental financial information included in the news release or that may be discussed on this call.
The primary purpose of this call is to discuss the results of the fiscal period just ended.
However, our commentary and responses to your questions may include certain forward looking statements.
These forward looking statements are subject to a number of risks and uncertainties outlined in our earnings news release and discussed in some detail in our annual report on form 10-K, and other periodic filings with the SEC.
The company's actual future results may vary materially.
I will now turn the call over to Shelly for her comments.
Yes.
Good afternoon, and welcome to our 2024th quarter earnings call My Sleep IQ score was 86 last night.
Quality sleep is vital to our health and wellness.
Our physical mental and emotional well being it.
Yeah.
Immunity increased energy and improved recovery.
It is life changing sleep number 360, smart that benefit our overall health and wellness by improving our restful time asleep.
Sleep number is a beloved brand our team deep relationship with customers is grounded in our culture of individuality and wealthy.
Resulted from more than 13 million line improved and sustainable profitable growth.
We are delivering long term strategic and financial performance because of our differentiated strategy and vertically integrated business model.
Our current five year total shareholder return is greater than 600%.
Over the past five fiscal years, we delivered compound annual growth rate of nine percentage sales <unk>.
15%, and EBIT, GAAP, and 38% and earnings per share.
Our 2020, ROIC was 25% more than 14 points higher than five years ago.
At the inception of our consumer innovation strategy in 2012, we position digital health at the core of our product and customer experience.
This strategy combined with subsequent strategic investments is fueling our profitable growth.
Our core business supports our purpose.
Of improving health and wellbeing of society through proven quality sleep.
Fewer trends that we have long anticipated were accelerated by the global pandemic and the past year, resulting in three structural shifts.
First consumers are prioritizing wellbeing.
One in net of their family and they now better understand the strong link between sleep and overall health and wellness.
Second consumers are adopting digital products and services at a much higher rate and they are increasingly relying on digital health solutions.
Third consumers, having heightened preference for brands that are characterized by authentic purpose and human empathy.
Each of these shifts is enduring driving permanent changes in consumer purchase behavior.
With our strategic investment in sleep science based innovation.
<unk> technology and brand accelerators, we are positioned to continue taking market share and delivering superior stakeholder value in this transformed environment.
We significantly broadened our sleep leadership and brand relevant during the past year.
Our record results are a testament to our mission driven team.
Their ingenuity agility encouraged on net an unprecedented health crisis global economic shock and civil unrest.
They generated new ways to digitally connect with customers and operate in a more efficient manner, while in a constant state of paper change.
Our strategy and vertically integrated business model created a flywheel for sustainable growth driving consumer demand and performance.
Sales demand in the fourth quarter accelerated.
It exceeded our Q4 net sales growth and contributed to double digit demand growth for the full year.
This momentum continues in the first quarter.
Full year net sales of $1 9 billion grew 9% net.
Net operating profit increased to 65% to 10% of net sales.
Earnings per share were $4 90.
81% stronger than our $2 70 record EPS in 2019.
And we generated record cash from operations of $280 million up 48%.
Our breakthrough performance is being driven by our revolutionary 360, smart beds, and investment, which sustainably leverage our competitive advantages.
As consumers increasingly prioritizing their health and wellbeing and recognize its link to quality sleep demands for our revolutionary 360, smart beds has accelerated.
Since transitioning to all smartphones in Q3 2018.
10 quarters ago demand for our bed has grown an average of 12%.
Our new M series smart beds with their temperature balancing features are increasing consumer interest.
He will introduce the pea and seek theories market in the coming months with a new digitally led marketing campaign focused on their health and wellness benefits.
Please by two technology Optimizes, the smart benefit to deferred continually improving restful time of sleep through <unk> technologies and individualized fleet data.
This high impact content is amplified by our advocates and NFL partnership.
In the fourth quarter digital traffic to our brands was up 50% consideration and conversion are at record levels.
Our health related advancements, including circadian rhythm insights and night time heart rate variability directly link and individuals sleep quality, two day time productivity and overall well being.
Our net lease IQ progression will link sleep quality to day time alertness.
These highly relevant personal metrics increased engagement and retention of our smart speakers, which in turn provides the foundation for scaling innovation.
Now with more than 1 billion sleep sessions, and 9 billion hours of longitudinal data, we are extending our sleep leadership into connected health.
Our work is informed by our sleep number scientific advisory Board and our collaboration with Mayo Clinic and other partners, such as Oxford Pharma Genesis and award winning independent Global Health Science consultancy.
We will publish new research using our proprietary data and insights illuminating the impact of sleep on health in the coming months.
In keeping with increased consumer adoption of digital products and services. Our digital ecosystem is also enabling sleep number to efficiently acquire new customers and build lifelong relationships.
We continue to benefit from internal digital capabilities.
Through automation machine learning and proprietary data, we are more quickly identifying the highest potential consumers.
This real time intelligence and relevant content led to a 29% unit increase in Q4, while maintaining strong average revenue per unit and leveraging on media investment.
By deepening customer engagement and scaling our smart sweeper community, we are amplifying their advocacy.
Our connected life changing sleep experience.
Our digital capabilities also enables us to adapt our cost structure and help manage inventory to support a more customer focused supply chain.
These ongoing advancements in our digital ecosystem continue to widen our competitive advantages and provide a compelling source of future growth.
Our agile go to market approach Leverages, our sleep professional skills in building customer relationships and aligned with how our customer wants to shop in store online or by phone.
Our approach seamlessly integrate promotions financing selling process media and proprietary innovations.
Our online and phone sales grew 93% in the fourth quarter and increased to 104% for the full year, a strong contribution to our 6% comparable sales gain for the year. Despite the sales decline in Q2 from the onset of the pandemic.
We continued to strengthen our online customer journey and expect it to be an important source of future growth.
Our well honed market development strategy is continuing to deliver higher profitability and market share gains.
We surpassed our long term target of $3 million per store in 2020.
Can sleep number stores exceeded $6 million, each and one store eclipsed $7 million annual sales.
We continue to take market share by advancing our integrated initiatives, we expect revenue growth from all touch points in 2021, including new store growth, which will be a greater driver in the second half.
We also expect growth in both units and average revenue per unit for the full year.
Finally, with heightened focus on corporate responsibility stakeholders are engaging with our mission driven team culture of individuality company purpose and long term orientation.
Improving the health and wellbeing of society through higher quality sleep remains our guiding light.
Throw up throughout 2020, our purpose data inspired us informed our business decisions and actions, including gifting a mark that to all of our team members partnering with make a wish to support critically ill children with life changing sleep and <unk>.
Joining the United Nations Global compact.
As we look to the future we will continue to strengthen our corporate stewardship by making this a better world through higher quality sleep.
In our second annual corporate responsibility and sustainability report, we will provide details of our ongoing social environmental and governance efforts.
Okay.
With continued exceptional consumer demand in the first quarter and strong growth initiatives in place we are driving toward another year of breakthrough performance.
For the full year of 2021, we expect to deliver at least $6 of EPS compared to $4 90 in 2020 and more than double our 2019 EPS of $2 70.
Our results are propelled by the convergence of our growing sleep innovation leadership and brand relevance revolutionary New 360 smart value.
To delete connected ecosystem.
<unk> direct to consumer distribution and lifelong customer relationships.
In a year of challenge and change sleep number delivered exceptional results by leveraging the power of vertical integration Digitization and the mission driven team.
Our unwavering focus on doing what is right for our customers team communities and partners has made a difference in this challenging time.
We have continued to lean into the competitive advantages inherent in our differentiated strategy.
As a result, our brand reputation customer and team member engagement and our financial performance are all at high <unk>.
We remain positioned to generate sustainable profitable growth in 2021 and beyond.
Our sleep number team is grounded in our resolute belief in individuality and the life changing impact of quality sleep, which translate to superior shareholder value.
Thank you team per year devotion to our stakeholders.
Inspire me every day.
Now David will provide additional financial details on our fourth quarter performance and outlook for 2021.
Thank you Shelly.
Exceptional execution in the pandemic here was an outcome of the innovation philosophy net per day to our business.
Faced with the most serious threats from COVID-19, followed quickly by explosive demand resurgence.
Our teams dreamliner processes and embrace digital capabilities across the company.
We are truly working differently.
The result.
Fishing fees were achieved in 2020 that we had not expected for another year or two.
2020 was as the saying goes an overnight success 10 years in the making made possible by the culture of problem solving and innovation embraces sleep number.
Despite the more than 100% increase in our share price. So last year, we believe execution of our sleep science and technology enabled strategy and digitally advantaged business will deliver significant upside for all stakeholders.
The groundwork for our 2020 performance began years ago with an understanding that proven quality sleep is highly correlated with health and wellbeing.
This strategic clarity reinforced by disciplined investments and growth enablers and growth drivers produced average top line expansion of 9% in 2017 through 2019 with average three year EPS increases of 35% nearly four times with top line growth.
In 2020, our teams added to this multi year top decile performance with another year of 9% topline growth and an explosive 81% growth in EPS, a multiple of nine times the rate of top line expansion.
We have been creating superior value for years and continue to drive for breakthrough performance in 2021 and beyond.
Before talking more about the future, let's review our 2020 results.
Net sales grew 9% to nearly $1 $86 billion.
Excluding $41 million from the extra week net sales grew 7% for the year. Despite the 20% year over year decline in the COVID-19 affected second quarter.
Net sales growth in Q4 accelerated to 29% or 20% without the extra week up from 12% growth in Q3.
Demand accelerated throughout the back half, resulting in 12% average growth for the past 10 quarters.
It's two and a half years of double digit digit average growth. Despite three months this year of material Covid pressure.
Our 2020 sales metrics reflected healthy and growing business.
Comps grew 6% new stores contributed one five points.
With an additional two five points from the 50 <unk> week.
Our breakthrough marketing and selling initiatives delivered 10% unit growth in 2020, while still generating a strong <unk> of nearly $4900 notwithstanding the 104% increase in sales through online and phone touch points.
And this year when the agility of our teams technology and partnerships made all the difference.
Non store sales drove 14, 5% of on net sales compared to about seven 5% historically.
A differentiating advantage of our strategy is our ability to growth from both units and ARU overtime.
The result has been more than four 5% average annual growth from each driver over the last four years.
Another source of long term growth is our national retail presence with integrated online and sterling from anywhere capabilities and on.
All 50 states.
We ended the year with 602 highly productive stores and eclipsed our longtime milestone with more than 3 million average sales per store, including online and sales made digitally outside closed stores due to COVID-19.
We expanded our 2020 gross margin rates 40 basis points to 62, 3% on top of the 130 basis point lift in 2019.
Volume leverage and efficiency initiatives.
More than offset labor inflation mixed pressure in the Q2 380 basis point Covid driven gross margin rate decline.
While the explosive demand has certainly stressed our supply chain, we are benefiting from strong relationships with our global supplier suppliers and are expediting components as needed to fulfill customer's desire for our proven quality sleep solutions.
Despite our slide supply chain constraints and significant demand growth.
Customer delivery times are within six days on average as we employed enhanced digital inventory forecasting inventory traits tracking and ingenuity of our teams and suppliers.
The flexibility and resilience, we built into our global supply chain is also enabling rapid expansion of our fulfillment capacity, including the addition of two new assembly distribution centers in Dallas and Tampa here in the first quarter of 2021.
Operating efficiency gains and selling and marketing contributed 370 basis points of leverage as reported in 2020 or 340 basis points, excluding the extra week benefit.
Our rapid response to COVID-19, including cost cuts and acceleration of initiatives that embraced working differently.
Digital investments in marketing are delivery focused targeting an efficient customer acquisition.
Selling from anywhere is driving safe efficient and effective.
Engagement with customers.
Digital workforce management tools are helping us navigate COVID-19 closure related staffing challenges.
Digital inventory monitoring and customer text communications are leading to improved customer experience and reduced waste across our vertically integrated business.
Synergies and digital solutions across our advantaged business are helping us thrive through this pandemic, while delivering significant leverage of our structure.
We continue to take actions and make decisions for the long term.
We accelerated investments in R&D by 32% in Q4 over the prior year, bringing our full year increased to 17%.
We have clear sightlines for exciting innovation that will create significant value for customers and shareholders for years to come.
Our G&A costs for the year were up 15% as we lean into digital capabilities and absorbed performance based incentive compensation and the gift of proven quality sleep for all 4700 of our sleep number team members.
2020 income taxes were 230 basis points headwind offset by nearly 7% fewer weighted average shares outstanding for the year.
As noted earlier, we drove an 81% increase in our diluted earnings per share to $4 90.
While absorbing a 45 net loss and COVID-19 affected Q2.
Adjusted earnings per share, excluding the <unk> <unk> benefit from the 50 <unk> week increased 70% over our previous record earnings one year ago.
We generated $280 million on cash from operations up 48% versus record 2019 cash flows.
About $15 million to $20 million of our planned 2020 capital projects, especially for new stores were delayed by Covid.
We completed projects totaling $37 million and are carrying forward the others into 2021.
We invested $228 million and sleep number of shares in 2020, including $190 million in Q4 at an average price of $71 per share.
Our 25% ROIC reflects the efficiency of our capital.
Appointment actions overtime and are two two times EBITDAR ending leverage compared compares to our targeted operating range of two five to three times.
We ended the year with $247 million remaining under the current authorization from our board and continue to see significant value in sleep number stock.
Turning now to our 2021 guidance and assumptions.
We expect to deliver at least $6 of diluted EPS in 2021, which implied one year growth of at least 30% over a record 2020 EPS, excluding the 50 <unk> week.
Today, we've illustrated.
The strength of our results over various time horizons.
We've been noise in 2020.
From the 50, <unk> week and the disruption from COVID-19.
We find using two year growth trajectories versus 2019 provides the clearest view of the performance we are driving.
Our 2021 EPS guidance more than doubled earnings in just two years.
It assumes more than 300 basis points of operating profit margin expansion versus 2019 on.
On two year organic net sales escalation of 25% to 30%.
For perspective on the scale of this performance remember that we delivered 9% average net sales growth the previous four years.
We expect to grow top and bottom line each quarter in 2021 versus 2019 with more of the growth coming in the first half of the year.
We expect 2021 cash generated from operations to be similar to 2020, while deploying 70% to $75 million.
And highly productive capital projects.
Our capital deployment priorities emphasize performance accelerators, maintaining capital for opportunistic investments.
And investments in sleep number shares while moving toward our operating leverage targets of two five to three times EBITDA.
Our team's rapid response and resourcefulness delivered exceptional financial performance in 2020, while setting the stage for tremendous opportunities still ahead.
The last thing engagement, we create with customers through our proprietary sleep IQ technology, and our sleep science based innovations will continue to deliver breakthrough value creation for sleep number stakeholders.
Thank you sleep number team and business partners.
Your passion to improve lives is driving exceptional performance.
Gabriel at this point please open the line for clarifying questions.
Absolutely at this time, if you'd like to ask a question press star one on your telephone keypad.
First question will come from Peter Keith of Piper Sandler. Please go ahead. Please go on.
Hi, good afternoon, great results everyone.
You had mentioned a couple of times on the call.
Your use of marketing dollars and the ability.
Automation and machine learning to target specific customers.
Was hoping you could unpack that a little bit with some more detail is that a new capability that perhaps has emerged here in the in the back half from 2020 could you give us a more granular example.
And Furthermore, does.
Does this marketing allow you to expand the demographic of your customer base versus where it's trended historically.
Great. Thank you Pierre and I'll start with the latter part of your question first yes, absolutely. It has helped us expand broaden our target customer and who we are bringing into the brands and who is purchasing and so that.
Has it has definitely widened.
With the advancement of our digital capabilities and you probably recall, we brought in how our digital capability for a few years ago. So.
This is one of those examples of.
US progressing our strategic initiative.
Each and every quarter and the year over year double digit demand increases as a result of that behavior and this is just a great example, because it all stems off the internal digital capability and as we've been advancing them each quarter leads and.
Corporate is this ecosystem and built on an ecosystem that connect with.
Highest potential consumer brings her into the final poll her all the way through however, she wants to engage and shop with US. We convert then we have ongoing engagement with our sleep IQ technology.
And then that customer becomes a part of our insider group and become an advocate for the brand engagement continues to deepen as we advance.
Health and wellness benefits like our circadian rhythm more nighttime HR V and that all amplifies its a bit of what we call the <unk>.
Flywheel.
Building on net digital ecosystem.
And on every as we add data.
The algorithm continues to strengthen and get smarter and would be more and more effective and this is what gives us confidence as we look out over the horizon and build off the consumer shifts that have happened in the trends.
But how our innovations in our product and our strategy all continue to build in the future. So looking at our roadmap and how all of this bill.
Build value over time.
Is is what gives us great confidence in delivering superior value to our stakeholders.
Okay, if I guess.
Quick follow up on that when you talked about the expanding or broadening our customer base or are there specific examples maybe.
Maybe is it geographic or or even.
There is ages that are that are new to you.
Yes.
Well first of all you can see it in the 29% net growth in the fourth quarter, but we've added a younger.
<unk>.
From.
Great.
Great growth in that.
Adding another five to eight years on you know on the younger part of the curve.
Okay, great if I could pivot maybe a financial question for David.
Two fold it looks like you are probably still running with a backlog going into Q1 I was hoping you could quantify that for US and then secondly as you.
The a lot of your peers on the industry have been raising prices rather politically.
You guys have not so kind of wondering how you feel about your pricing position right now and are there any planned price increases embedded within that guidance.
Yes, Peter Youre right, we do have.
Higher demand in the fourth quarter, which resulted in some of our deliveries that are going to move into.
2021.
That probably is about 4% to five percentage of growth.
Four to five points of the growth that I highlighted for 2021.
As far as pricing.
<unk> pricing.
On select models built into our 2021 plans.
And continue to have pricing power.
Across the line.
Based on our innovations you know that historically.
We've taken an average of about 3% benefit driven pricing per year.
It's been a little lighter than that recently, maybe half of that but we certainly have that power.
Our business model.
Okay. It sounds great. Thanks, a lot and good luck.
Thanks Peter.
Next question on come from the line of Bobby Griffin of Raymond James. Please go ahead.
Good afternoon, everybody. Thank you for taking my questions and congrats to you on the rest of the team on managing unprecedented challenging year.
I guess first on product.
First I want to circle back to your comments about the additional kind of partnerships with sleep IQ and maybe.
Maybe hoping you can expand on a little bit of that a little and where do you kind of see over the five year timeframe. Our long term time frame the potential for sleep IQ, Jeremy monetization potential or subscription type potential or any type of different partnerships that we on the sell side on the buy side might be.
Be thinking from because Youre data does stand out is pretty unique in the industry and the amount of.
We'd like Youre, not registering with more and more customers each day.
Savi.
Thanks for the question you're absolutely right.
Sure.
Sharing how significant this data is.
With our position on now.
On sleep sessions and our sleep.
This is this is such an important area, where we're extending our sleep leadership into connected health. So if you think about the half.
Number of years.
As we brought the smart badge to the marketplace and introduced.
The market of sleep.
And help people understand the link between sleep in their overall health and wellness now will be extending that to connected health and I think some of the good indications would be the circadian rhythm and the ninth time HR V.
These are measurements that really help you know optimize your day and then our upcoming.
Relief will be around daytime alertness.
So that's the beginning.
We're investing significantly in this area scaling investing and investing in multi sensory capabilities as we broadening our competitive mode.
So yes.
Yes to all of the above there is great potential in the future.
We consider from a smart bet as our base line and everything will will evolve and build off of that smart pad.
Platform.
Thank you and day.
David for the quarter can you offer a little bit more detail on the sales and marketing leverage was that media driven or the non media portion of that line item and then as a second follow up to that when we look at 2021 understanding that theres a lot of moving parts in predicting this with this environment is very difficult, but what have you assumed.
In terms of the mix of the business that that comes back on marketing levels or the non marketing portions and anything to help us kind of get a little bit of flavor around the drivers in the P&L to get to that $6 number you're targeting.
Yes, Bob.
An important.
Dynamic for sure and that's why we're we're advising that we use a two year growth off of the 29.
Our 2019 performance for your modeling purposes.
Pretty.
Excited about delivering again in 'twenty, one at least 300 basis points of.
MLP margin expansion versus 2019.
A significant portion of that did come from sales and marketing as you highlighted.
We expect.
Hold on to a lot of those gains because we learned how to work differently.
We are going to lean into our growth drivers in any event, we're going to be built.
Building out 40% to 50 stores for example, in 2021 and yet still delivering that kind of operating profit.
From a margin expansion on a two year basis.
Included in that not only our near term growth drivers like marketing and in our stores.
But we're going to be leaning in again in 'twenty, one with our R&D spending.
Okay.
Ill jump back in the queue. Thank you again and Basel IV.
As a reminder, in order to ask a question from please press star one on your telephone keypad on <unk>.
Question on come from courtesy.
Michael of Bank of America. Please go ahead.
Thanks very much.
Just wanted to follow up on.
So at this point there in terms of the sales and marketing.
Yeah, just kind of wondering if somebody new.
Otherwise permanently changed in terms of the structure of the models on.
Sales and marketing youre going through as a percentage of revenue.
So basically at least as far back as my model goes it's been running at about a 45% range on average.
Dropped to 41 further afield from 'twenty.
Clearly theres been terrific volume, so that will flow through and some efficiencies but.
Thinking about what Jabil does extremely well.
Can you guys normalizes, a little bit from.
How should we think about.
Person on.
Where that could go would go up or what's the structure.
Great current events.
I'll start and David can add some additional color I think we could hear your question. It was it was a little a little bit muffled.
It does all start with demand and I spoke about the digital ecosystem and being able to target high value consumers more efficiently and to Paul.
Customers through all the way to conversion to this.
The strengthening of our digital ecosystem is very important for guidance efficiency and that is a big source of of leverage on this line.
Line, if you think about it holistically all the way from acquisition too.
How we have ongoing engagement with the customer to advocacy and also the conversion.
Through our sleep professionals, and our new capabilities up selling from anywhere that it's all integrated the biggest Dan income of our vertically integrated business model and our consumer innovation strategy because it starts with the consumer and all of our initiatives are integrated and.
The leverage fall through as we advance and continue to invest in in our Digitization.
Okay got it.
As a follow up.
Maybe just talk true.
Your records from moving assumptions for higher tickets from 2021.
<unk>.
Kind of as a true really what I think of the puts and takes in Washington Limited.
Entry level beds looking at the past couple of quarters, it's sort of it.
Flattish, maybe theres some offset.
I guess to the positive.
We will be running less online business with more stores, which should help but yes if.
Could you just kind of walk us through kind of how youre thinking about this.
On et cetera.
Morning.
Well for share Curtis.
With our <unk>.
In store experience frankly to be.
While we have new coming out with the new C series and the New P series and yes. Those are further down the line.
Would would impact ARU.
On a vacuum that's on the how things actually work, we create excitement over the day brand and then the in store experience and online experience now.
Moving to the.
Customer to the to the product that best suits their needs and in fact that generally tracking fairly strong.
You've seen here in 2020.
We do as I said intend to have some pricing in there as well that will contribute to the ARU.
That we're expecting to grow in 2021.
Alright, Thank you very much.
Thank you.
Our next question will come from the line of Atul Maheshwari from UBS. Please go ahead.
Good evening. Thanks, a lot for taking my question I also had a question on the sales and marketing line and given that this metric knowledge, so much better than what it used to be in the past.
<unk>.
Could you highlight some of the efficiencies that you've unlocked that's driving these gains and do you think that euro.
<unk> net margin.
Trend even lower in the next few years.
And if so what will drive that.
Well, we've learned how to work a lot differently across the business first and foremost we've embraced a lot of digital capabilities, we've talked about the selling from anywhere and some of the workforce management tools that we put in place.
Also we've.
Found ways to be more efficient on the marketing side and we.
Grew marketing, 4% in 2020, so compared to our top line growth.
Our media excuse me.
4% and compared to our top line growth of 9% for the year of course, we got a lot of leverage out of on.
That line and Shelly highlighted how the digital capabilities on that front that really contributing to efficient attract and capture.
New customers. So yes, we believe that there's opportunities going forward. However.
Media and marketing capabilities are fuel for this company, we're going to lean into them.
Now one other add would be the productivity of the stores, we've talked about now surpassing over $3 million per store inclusive of our.
Online sales, we had over 100% increase in online we expect to continue to benefit from growing our online sales. In addition to growing our store sales and Super excited about having 10 stores over $6 million in one store over $7 million.
That's a significant productivity and leverage points and we continue to see growth in our markets across the country and stores.
Great. Thank you.
Thanks, Tony.
There are no further questions at this time I will now turn the call back over to the presenters for closing remarks.
Thank you for joining us today, we look forward to discussing our first quarter 2020 performance with you in April sleep, well and Dream Big.
Today's conference call. Thank you for joining you may now disconnect.
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Your line.
Okay.
Thank you.
Yes.
Sure.
Okay.