Sleep Number Corporation (NASDAQ: SNBR) reported Q2 EPS of $0.10, versus $0.00 reported last year. Revenue for the quarter came in at $316 million versus the consensus estimate of $314.81 million.

• Reported net sales increase of 11% to $316 million and EPS of $0.10, compared with a $0.02 loss for the prior year
• Generated TTM ROIC of 14.3%, up 70 basis points versus the prior year
• Reiterates full-year 2018 earnings outlook of $1.70 to $2.00 per diluted share

“We are excited to provide proven quality sleep to our customers with our Sleep Number 360® smart beds,” said Shelly Ibach, President and CEO of Sleep Number. “With our transition now complete, we expect performance acceleration from our new marketing campaign, differentiated retail experience and operating improvements.”

Second Quarter Overview

• Net sales increased 11% to $316 million, with comparable sales up 9%; note: the prior year’s second quarter sales were impacted by an inventory shortage which shifted approximately $25 million to the third quarter
• Operating income increased to $2 million, compared to a net operating loss of $3 million for the prior year’s second quarter. The current quarter included 230 basis points (bps) of gross margin pressure and 400 bps of operating expense leverage compared with the prior year
• Earnings per diluted share were $0.10, including one-time tax planning benefit of $0.08 associated with the new Tax Cuts and Jobs Act

Financial Outlook

The company reiterates its outlook for 2018 earnings per diluted share of $1.70 to $2.00. The outlook for the second half of 2018 assumes mid-single digit sales growth and an estimated effective income tax rate of 25%. The company anticipates 2018 capital expenditures to be approximately $50 million.

GUIDANCE:

Sleep Number Corporation sees Q3 2018 EPS of $1.71-$2.00, versus the consensus of $1.81.

For earnings history and earnings-related data on Sleep Number Corporation (SNBR) click here.