SNBR - Why Sleep Number Shares Rose 56% Last Month
Shares of Sleep Number (NASDAQ: SNBR) gained 56.1% in April, according to data from S&P Global Market Intelligence. The maker of adjustable mattress systems took some dramatic cost-savings steps in the second week of April and followed that with a strong earnings report near the end of the month.
Sleep Number's response to the ongoing COVID-19 crisis included furloughing 40% of its workers, reducing work hours for another 30% of the staff, and reducing cash payments to executives and board members in exchange for restricted stock units. The company also halted its share buybacks, drew down $262 million from its revolving credit facilities, and took out a 1-year term loan for another $75 million.
The first-quarter earnings report showed revenues rising 11% year over year to $473 million, while earnings increased by 70% to $1.36 per diluted share. Your average analyst would have settled for earnings near $0.72 per share on sales in the neighborhood of $433 million. Share prices rose more than 30% on April 23 (the day after the report) alone.