Q4 2025 Sleep Number Corp Earnings Call

March 12, 2026

Operator 1: Welcome to Sleep Number's Q4 and full year 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. As a reminder, this call is being recorded today, Thursday, 12 March 2026. This conference call will be available on the company's website, ir.sleepnumber.com. Please refer to today's news release to access the replay. On today's call, we have Linda Findley, President and CEO, and Amy O'Keefe, Chief Financial Officer of Sleep Number. Before handing the call over to the company, we will review the Safe Harbor statement. The primary purpose of this call is to discuss the results of the fiscal period ending on 3 January 2026. Commentary and responses to questions may include certain forward-looking statements.

Operator: Welcome to Sleep Number's Q4 and full year 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. As a reminder, this call is being recorded today, Thursday, 12 March 2026. This conference call will be available on the company's website, ir.sleepnumber.com. Please refer to today's news release to access the replay. On today's call, we have Linda Findley, President and CEO, and Amy O'Keefe, Chief Financial Officer of Sleep Number. Before handing the call over to the company, we will review the Safe Harbor statement. The primary purpose of this call is to discuss the results of the fiscal period ending on 3 January 2026. Commentary and responses to questions may include certain forward-looking statements.

Speaker #1: Welcome to Sleep Numbers' fourth quarter and full year, 2025 earnings conference call. At this time, all participants are in a listen-only mode. As a reminder, this call is being recorded.

Speaker #1: Today, Thursday, March 12th, 2026. This conference call will be available on the company's website. ir.sleepnumber.com. Please refer to today's news release to access the replay.

Speaker #1: On today's call, we have Linda Findley, President and CEO, and Amy O'Keefe, Chief Financial Officer of Sleep Number. Before handing the call over to the company, we will review the Safe Harbor statement.

Speaker #1: The primary purpose of this call is to discuss the results of the fiscal period ending on January 3rd, 2026. Commentary and responses to questions may include certain forward-looking statements.

Speaker #1: These forward-looking statements are subject to a number of risks and uncertainties outlined in the company's earnings news release and discussed in some detail in the annual report on Form 10-K and other periodic filings with the SEC.

Operator 1: These forward-looking statements are subject to a number of risks and uncertainties outlined in the company's earnings news release and discussed in some detail in the annual report on Form 10-K and other periodic filings with the SEC. The company's actual future results may vary materially. In addition, any forward-looking statements represent the company's views only as of today and should not be relied upon as representing its views as of any subsequent date. The company specifically disclaims any obligation to update these statements. Please also refer to the company's news release and SEC filings 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. I will now turn the call over to Linda Findley, Sleep Number's CEO.

Operator: These forward-looking statements are subject to a number of risks and uncertainties outlined in the company's earnings news release and discussed in some detail in the annual report on Form 10-K and other periodic filings with the SEC. The company's actual future results may vary materially. In addition, any forward-looking statements represent the company's views only as of today and should not be relied upon as representing its views as of any subsequent date. The company specifically disclaims any obligation to update these statements. Please also refer to the company's news release and SEC filings 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. I will now turn the call over to Linda Findley, Sleep Number's CEO.

Speaker #1: The company's actual future results may vary materially. In addition, any forward-looking statements represent the company's views only as of today and should not be relied upon as representing its views as of any subsequent date.

Speaker #1: The company specifically disclaims any obligation to update these statements. Please also refer to the company's news release and SEC filings 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.

Speaker #1: I will now turn the call over to Linda Findley, Sleep Number's CEO.

Speaker #2: Thank you, Rob, and good morning, everyone. Before I begin, I want to welcome Amy O'Keefe, our new CFO. After an extensive search, she joined us in December and brings with her decades of experience leading operational and financial transformations across public and private companies.

Linda Findley: Thank you, Rob, and good morning, everyone. Before I begin, I want to welcome Amy O'Keefe, our new CFO. After an extensive search, she joined us in December and brings with her decades of experience leading operational and financial transformations across public and private companies. Her focus has been on streamlining our business operations and strengthening our capital structure to support our turnaround strategy. You'll hear more from her shortly. In today's call, I will cover three things. First, how we're executing on our strategy both for growth and cost-cutting. Second, why we believe that our new marketing and product strategies are working. Third, what we're doing to manage liquidity and the capital structure. First, on delivering our strategy.

Speaker #2: Her focus has been on streamlining our business operations and strengthening our capital structure to support our turnaround strategy. You'll hear more from her shortly.

Speaker #2: In today's call, I will cover three things: first, how we're executing on our strategy, both for growth and cost-cutting; second, why we believe that our new marketing and product strategies are working; and third, what we're doing to manage liquidity and the capital structure.

Speaker #2: First, on delivering our strategy. 2025 was a pivotal year for Sleep Number as our reshaped team drove big turnaround changes at every level of the company.

Linda Findley: 2025 was a pivotal year for Sleep Number as our reshaped team drove big turnaround changes at every level of the company, from retail and corporate operations to marketing, strategy, and the rapid development of our new product line. Importantly, we delivered on the guidance we provided in our last call. Full-year net sales were $1.41 billion in line with our guidance despite reduced marketing spend and lower traffic throughout the year. Adjusted EBITDA was $78 million, exceeding our guidance of $70 million. Our use of cash for 2025 was $18 million compared to the $50 million guidance. For the full year pro forma adjusted EBITDA margin was approximately 9%, and Amy will discuss how we plan to improve margins further in 2026.

Speaker #2: From retail and corporate operations to marketing, strategy, and the rapid development of our new product line. Importantly, we delivered on the guidance we provided in our last call.

Speaker #2: Full-year net sales were $1.41 billion in line with our guidance, despite reduced marketing spend and lower traffic throughout the year. Adjusted EBITDA was $78 million, exceeding our guidance of $70 million.

Speaker #2: Our use of cash for 2025 was $18 million, compared to the $50 million guidance. For the full-year pro forma adjusted EBITDA margin was approximately 9%, and Amy will discuss how we plan to improve margins further in 2026.

Speaker #2: The long-term benefit to adjusted EBITDA margin comes from two places: first, the renewed growth from our product line redesign; and second, the significant cost savings we have already done and will continue to do this year.

Linda Findley: The long-term benefit to adjusted EBITDA margin comes from two places. First, the renewed growth from our product line redesign. Second, the significant cost savings we have already done and will continue to do this year. We radically reset the business by lowering our fixed cost structure and built a leaner, more nimble organization. We removed more than $185 million of annualized costs and have identified another $50 million of annualized fixed costs that we are executing on now. We are still in full turnaround mode, and our progress in 2025 doesn't change the fact that we still have hurdles to clear in 2026. We saw the same pressures as the rest of the industry in January and early February from severe weather and macroeconomic impacts.

Speaker #2: We radically reset the business by lowering our fixed cost structure and built a leaner, more nimble organization. We removed more than $185 million of annualized costs and have identified another $50 million of annualized fixed costs that we are executing on now.

Speaker #2: We are still in full turnaround mode, and our progress in 2025 doesn't change the fact that we still have hurdles to clear in 2026.

Speaker #2: We saw the same pressures as the rest of the industry in January and early February, from severe weather and macroeconomic impacts. We had 236 stores that were closed for at least one day in the month of January, and therefore sales at the start of the year were significantly down.

Linda Findley: We had 236 stores that were closed for at least one day in the month of January, and therefore, sales at the start of the year were significantly down. We adjusted our marketing spend and strategy to lean in when things improved, and we have seen sequential improvement into February and March, driven mostly by our product launch. That brings us to our next point about why we believe our product and marketing strategies are working and will carry us through the next phase of the turnaround. We launched our first new bed and a new adjustable base in January, and the response from customers has been fantastic. The Comfort Mode mattress, priced under $1,600, gives us access to a new group of customers while maintaining personalized comfort as the core of the experience.

Speaker #2: We adjusted our marketing spend and strategy to lean in when things improved, and we have seen sequential improvement into February and March, driven mostly by our product launch.

Speaker #2: That brings us to our next point about why we believe our product and marketing strategies are working, and will carry us through the next phase of the turnaround.

Speaker #2: We launched our first new bed and a new adjustable base in January, and the response from customers has been fantastic. The comfort mode mattress, priced under $1,600, gives us access to a new group of customers while maintaining personalized comfort as the core of the experience.

Speaker #2: As of the end of February, sales are three and a half times what we expected, and nearly twice all the sales of all three C-series beds that this bed replaces.

Linda Findley: As of the end of February, sales are 3.5 times what we expected and nearly 2 times all the sales of all three C-Series beds that this bed replaces. In addition, we are seeing very strong attach rates for adjustable bases and bedding. The success of the first Comfort Mode bed is an important indicator for the rest of the portfolio we announced this morning, as it's built off the same principles and the same value proposition. We listened to both current and prospective customers and built a product line that addresses their most critical needs of comfort, durability, and value. We also return to the core of what only Sleep Number can offer, personalized comfort, adjustability, smart technology, and temperature benefits, the only bed in the industry that bed owners can fully control whenever they want. It's comfort that shifts with you night after night.

Speaker #2: In addition, we are seeing very strong attach rates for adjustable bases and bedding. The success of the first comfort mode bed is an important indicator for the rest of the portfolio we announced this morning, as it's built off the same principles and the same value proposition.

Speaker #2: We listened to both current and prospective customers and built a product line that addresses their most critical needs of comfort, durability, and value. We also returned to the core of what only Sleep Number can offer: personalized comfort, adjustability, smart technology, and temperature benefits.

Speaker #2: The only bed in the industry that bed owners can fully control whenever they want. Its comfort that shifts with you, night after night. With four new beds available in-store and online starting March 23rd, Sleep Number beds will now reach a broader set of consumers in the premium category.

Linda Findley: With 4 new beds available in-store and online starting 23 March, Sleep Number beds will now reach a broader set of consumers in the premium category. We are leveraging years of innovation and experience surfacing luxury materials, features, comfort, temperature management, and adjustability at better price points than ever before. This enabled us to build more value per dollar in each bed, protecting our margins while also achieving a lower price point for today's premium customer. In addition to these innovative new beds, we are also making it easier to find the right bed for you by simplifying the buying experience in-store and online. With this launch, we are reducing our core lineup from 12 mattresses to 7, organized into 3 clear collections. First, Comfort Mode is our new entry point to the brand. It delivers personalized comfort and temperature management controlled without an app, all at an accessible price.

Speaker #2: We are leveraging years of innovation and experience surfacing luxury materials, features, comfort, temperature management, and adjustability at better price points than ever before. This enabled us to build more value per dollar in each bed, protecting our margins while also achieving a lower price point for today's premium customer.

Speaker #2: In addition to these innovative new beds, we are also making it easier to find the right bed for you by simplifying the buying experience in-store and online.

Speaker #2: With this launch, we are reducing our core lineup from 12 mattresses to 7, organized into three clear collections. First, comfort mode is our new entry point to the brand.

Speaker #2: It delivers personalized comfort and temperature management controlled without an app, all in an accessible price. In January, we launched the 10-inch comfort mode bed, and now we're adding an 11-inch model called Comfort Mode Luxe with three-zone comfort layer and advanced temperature materials starting at just $2,099 for a queen.

Linda Findley: In January, we launched the 10-inch Comfort Mode bed, and now we're adding an 11-inch model called Comfort Mode Luxe with three-zone comfort layer and advanced temperature materials starting at just $2,099 for a queen. Second, the Comfort Next line, starting at $2,999 for a queen, is our biggest innovation in the launch, with three all-new beds, including two that feature our new Tri-Brid design. We are the first company to combine foam, advanced temperature materials, and microcoils on top of air adjustability to deliver improved comfort, pressure relief, and durability with the personalized comfort we are known for. These exceptionally luxurious beds will be the start of our smart technology in our portfolio and will track and improve your sleep at incredibly competitive price points.

Speaker #2: Second, the comfort Next line, starting at $2,999 for a queen, is our biggest innovation in the launch, with three all-new beds, including two that feature our new tri-bridge design.

Speaker #2: We are the first company to combine foam, advanced temperature materials, and micro coils on top of air adjustability to deliver improved comfort, pressure relief, and durability with the personalized comfort we're known for.

Speaker #2: These exceptionally luxurious beds will be the start of our smart technology in our portfolio and will track and improve your sleep at an incredibly competitive price point.

Speaker #2: Third, we have our Climate Collection, starting at $5,499 for a queen, and it includes our existing Climate Cool and Climate 360 beds that differentiate with true active temperature management.

Linda Findley: Third, we have our Climate Collection, starting at $5,499 for a queen, and it includes our existing ClimateCool and Climate360 beds that differentiate with true active temperature management. This category represents the ultimate in luxurious comfort. When combined with a base, it remains the only line of mattresses on the market that offers personalized firmness, smart technology, adjustability, and active temperature control all in one bed. In fact, our temperature programs on Climate360 result in up to 52 more minutes of restful sleep per night. The new product alone isn't what gives us confidence. The marketing changes we have made are substantial. As I've said before, we can do more with the dollars we spend, and that is happening. First, we rebuilt our marketing foundation and modernized how we identify and attract customers.

Speaker #2: This category represents the ultimate in luxurious comfort. When combined with a base, it remains the only line of mattresses on the market that offers personalized firmness, smart technology, adjustability, and active temperature control all in one bed.

Speaker #2: In fact, our temperature programs on climate 360 result in up to 52 more minutes of restful sleep per night. But the new product alone isn't what gives us confidence.

Speaker #2: The marketing changes we have made are substantial. As I've said before, we can do more with the dollars we spend, and that is happening.

Speaker #2: First, we rebuilt our marketing foundation and modernized how we identify and attract customers. As a result, we saw meaningful improvements throughout 2025 in our funnel metrics, our marketing into Q4 maintained this improvement, and we're seeing accelerated year-over-year improvement in cost per acquisition so far in 2026.

Linda Findley: As a result, we saw meaningful improvements throughout 2025 in our funnel metrics. Our marketing into Q4 maintains this improvement, and we're seeing accelerated year-over-year improvement in cost per acquisition so far in 2026. Second, we also started refreshing our creative and messaging last year in social and digital channels. We also recently launched our first new commercial in more than two years with a dedicated Comfort Mode spot, where recent performance has now surpassed our prior campaign and current competitive benchmarks. The combination of this work is showing up in our annual brand tracker that we completed in January just before we announced our partnership with Travis Kelce. Despite overall pressure in the industry, we saw significant increases in every aspect of Sleep Number's brand. Brand consideration among premium shoppers grew 10% and achieved the highest consideration in the premium category.

Speaker #2: Second, we also started refreshing our creative and messaging last year in social and digital channels. We also recently launched our first new commercial in more than two years with a dedicated comfort mode spot, where recent performance has now surpassed our prior campaign and current competitive benchmarks.

Speaker #2: The combination of this work is showing up in our annual brand tracker that we completed in January just before we announced our partnership with Travis Kelsey.

Speaker #2: Despite overall pressure in the industry, we saw significant increases in every aspect of Sleep Number's brand. Brand consideration among premium shoppers grew 10% and achieved the highest consideration in the premium category.

Speaker #2: We also saw the highest levels in six years of critical consideration drivers, including value, quality, aspirational fit, comfort, and individualized comfort. Now it's up to us to build on that success and turn that brand strength into sales growth.

Linda Findley: We also saw the highest levels in six years of critical consideration drivers, including value, quality, aspirational fit, comfort, and individualized comfort. Now it's up to us to build on that success and turn that brand strength into sales growth. The marketing changes are still underway, and you will continue to see new creative, new strategies, and our partnership with Travis Kelce come to life. Finally, let's talk about liquidity and capital structure. It isn't news to anyone that we need to fix our capital structure. I knew that when I joined the business less than a year ago, and it remains our top priority. Three things hit us particularly hard in the end of 2025 and beginning of 2026.

Speaker #2: The marketing challenge changes are still underway, and you will continue to see new creative, new strategies, and our partnership with Travis Kelsey come to life.

Speaker #2: Finally, let's talk about liquidity and capital structure. It isn't news to anyone that we need to fix our capital structure. I knew that when I joined the business less than a year ago, and it remains our top priority.

Speaker #2: Three things hit us particularly hard in the end of 2025 and beginning of 2026: the industry-wide softness we already spoke about, our work to clear out inventory as we roll out the new product line, and our continued careful management of marketing spend as we lap a very high, inefficient spend of Q1 last year.

Linda Findley: The industry-wide softness we already spoke about, our work to clear out inventory as we roll out the new product line, and our continued careful management of marketing spend as we lap a very high inefficient spend of Q1 last year. This puts pressure on our liquidity, and we are implementing a plan to address this. As part of that plan, we hired Guggenheim Securities to evaluate the inbound interest we have received and advise on other opportunities to refinance our credit facility as we shape Sleep Number back into a profitable, growing company. Amy will talk about this in more detail. Before I turn the call over, I wanna thank our team members. Delivering a product reset of this scale in just 10 months, work that typically takes more than 2 years, reflects a new level of speed, collaboration, and execution across the company.

Speaker #2: This puts pressure on our liquidity, and we are implementing a plan to address this. As part of that plan, we hired Guggenheim Securities to evaluate the inbound interest we have received and advise on other opportunities to refinance our credit facility as we shape Sleep Number back into a profitable growing company.

Speaker #2: Amy will talk about this in more detail. Before I turn the call over, I want to thank our team members. Delivering a product reset of this scale in just 10 months—work that typically takes more than two years—reflects a new level of speed, collaboration, and execution across the company.

Linda Findley: Our work is focused on delivering better value for our customers, shareholders, and team members, and on bringing Sleep Number back to profitable growth. With that, I'll turn it over to Amy.

Speaker #2: Our work is focused on delivering better value for our customers, shareholders, and team members, and on bringing Sleep Number back to profitable growth. With that, I'll turn it over to Amy.

Amy O'Keefe: Thank you, Linda, and good morning. I joined Sleep Number in mid-December because I view it as a company whose intrinsic value far exceeds its market capitalization. While Sleep Number is in the midst of a turnaround, the value of its underlying assets is undeniable. Leading brand recognition, differentiated product, and the tens of billions of hours of sleep data that validate the benefits our beds have on the quality of your sleep. We have a lot of work ahead of us, but fortunately for me, Linda and the team have already done a significant amount of the hard work to put the company on a path to profitable growth. One, right-sizing the cost structure to a lower revenue base by executing on $185 million of annualized cost reductions, with line of sight to an incremental $50 million to be executed in 2026.

Speaker #1: Thank you, Linda, and good morning. I joined Sleep Number in mid-December because I view it as a company whose intrinsic value far exceeds its market capitalization.

Speaker #1: While Sleep Number is in the midst of a turnaround, the value of its underlying assets is undeniable. Leading brand recognition, differentiated product, and the tens of billions of hours of sleep data that validate the benefit our beds have on the quality of your sleep.

Speaker #1: We have a lot of work ahead of us, but fortunately for me, Linda and the team have already done a significant amount of the hard work to put the company on a path to profitable growth.

Speaker #1: One, right-sizing the cost structure to a lower revenue base by executing on 185 million dollars of annualized cost reductions with line of sight to an incremental 50 million to be executed in 2026.

Amy O'Keefe: Two, executing in record speed for Sleep Number on a completely new line of products that Linda described, which we are launching on 23 March. Three, modernizing our marketing engine with new leadership, new creative, new channel-specific media strategies, and a new partnership with Travis Kelce to strengthen the brand and drive top-line growth. This is a pivotal time for the company, and I'm excited to partner with Linda and add my deep turnaround experience to unlock value for our shareholders. I want to thank the team for their very warm welcome and efforts to get me up to speed quickly. Now let's get into Q4 results, which were better than expected. Net sales were $347 million in Q4, or 8% below the same period in the prior year.

Speaker #1: Two, executing in record speed for Sleep Number on a completely new line of products that Linda described, which we are launching on March 23rd.

Speaker #1: And three, modernizing our marketing engine with new leadership, new creative, new channel-specific media strategies, and a new partnership with Travis Kelce to strengthen the brand and drive top-line growth.

Speaker #1: This is a pivotal time for the company, and I'm excited to partner with Linda and add my deep turnaround experience to unlock value for our shareholders.

Speaker #1: I want to thank the team for their very warm welcome and efforts to get me up to speed quickly. Now, let's get into Q4 results, which were better than expected.

Speaker #1: Net sales were 347 million in Q4, or 8% below the same period in the prior year. As a reminder, fiscal year '25 benefited from a 53rd week, which favorably impacted year-over-year results by approximately 660 basis points.

Amy O'Keefe: As a reminder, fiscal year 2025 benefited from a 53rd week, which favorably impacted year-over-year results by approximately 660 basis points. Notably, the performance trend across the year improved sequentially, while the number of stores decreased by 40, exiting the year with 600 stores. As Linda noted, the impact of our improved marketing offense continues to drive efficiencies. Gross profit margin was 55.6% in the quarter, a 430 basis point decline versus the prior year, primarily driven by a $9.6 million non-recurring inventory obsolescence charge associated with our new product launch and the impact of unit deleverage, and higher tariffs. Excluding the impact of the inventory charge, adjusted gross profit margin was 58.4%.

Speaker #1: Notably, the performance trend across the year improved sequentially, while the number of stores decreased by 40, exiting the year with 600 stores. And as Linda noted, the impact of our improved marketing offense continues to drive efficiencies.

Speaker #1: Gross profit margin was 55.6% in the quarter, a 430 basis point decline versus the prior year, primarily driven by a 9.6 million dollar non-recurring inventory obsolescence charge associated with our new product launch, and the impact of unit de-leverage and higher tariffs.

Speaker #1: Excluding the impact of the inventory charge, adjusted gross profit margin was 58.4%. Operating expenses in the quarter were $197 million, down 9% year-over-year, excluding restructuring and other non-recurring costs.

Amy O'Keefe: Operating expenses in the quarter were $197 million, down 9% year-over-year, excluding restructuring and other non-recurring costs. The reduction was driven by ongoing cost savings initiatives to rightsize the fixed cost base and lower variable selling expenses. Media investments were comparable to the Q4 of the prior year, despite a 53rd fiscal week. Adjusted EBITDA was $19 million, down $7 million versus the same period last year. For the full year, net sales were $1.41 billion, consistent with our expectations, but down 16% versus the prior year. Full-year gross margin was 59%, down 60 basis points year-over-year and aligned with the guidance of 60% that we shared last quarter when excluding the impact of the Q4 inventory charge.

Speaker #1: The reduction was driven by ongoing cost savings initiatives to right-size the fixed cost base and lower variable selling expenses. Media investments were comparable to the fourth quarter of the prior year, despite a 53rd fiscal week.

Speaker #1: Adjusted EBITDA was $19 million, down $7 million versus the same period last year. For the full year, net sales were $1.41 billion, consistent with our expectations but down 16% versus the prior year.

Speaker #1: Full-year gross margin was 59%, down 60 basis points year-over-year, and aligned with the guidance of 60% that we shared last quarter when excluding the impact of the fourth quarter inventory charge.

Amy O'Keefe: Operating expenses for the full year were $824 million, a $136 million reduction from the prior year, excluding restructuring and other non-recurring costs. On an annualized basis, we've executed approximately $185 million of cost savings initiatives, which gives us an estimated $50 million tailwind as we head into 2026. As Linda mentioned, 2025 adjusted EBITDA was $78 million, exceeding our most recent outlook of $70 million. Importantly, for the full year, pro forma adjusted EBITDA margin was approximately 9%, a 200 basis point improvement versus the prior year. Turning to the balance sheet and cash flow, we ended the year in full compliance with our credit agreement and debt covenants. Total liquidity, including cash and revolver capacity, was $58 million at year-end, well above the amended $30 million covenant floor.

Speaker #1: Operating expenses for the full year were $824 million, a $136 million reduction from the prior year, excluding restructuring and other non-recurring costs. On an annualized basis, we've executed approximately $185 million of cost savings initiatives, which gives us an estimated $50 million tailwind as we head into 2026.

Speaker #1: As Linda mentioned, 2025 adjusted EBITDA was 78 million dollars, exceeding our most recent outlook of 70 million. Importantly, for the full year, pro forma, adjusted EBITDA margin was approximately 9%, a 200 basis point improvement versus the prior year.

Speaker #1: Turning to the balance sheet and cash flow, we ended the year in full compliance with our credit agreement and debt covenants. Total liquidity including cash and revolver capacity was 58 million dollars at year-end, well above the amended 30 million dollar covenant floor.

Amy O'Keefe: Full-year free cash flow was a use of $18 million, which was just over $30 million favorable to expectation. However, it was unfavorable by $21 million compared to the prior year, primarily due to top line pressure and non-recurring cash restructuring costs. Capital expenditures of $14 million were down $9 million compared to the prior year. Looking ahead to 2026, as Linda mentioned, January demand was soft versus last year and our internal expectations. As we planned, the media investment in January was down significantly year-over-year and reallocated to after the launch of our new products, when the return on investment is likely to be much higher. Moving into February, we saw a sequential improvement in performance during the President's Day event as we launched Comfort Mode.

Speaker #1: Full-year free cash flow was a use of 18 million, which was just over 30 million dollars favorable to expectation. However, it was unfavorable by 21 million compared to the prior year, primarily due to top-line pressure at non-recurring cash restructuring costs.

Speaker #1: Capital expenditures of 14 million were down 9 million compared to the prior year. Looking ahead to 2026, as Linda mentioned, January demand was soft versus last year and our internal expectations.

Speaker #1: As we planned, the media investment in January was down significantly year-over-year and reallocated to after the launch of our new products, when the return on investment is likely to be much higher.

Speaker #1: Moving into February, we saw a sequential improvement in performance during the president's day event as we launched comfort mode. Not only were we pleased with comfort mode sales performance, but gross margin is well above our legacy opening price point beds.

Amy O'Keefe: Not only were we pleased with Comfort Mode sales performance, but gross margin is well above our legacy opening price point beds. This provides another proof point that we can regain competitive positioning in the premium opening price point as we planned. We're excited to launch the rest of our product line in late March. Given the magnitude of the change that we are executing in 2026 as part of our turnaround plan, we will not be providing guidance today. However, I will provide some indications of our performance expectations for the balance of the year.

Speaker #1: This provides another proof point that we can regain competitive positioning in the premium opening price point as we planned. We're excited to launch the rest of our product line in late March.

Speaker #1: Given the magnitude of the change that we are executing in 2026 as part of our turnaround plan, we will not be providing guidance today.

Speaker #1: However, I will provide some indications of our performance expectations for the balance of the year. I will also note that we are planning cautiously to ensure that our cost base and our liquidity planning are set appropriately as revenue ramps sequentially over the balance of the year.

Amy O'Keefe: I will also note that we are planning cautiously to ensure that our cost base and our liquidity planning are set appropriately as revenue ramps sequentially over the balance of the year. While we expect Q1 net sales to decline in the high teens because of the softness we saw at the beginning of the year, with the full impact of the new product launch in Q2, along with an increase in year-over-year media spend, we expect a significant improvement in year-over-year revenue performance in Q2. We further expect double-digit sales growth in the second half with the full benefit of, one, new products, two, new creative assets, and three, marketing reach with our new strategic partner, Travis Kelce.

Speaker #1: While we expect Q1 net sales to decline in the high teens because of the softness we saw at the beginning of the year, with the full impact of the new product launch in the second quarter, along with an increase in year-over-year media spend, we expect a significant improvement in year-over-year revenue performance in Q2.

Speaker #1: We further expect double-digit sales growth in the second half, with the full benefit of one new product's two new creative assets and three marketing reach with our new strategic partner, Travis Kelsey.

Amy O'Keefe: As a result of cost savings initiatives and the expected ARU improvement from new products, adjusted EBITDA for the full year is expected to increase in the high teens to mid-twenties % range year-over-year, and we expect free cash flow to be positive. Lastly, but importantly, and as Linda mentioned, while we are seeing improvement in the business, the softness from the start of the year and the clearance of our existing products have put pressure on our liquidity and covenants. We are actively implementing a plan to address this as further detailed in our Form 10-K and have engaged an advisory bank, Guggenheim Securities, to help us. We will continue to monitor our liquidity position and covenant compliance and will work with our advisors to address our credit facility and evaluate inbound interest and other opportunities to improve the company's liquidity, balance sheet, and financial flexibility.

Speaker #1: As a result of cost savings initiatives and the expected ARU improvement from new products, adjusted EBITDA for the full year is expected to increase in the high teens to mid-20s percent range year-over-year, and we expect free cash flow to be positive.

Speaker #1: Lastly, but importantly, and as Linda mentioned, while we are seeing improvement in the business, the softness from the start of the year and the clearance of our existing products have put pressure on our liquidity and covenants.

Speaker #1: We are actively implementing a plan to address this, as further detailed in our Form 10-K, and have engaged an advisory bank, Guggenheim Securities, to help us.

Speaker #1: We will continue to monitor our liquidity position and covenant compliance, and we'll work with our advisors to address our credit facility and evaluate inbound interest and other opportunities to improve the company's liquidity, balance sheet, and financial flexibility.

Amy O'Keefe: With that, I will turn it to the operator for Q&A.

Speaker #1: With that, I will turn it to the operator for Q&A.

Operator 2: Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. We ask that you please limit yourself to one question and one follow-up. Your first question today comes from the line of Daniel Silverstein from UBS. Your line is open.

Operator: Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. We ask that you please limit yourself to one question and one follow-up. Your first question today comes from the line of Daniel Silverstein from UBS. Your line is open.

Speaker #2: Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad.

Speaker #2: We ask that you please limit yourself to one question and one follow-up. Your first question today comes from a line of Dan Silverstein from UBS.

Speaker #2: Your line is open.

Daniel Silverstein: Hi. Good morning. Thank you so much for taking our question. Congrats on the announcement of the product launch. Our first question is just on that. With the new product launches, what were the main pain points you were trying to address? The Comfort Mode product replaced its predecessor at a higher margin. How will these new beds reset, you know, the impact on ASPs, cost per bed, and margins going forward? Thank you.

Speaker #3: Hi, good morning. Thank you so much for taking our question. Congrats on the announcement of the product launch. Our first question is just on that.

Speaker #3: So with the new product launches, what were the main pain points you were trying to address? And then the Comfort Mode product replaced its predecessor at a higher margin.

Speaker #3: How will this new announcement today—how will these new beds reset the impact on ASPs, cost per bed, and margins going forward? Thank you.

Linda Findley: Sure. Yeah. I'll start on both of those, and then I'll have Amy jump in as well. First of all, thanks very much for the congratulations and the questions. Pain points, first of all, was going back to exactly what we talked about before. Customers right now, when you think about the people who are most interested in the premium category, we really wanted to expand our audience to be able to serve our existing customer base and then broaden into younger demographics and additional demographics that would want access to the benefits of a Sleep Number bed. We focused on comfort, value, and durability in everything that we built.

Speaker #2: Sure. Yeah. So I'll start on both of those, and then I'll have Amy jump in as well. So first of all, thanks very much for the congratulations and the questions.

Speaker #2: So pain points first of all was going back to exactly what we talked about before. Customers right now, when you think about the people who are most interested in the premium category, we really wanted to expand our audience to be able to serve our existing customer base and then broaden into younger demographics and additional demographics that would want access to the benefits of a sleep number bed.

Speaker #2: So we focused on comfort value and durability in everything that we built. But one of the advantages that we have is all of the investments that Sleep Number has made in innovation over the years really came to pay off in this particular product line where we were able to take incredibly luxurious materials, temperature management materials, and other new innovations around comfort, including foam and our new micro coils that we're putting into two of our new beds, to really say, "We're going to take luxury materials and bring them to a much more accessible premium price point." So what this allows us to do is both more directly address comfort and improved sleep from our past innovation history in a better price point for our customers.

Linda Findley: One of the advantages that we have is all of the investments that Sleep Number has made in innovation over the years really came to pay off in this particular product line, where we were able to take incredibly luxurious materials, temperature management materials, and other new innovations around comfort, including foam, and our new microcoils that we're putting into two of our new beds to really say, we're gonna take luxury materials and bring them to a much more accessible premium price point. What this allows us to do is both more directly address comfort and improved sleep from our past innovation history in a better price point for our customers. There's a much clearer step-up strategy too now.

Speaker #2: And there's a much clearer step-up strategy, too, now. So, there are the beds that don't require an app that allow people to experience the brand for the first time, and then you can move into some of our smart technology and our other beds that we're rolling out today or introducing today.

Linda Findley: There's the beds that don't require an app that allow people to experience the brand for the first time, and then you can move into some of our smart technology and our other beds that we're rolling out today or introducing today. In that concept, we built these beds for manufacturability. One of the challenges, and you've heard us say in the past, is that in order to really maintain our margin, we were kind of selling up the line.

Speaker #2: In that concept, we built these beds for manufacturability. And one of the challenges, and you've heard us say in the past, is that in order to really maintain our margin, we were kind of selling up the line.

Linda Findley: We have some incredible beds, and we still have our Climate Series beds that we mentioned today that are doing extremely well, but we wanted to make every bed in the line the same margin and a strong margin profile, in order to make sure that our sales team could really sell the best bed for whoever the customer is and not have to worry about the impact to the margin profile. Our Comfort Mode bed is as margin accretive as our Climate360 beds, and that allows us to serve the customer more clearly, more directly, and also protect our margins at the same time. Sort of two double answers there to your questions, but we are really excited about this launch, not only for what it means for customers, but what it does mean for our margin profile. Anything you wanna add, Amy?

Speaker #2: We have some incredible beds, and we still have our Climate Series beds that we mentioned as well. But we wanted to make every bed in the line the same margin, and have a strong margin profile, in order to make sure that our sales team could really sell the best bed for whoever the customer is and not have to worry about the impact to the margin profile.

Speaker #2: So our Comfort Mode bed is as margin-accretive as our Climate 360 beds. And that allows us to serve the customer more clearly, more directly, and also protect our margins at the same time.

Speaker #2: So sort of two double answers there to your questions, but we are really excited about this launch, not only for what it means for customers, but what it does mean for our margin profile.

Amy O'Keefe: Yeah. I'll just jump in on gross margin. You know, we are expecting, as I mentioned, a sequential increase in ARU as these products transition out and the legacy products, you know, are discontinued. The exciting part for a finance person is that gross margin if I just look at the Comfort Mode bed. This is just the one SKU that we've already launched, which is performing, as Linda mentioned, well above our expectations, 3.5 times the plan. The best part of that for me is the gross margin. If I just look at that compared to the two beds in the C-Series that it's replacing, it's a 10 percentage point gross margin improvement compared to the prior year.

Speaker #2: Anything you want to add, Amy?

Speaker #4: And I'll just jump in on gross margin. We are expecting, as I mentioned, a sequential increase in ARU as these products transition out and the legacy products are discontinued.

Speaker #4: The exciting part for a finance person is that gross margin, if I just look at the comfort mode bed compared to and this is just the one SKU that we've already launched, which is performing as Linda mentioned, well above our expectations, three and a half times the plan.

Speaker #4: The best part of that for me is the gross margin. If I just look at that compared to the two beds in the C Series that it’s replacing, it’s a 10-percentage-point gross margin improvement compared to the prior year.

Amy O'Keefe: It's really exciting, not only for, you know, early indications of the performance, but also the margin profile of the business.

Speaker #4: So it's really exciting. Not only for early indications of the performance, but also the margin profile of the business.

Daniel Silverstein: Very, very helpful. Thank you. Just one quick follow-up. Could you just touch on the major sources of the $50 million of additional savings you think you can drive this year? Will there be any further clearance activity as we nudge up to 23 March?

Speaker #3: Very, very helpful. Thank you. And just one quick follow-up. Could you just touch on the major sources of the $50 million of additional savings you think you can drive this year?

Speaker #3: And will there be any further clearance activity as you nudge up to March 23rd?

Amy O'Keefe: Sure. Last year, the, you know, Linda and the team, as we mentioned, took a significant amount of cost out of the business. Annualized basis, it was $185 million. I think those were, you know, forgive the term, but sort of blunt force, right? The team needed to move fast in order to protect our liquidity position. I think over the last several months, a quarter or more, we have been looking, I think, more surgically at where opportunity remains to take costs out of the business. You know, at a super high level on the incremental annualized 50, there's a lot of logistics, delivery, last mile, you know, labor model resets, and we're still taking a look at our corporate overhead structure.

Speaker #4: Sure. And so, last year, Linda and the team, as we mentioned, took a significant amount of cost out of the business on an annualized basis.

Speaker #4: It was $185 million and I think those were forgive the term, but sort of blunt force, right? The team needed to move fast in order to protect our liquidity position.

Speaker #4: I think, over the last several months—a quarter or more—we have been looking, I think, more surgically at where opportunity remains to take costs out of the business.

Speaker #4: And at a super high level on the incremental annualized 50, there's a lot of logistics, delivery, last mile, labor model resets, and we're still taking a look at our corporate overhead structure.

Amy O'Keefe: You know, I think those things, those are the big activities in the $50 million.

Speaker #4: And so, I think those things are the big activities in the $50 million.

Linda Findley: Importantly, just to add to that, all of the $50 million has already been identified. We're already executing on it, and it is all fixed cost.

Speaker #2: And importantly, just to add to that, all of the $50 million has already been identified. We're already executing on it, and it is all fixed costs.

Amy O'Keefe: Yes, all fixed cost.

Speaker #4: Yes. All fixed costs.

Daniel Silverstein: Thank you so much. Best of luck.

Speaker #3: Thank you so much. Best of luck.

Amy O'Keefe: Thank you.

Linda Findley: Thank you.

Speaker #4: Thank you.

Speaker #2: Thank you.

Operator 2: Your next question comes from the line of Bobby Griffin from Raymond James. Your line is open.

Operator: Your next question comes from the line of Bobby Griffin from Raymond James. Your line is open.

Speaker #1: Sure. Next question comes from Alina. Bobby Griffin from Raymond James. Your line is open.

Bobby Griffin: Good morning, guys. Thanks for taking the questions. Congrats on the first product launch there.

Speaker #5: Good morning, guys. Thanks for taking the questions. And congrats on the first product launch there. I guess first, for me, I think the release or maybe the prepared remarks called out March 23rd as the date, but what's the phasing as we look at getting these three to six new beds now that you talked about on the floors and kind of across the portfolio?

Linda Findley: Thanks.

Bobby Griffin: I guess first for me, I think the release or maybe the prepared remarks called out 23 March as the date, but, like, what's the phasing as we look at getting these six new beds now that you talked about on the floors and kind of across the portfolio, how does that phasing work throughout the year? If you can, just give us a date that you feel the floors will be largely set and, you know, the stores will look as you want them to be.

Speaker #5: How is that phasing worked throughout the year? And if you can, just give us a date that you feel the floors will be largely set in the stores will look as you want them to be.

Linda Findley: I'll jump in on that. First of all, we launched one bed earlier this year. That was the Comfort Mode bed, the first bed that we launched. There are four new beds plus a base. Sorry, we launched the first new bed and base in January. There are four new beds and a new base that are all going to be available for purchase starting on 23 March. Those are the ones that we announced today, and that completes the product reset, plus, of course, the existing Climate series that we have, Climate360, ClimateCool, that are already obviously on floor. All the beds will be available for purchase starting on 23 March, and we will start setting floors on 23 March.

Speaker #2: So I'll jump in on that. First of all, the all four—so we launched one bed earlier this year. That was the Comfort Mode bed, the first bed that we launched.

Speaker #2: There are four new beds plus a base. Sorry, we launched the first new bed and base in January. There are four new beds and a new base that are all going to be available for purchase starting on March 23rd.

Speaker #2: Those are the ones that we announced today. And that completes the product reset. Plus, of course, the existing climate series that we have, climate 360, climate cool, that are already obviously on floor.

Speaker #2: So all the beds will be available for purchase starting on March 23rd. And we will start setting floors on March 23rd. So we will start with our first highest volume stores and most of the stores will be set by mid-April.

Linda Findley: We will start with our first, highest volume stores, and most of the stores will be set by mid-April. We'll have a few more stores that might roll out into May. For the most part, the key stores will all be set by mid-April.

Speaker #2: Then we'll have a few more stores that might roll out into May. But for the most part, the key stores will be will all be set by mid-April.

Bobby Griffin: Okay. Basically, floor will be in good shape for the Memorial Day holiday. That's what I was getting at.

Speaker #5: Okay, so basically, the floor will be in good shape for the Memorial Day holiday. That's what I was getting at.

Linda Findley: Absolutely. That is exactly what we're planning for. Yes.

Speaker #2: Absolutely. That is exactly what we're planning for—yes.

Bobby Griffin: Okay. That's very encouraging. I guess I understand the dynamics around not wanting to give the guide, but just one clarification, Amy, and then maybe a little help. The EBITDA number, the growth that you're referencing, that's versus the reported number in 2025, not the pro forma number?

Speaker #5: Okay. That's very encouraging. And I guess just on I understand the dynamics around not wanting to give the guide, but just one clarification, Amy, and then maybe a little help.

Speaker #5: But the EBITDA number that the growth that you're referencing, that's versus the reported number in 25, not the pro forma number?

Amy O'Keefe: That's correct. Off the $78 million adjusted EBITDA base.

Speaker #4: That's correct. That's correct. Off the $78 million adjusted EBITDA base.

Bobby Griffin: Okay.

Amy O'Keefe: High teens to mid-twenties percent range improvement.

Speaker #5: Okay. And if you.

Speaker #4: Pricing is the mid-20s percent range improvement.

Bobby Griffin: Yep. Okay, perfect. If that comes to fruition and you guys are able to deliver that, would that translate into positive free cash flow for the year? Understand this business-

Speaker #5: Yep. Okay. Perfect. And then if that comes to fruition and you guys are able to deliver that, would that translate into positive free cash flow for the year?

Amy O'Keefe: Yeah.

Bobby Griffin: Typically has, you know, really good cash flow metrics, but it would?

Speaker #5: Understand this business typically has really good cash flow metrics, but it would?

Amy O'Keefe: Absolutely.

Speaker #4: Absolutely.

Bobby Griffin: Okay. Thank you. That's very helpful. I'll jump back in the queue for myself. Thank you for the time.

Speaker #5: Okay. Thank you. That's very helpful. I'll jump back in the queue for myself. Thank you for the time.

Linda Findley: Great. Thank you.

Speaker #4: Great. Thanks, Bobby.

Speaker #2: Thank you.

Amy O'Keefe: Thanks so much, Bobby.

Operator 2: Your next question comes from a line of Peter Keith from Piper Sandler. Your line is open.

Operator: Your next question comes from a line of Peter Keith from Piper Sandler. Your line is open.

Speaker #1: Your next question comes from Alina. Peter Keith from Piper Sandler. Your line is open.

[Analyst] (Piper Sandler): Hi, this is Sarah in for Peter. Thanks for taking our questions. First, just on the marketing spend, given the meaningful reductions in 2025, are you guys thinking about investment in 2026? Should we expect those marketing dollars to start trending back up, particularly as the new product lineup rolls out? Or is current spend kind of sufficient to drive demand?

Peter Keith: Hi, this is Sarah in for Peter. Thanks for taking our questions. First, just on the marketing spend, given the meaningful reductions in 2025, are you guys thinking about investment in 2026? Should we expect those marketing dollars to start trending back up, particularly as the new product lineup rolls out? Or is current spend kind of sufficient to drive demand?

Speaker #6: Hi, this is Sarah on for Peter. Thanks for taking our questions. First, just on the marketing spend—given the meaningful reductions in 2025, how are you guys thinking about investment in ’26?

Speaker #6: Should we expect those marketing dollars to start trending back up, particularly as the new product lineup rolls out? Or is current spend kind of sufficient to drive demand?

Linda Findley: Right. As we spoke about before, what we're actually doing in 2026 compared to 2025 is you'll see marketing held flat as total spend in 2026 over 2025. What that means in reality, because 2025 had very high spend in Q1, much lower spend in Q2 and Q3, and then moderated, sort of relatively flat spend in Q4. That was the shape of the curve in 2025. Someone compared it to a square root at one point. When you look at 2026, what we're actually doing is evening that spend out across the entire year, so you don't have any peaks and valleys of spend that can create inefficiencies. What that means in reality is Q1 is actually down because, again, Q1 spend last year was extremely high before I joined the business.

Speaker #2: Right. So as we spoke about before, what we're actually doing in 2026 compared to 2025 is you'll see marketing held flat as total spend in 2026 over 2025.

Speaker #2: But what that means in reality because 2025 had very high spend in Q1, much lower spend in Q2 and Q3, and then moderated sort of relatively flat spend in Q4.

Speaker #2: That was the shape of the curve in 2025. Someone compared it to a square root at one point. So when you look at 2026, what we're actually doing is evening that spend out across the entire year.

Speaker #2: So you don't have any peaks and valleys of spend that can create inefficiencies. And so what that means in reality is Q1 is actually down because, again, Q1 spend last year was extremely high before I joined the business.

Linda Findley: Q1 spend is slightly down. Q2, Q3, and Q4 will be up year-over-year relative to last year because of the fact that we're evening out the spend. You are gonna see increased spending, as Amy mentioned, in line with our full rollout of the products.

Speaker #2: So Q1 spend is slightly down. Q2, 3, and 4 will be up year over year relative to last year because of the fact that we're evening out the spend.

Speaker #2: So you are going to see increased spending as Amy mentioned in line with our full rollout of the products.

Amy O'Keefe: The only thing I'd add is that Q2 is up higher.

Speaker #4: And the only thing I'd add is that Q2 is up higher than the back half by quarter is roughly flat, but the flip-flop is really between Q1 and Q2.

Linda Findley: Yes.

Amy O'Keefe: Right? The back half by quarter is roughly flat.

Linda Findley: Yeah.

Amy O'Keefe: The flip-flop is really between Q1 and Q2.

Linda Findley: Yeah.

Speaker #2: Yep.

[Analyst] (Piper Sandler): Okay. Thank you. Very helpful. Just a quick follow-up on the clearance of existing products. Was that primarily greater markdown than expected? Did you say that was expected to be a headwind on each with those newer products and on the reduction?

Peter Keith: Okay. Thank you. Very helpful. Just a quick follow-up on the clearance of existing products. Was that primarily greater markdown than expected? Did you say that was expected to be a headwind on each with those newer products and on the reduction?

Speaker #6: Okay, thank you. Very helpful. And then just a quick follow-up on the clearance of existing products: Was that primarily greater markdown than expected? And then did you say that was expected to be a headwind in Q1 with those newer products and the reduction?

Amy O'Keefe: Sorry, are you finished with your question?

Speaker #4: So sorry. You finished with your question.

Amy O'Keefe: Sorry, are you finished with your question?

[Analyst] (Piper Sandler): No, yeah. That was.

Peter Keith: No, yeah. That was.

Speaker #6: No. Yeah. Gotcha.

Amy O'Keefe: Gotcha.

[Analyst] (Piper Sandler): Okay.

Peter Keith: Okay.

Amy O'Keefe: We are gonna see unquestionably some margin pressure in Q1. This new product rollout is monumental, compared to, you know, other product launches in the company's history. I mean, I think we say we haven't seen such significant change in a decade. With a hard stop, and we definitely didn't want to do a rolling change of these products because we wanted to get the revenue ramp and the margin benefits as early as we possibly could. We're definitely gonna be taking some discounting and hits to margin in Q1, because of the hard stop and the softness that we talked about in January and February. We had a little bit more inventory hangover than we would have liked, and we're working through that in the month of March.

Speaker #4: So we are going to see unquestionably some margin pressure in Q1. So this new product rollout is monumental compared to other product launches in the company's history.

Speaker #4: I mean, I think we say we haven't seen such significant change in a decade and so with a hard stop. And we definitely didn't want to do a rolling change of these products because we wanted to get the revenue ramp and the margin benefits as early as we possibly could.

Speaker #4: So we're definitely going to be taking some discounting and hits to margin in Q1 because of the hard stop and the softness that we talked about in January and February.

Speaker #4: We had a little bit more inventory hangover than we would have liked, and we're working through that in the month of March.

Linda Findley: Yeah. The only thing I would add to that is it was. You were asking if it was expected, and we did expect to do some clearance work. I think that's fairly standard in a launch of this magnitude. One of the things that we are excited about with what we've seen from the launch of Comfort Mode is, you know, it outsold 3.5x our plan, but it's also outselling all three of the beds it replaces by 2x. You get leverage with volume as well. That's a big part of what we're thinking about long term is, of course, the volume play and how we can increase leverage that way, too. There's trade-offs in everything that we're looking at, but this was expected.

Speaker #2: Yeah. The only thing I would add to that is it was you were asking if it was expected, and we did expect to do some clearance work.

Speaker #2: So I think that's fairly standard in a launch of this magnitude. One of the things that we are excited about with what we've seen from the launch of Comfort Mode is this it outsold three and a half times our plan, but it's also outselling all three of the beds it replaces by two times.

Speaker #2: So you get leverage with volume as well. And that's a big part of what we're thinking about long-term is, of course, the volume play and how we can increase leverage that way too.

Speaker #2: So there's trade-offs in everything that we're looking at, but this was expected.

[Analyst] (Piper Sandler): Okay, thank you.

Peter Keith: Okay, thank you.

Speaker #6: Okay. Thank you.

Operator 2: As we have no further questions, ladies and gentlemen, this will conclude today's question and answer session. I'd now like to turn the conference back over to Linda Findley for any closing remarks.

Operator: As we have no further questions, ladies and gentlemen, this will conclude today's question and answer session. I'd now like to turn the conference back over to Linda Findley for any closing remarks.

Speaker #1: And as we have no further questions, ladies and gentlemen, this will conclude today's question and answer session. I'd now like to turn the conference back over to Linda for any closing remarks.

Linda Findley: Thank you very much for your time today. We're excited for our customers to experience our new product lineup later this month, and we remain very focused on the key elements of our turnaround strategies as we actively address our capital structure. I look forward to updating you on our continued progress in the coming months. As always, if you have any questions, please contact us directly.

Speaker #2: Thank you very much for your time today. We're excited for our customers to experience our new product lineup later this month, and we remain very focused on the key elements of our turnaround strategies as we actively address our capital structure.

Speaker #2: I look forward to updating you on our continued progress in the coming months. As always, if you have any questions, please contact us directly.

Operator 2: This concludes today's conference call. Thank you all for joining. You may now disconnect.

Operator: This concludes today's conference call. Thank you all for joining. You may now disconnect.

Q4 2025 Sleep Number Corp Earnings Call

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