Sleep Number sees Q3 EPS ‘slightly below’ last year’s 22c, consensus 69c

The company states: “For the third quarter, we expect EPS to be slightly below last year’s third quarter EPS of $0.22. Specifically, we are expecting demand to be up mid- to high single digits compared to last year with net sales down low to mid-single digits due to the impact of year-over-year backlog changes. We anticipate an increase in backlog in this year’s third quarter as we optimize for efficiency with our newly transformed fulfillment network, including staffing levels. Also, for the third quarter, we expect a gross margin rate of approximately 58%. This includes transition costs associated with promotional closeout activity of our existing smart beds and launch costs related to setting all stores with next-generation smart beds. For the fourth quarter, we are expecting demand to be up mid-single to low double digits. with net sales up mid- to high single digits. We expect our Q4 gross margin rate to approach 60% as our margin initiatives mature. We expect to end the year with a normalized backlog. I will now turn the call back to Shelly for a few closing comments prior to opening up the call for Q&A.” Comments taken from Q2 earnings conference call.