Sleep Number Corp stock was down about 15% in early trading Thursday (April 21) after the company reported several downward trends in its fiscal 2022 first-quarter earnings report Wednesday (April 20), including a 7% decline in net sales to $527 million because of the semiconductor chip shortage.
Meanwhile, demand dipped 3% in the three-month period that ended April 2, a function of the spread of the omicron variant of the coronavirus and the ongoing war in Ukraine, while backlog is up 20% since December to more than $200 million, according to a company press release.
“External factors continue to disrupt global supply and weaken consumer confidence, resulting in increased business complexity and volatility,” said Shelly Ibach, president and CEO, in the press release. “In this dynamic environment, we remain focused on deepening consumer relationships and innovating for broad relevance while taking decisive actions to address near-term pressures.
“Our team is highly engaged and resilient, and our business model, liquidity and competitive advantages are strong. We remain steadfast in our commitment to fulfilling our purpose and creating superior long-term shareholder value,” she said.
Sleep Number generated $25 million in net cash from operating activities in the first quarter of fiscal 2022, compared to $112 million for the same period last year because of constrained current year deliveries and changes in working capital, according to the press release.
Related: Sleep Number Blames Chip Shortage for Subpar Q4 Performance
In February, Sleep Number missed its fourth-quarter earnings expectations because of the late arrival of semiconductor parts.
Sleep Number didn’t say which supplier’s delinquency cost the company millions of dollars in sales for the three-month period that ended Jan. 1. The late arrival of the chips slashed the company’s net sales by more than $125 million, equal to about 2.5 weeks of deliveries, and sales for the quarter fell 13% compared to the previous year, down to $492 million.
Full-year net sales jumped to a record $2.18 billion.
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