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Sleep Number (SNBR)

Participants
Dave Schwantes VP, Finance and IR
Shelly Ibach President and Chief Executive Officer
David Callen SVP and Chief Financial Officer
Bobby Griffin Raymond James
John Baugh Stifel
Peter Keith Piper Jaffray
Seth Basham Wedbush Securities
Andrew Efimof KeyBanc Capital Markets
Atul Maheswari UBS
Curtis Nagle Bank of America
Call transcript
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Operator

Welcome to the Sleep Number Q4 and Full Year 2019 Earnings Conference Call. All lines have been placed in a listen-only mode until the question-and-answer session. Today's call is being recorded. If anyone has any objections you may disconnect at this time.

I would like to introduce Dave Schwantes, Vice President of Finance and Investor Relations. you. Thank

begin. may You

Dave Schwantes

Investor welcome Callen, Conference Sleep joining Call. Schwantes, and Finance am and Shelly today Quarter our CFO. Ibach, us. Corporation's XXXX Dave President and of President Earnings Thank and Vice With to afternoon me Number are David the CEO, Fourth I Relations. our Good you for

release replay. to be the may be website that at our also telephone is discussed the in our for This details on news conference the included measures or being certain a available recorded supplemental to our to this refer reconciliation in on news Please financial release information Please non-GAAP and refer access and will release news sleepnumber.com. financial of call.

call the results this discuss primary ended. purpose fiscal just is of of the to period The

and questions outlined and the our statements. risks forward-looking XX-K statements commentary SEC. However, number Report vary filings on our subject results materially. actual to in The and and may in earnings in These Form other with future responses of include forward-looking periodic a release some to detail discussed are our uncertainties Annual Company's certain may your news

for I call the now to comments. over will Shelly turn her

Shelly Ibach

My SleepIQ including acceleration Consumer in Good afternoon welcome smart of demand growth was exceptional consecutively double-digit to our to driving XX the last been and quarter. night. our has score call. response beds XXX revolutionary six quarters fourth

from in were earnings growth to in comp profit, including, which flows X% $X.X in and results per Our X with a XX% to cash $XXX record XX% growth in to XX% near XX% high $X.XX and differentiated sales billion end gain million. stores. operating consumer strategy innovation growth share our growth points net operating XXXX the net of expectations drove new a

resulted leverage, ensure customers vision relationships over investing on to efficiently. deploying demand, increasing drivers: consumer ambitious of sustainable three driving five a XX%. while five We’ve lifelong has with focusing years our CAGR EPS XX% performance and total in multiple relevance CAGR business capital our and profitable shareholder executed Building of including XX% year year broad consumer shareholder and of five total growth year return

company, customers, value communities. investments expect superior As shareholders. combined efficient long-term and remain returns business investing deliver And deliver our our for purpose-driven we with in committed near meaningful our teams advantage that to we initiatives will a and to for model continue and

of Our XXXX XXXX, – anticipate performance. $X.XX, XX% will our for over record increase driving EPS result performance we initiatives XXXX our in a

XXXX. our We continued in a start positive strong momentum with

catalysts are drivers. behind our Here the performance

driving innovations, are competitive five First, customer direct-to-consumer proprietary distribution. exclusive demand consumer we advantages, lifelong sleep relationships, integrated communications through longitudinal brand data, and

of solution the a We’ve the importance to sleep. beds, XXX smart quality sleep consumer awakened we’ve effortlessly with our to proven achieve provided and

each innovations data billion sleepers SleepIQ measurements over platform biometric and Our seamlessly delivers XX in These technology our integrated results on advancements behalf. our that inform night. act

continue to evolve a XXX pace keeps smart will highly bed We consumers with Number engaged that our brands. our Sleep at

XXX which this experience benefitting million add first ongoing by research, overall these in to sleep introduced Our informed advancements all and than customers well-being. software and sleep are customers’ wellness XXXX technology more value own SleepIQ and our sessions sleep who meaningful we updates

health to value sales. strategic important future revenue with daily The and referral reinforces customers’ our customers smart individualized it an engagement is retention note result customer repeat strengthened is our wellness. that ability our technology, be is to with sleep with lifelong Our SleepIQ insights. relationship brand, this and increased link personalized from through The and

challenges smart Last and solve the generation quality month innovation significant in proven next event consumer unveiled deliver XXX helped beds, sleep at the effortlessly largest sleep. CES, we our world, which of

the with were beds Smart of in the including Innovation during CES honored Best awards XX smart Home Our category.

bed smart heart in XXX SleepIQ introducing portfolio variability Circadian rate We insights that sleep second measurement. monthly new quarter the Rhythm reports, capabilities and wellness advanced with will include, begin our

smart In layers Sleep sleep XX% comfort sleep during beds balancing of is research, an addition, people. temperature Number our drier issue feature According and provide temperature new environment. proprietary to a technologies cool for to

bed Our and the new Sleep asleep next fall Number smart, people to creating climates. by is Climate micro designed XXX months asleep available smart within help faster twelve stay individualized

cooling been public deeper Center The for night, epidemic throughout adjusts working Disease and by health to Sleep sleep the three provide sleep. One more suffer of adequate the with have from the lack and restful bed and adults cycles declared warming a each natural sleepers sleep. U.S. Control. in side disorders

dedicated improving experiences. sleep As a are we purpose, with mission of individualizing to our company life by

body’s We more than on quality research features smart a of use sleepers like sessions, prevent have challenges ability analysis SleepIQ sleep their weight This sleep big are off Based XX can to proprietary Studies technology stave sleep deprivation. XXX minutes XXX matters. by quality gain, nearly and bed improve that routinely enhanced our cold productivity. each taking shown sleep including per night hours who year. even can a million more increase and on XX

sleep are honor new We quality of making the badge to committed for society.

science opportunity With sleep, to higher cardiovascular improve have life people’s we through recently with medicine. extensive Mayo entered to advance an quality Clinic we the the and collaboration sleep into significant

are data, world-class of science collaboration our efficacy poised smart is longitudinal This to sleep technology our unparalleled advantages sleep and our good to and value make of researchers, one the beds. the the knowledge to of health. and meaningful of competitive of advancements By our reinforces we a providing clinicians and illustration

brand strategy. and NFL Investing important in partnerships and nation's Mayo aspect amplify of number to organizations Clinic, is the extend proprietary our with an like the manner our a in hospital one

especially indicate our strong with NFL audience. metrics affinity brand broad Our

and began brand. to the qualified across our leaning traffic vertically business, to drive into and brand XXXX media highly leadership we fundamentals our our campaign strong increased third innovation integrated With of in quarter spending

was traffic six growth up We which prior back have demand XXXX, from this the double-digit last driven against of and successfully converted the including the double-digit for year. quarters half

engagement growth has media, demand been and Our double-digit key half drivers XXXX. integrated unit initiatives advancements demand our Since are than the of more which process driven digital selling by December, of growth. growth, into continued has including social,

We with unit increases XXXX. drive in from growth greater in and both expect our ARU a units to performance initiatives contribution

Moving model integrated be that benefits accelerating second our and and a business performance our investments continuous tightly to realizing to our innovation vertical it culture With exciting driver, and drives leverage. improvement, is from initiatives.

customer with enabling are multi-year delivering chain; efficiencies leverage implementing Business support our supply and automation advancing both innovation technology cost-advantaged gain priorities improved and margin expansion agile, and include, flexible, to network initiatives management. in logistics to strengthening These effectiveness; growth; quality total an experience. and

efficiently, $XXX years. We also advanced have deploying million flow multiple in nearly of years, $XXX past driver cash over performance is the which including third capital XXXX. record million over we a six generated Our operating

to deployment stock in investing top continue high where return we confidence, Sleep high appropriate meaningful capital priorities value. Our and in investing drivers; Number growth and remain: profit liquidity; see maintaining

has Our consumer in innovation profitability. strong a foundation strategy resulted for and growth

the We our integrated digital are in with excited company business wellness next begin purpose-driven as with at the model our an relevant competitive space vertical and chapter a of core. advantages a health journey brand, broadly and to expanded more

dedication highly engaged to for impact is society. meaningful Sleep Number you partners on to and team having which our Thank your experiences, individualizing improving a sleep talented lives by and

performance passion, superior and and record innovation, are shareholder courage Your value integrity, teamwork in financial creation. resulting

our and will financials more outlook. details share on David Now,

David Callen

advantages, in our several growth In XX% enabled our our in since the and EPS clean to sales compounded you, the face earnings growth Thank diluted competitive our We delivered X% target, the years Tenaciously performance. significantly of years long-term annual over four compounded financials, Shelly. sustainability our and share. us strengthening introducing of run business $X.XX net we've XXXX. annual per advanced

liquidity to growth retail, increased like agile evolved revolutionary drivers acquire to platforms. build our innovations, and invested our and technology capabilities. support enablers marketing We've our we've capital to support like optimized plans. while growth structure our And our methodically We've prioritizing spending

disciplined XXX to our capital point great of The millions double more weighted basis average lives years news: in return four we've These cost more drove our capital. improve. XX.X%, a on than invested increase got to decisions in

our basis long-term improvement operating growth, XXXX earnings Running diluted gross Leaning XX% increase share. mindset. near our growth, including into and and point performance margin, clean long-term XX% in not our XXXX profit net per sales drivers XX% growth a XXX in did enabled in change

expectations growth bottom-line end to the and at and higher our us accelerate allowed spending of Top on marketing. innovations

way for value good As is creation. shareholder demonstrate, this executing our results

When grew EPS compared year adjusted XXXX to XX%. QX and current our grew results, net XX% sales

grew press release reported Our that Please QX QX of tables shifted sales to for the XXXX $XX non-GAAP fourth X% quarter quarter million refer fourth reconciliation year. last details and grew the of deliveries into net EPS from X%.

the stores X year X points of growth across XXXX XX new states. all year We contributed full points. stores XXX with ended Our comps added while

million. XX store, and opened online per plus we new to X% year, During the sales average $X.X grew comp stores

revolutionary were up X% and the process units drove lift X% our retail while proprietary for innovations year. Our selling a ARU, in

Operational drove was the XXX higher absorbing costs improvement margin full expected end XX.X%. and in the a point final basis mile our This expectations, year at while lift to our rate year. delivery than of gross internal initiatives high tariffs during

to Favorable product gross in improved our mix, enabled experience funding margin gross XXXX. margin the and XXXX. top-line of costs rate growth elimination of operations throughout Outsized expansion initiatives strong and prior and additional growth customer year contributed transition

leading funding accelerated growth longer innovations life-changing to quarter. to XX% year, like will QX. new ratcheted smart example, is including R&D For in our XXX spending we beds for next growth introducing the This begin XX% we support the term of

basis net from increase and we P&L XX% than XXX also operating across profit expenses. in points absorbed incentive compensation, a million $XXX our of pressure medical more delivering claims, XXXX, the in legal higher While to

basis $XX XXXX double funded growth million reflects NOP a record more more and improvement from XX high-value XX% projects million. growth top-line capital this year-over-year. cash XX% operations XX% nearly and We point $XXX year in a of total This generated to our was to a

buy return double-digit $XXX million internal invested Sleep stock. realized also Number We we rate to on of the

our ratio Our operating to ending within X target of X.X planned. of times as EBITDAR X.X range is times leverage times

XXXX. momentum Performance continued has into

headwinds a while over income and $X EPS tax of record XXXX transition guidance of X EPS rate $X.XX higher estimated costs. XX% expected Our increase absorbing million of points earnings, represents growth from

full We the and business for long-term continue performance. year to run

and XXXX. Here is some expected color on shape performance drivers the of

to consumer XXXX. sentiment with expect similar year be this We

year. The to believe in However, consumer for half the Coronavirus distractions headlines has of recently. back prudent plan the some Presidential Olympics and blanketed election from the it's we

While we plans. closely immediate to handful continue don't contingency to supply with of exposures, China-based our build suppliers have work we

this become coming dynamic over the to clear expect We months. situation

year, X the fiscal growth XXXX the For expect including extra high-single-digit week. we top-line points from

drive expect in first the We from and sales in and comp XXXX as well and strongest to and are quarters. The as fourth new ARU initiatives expected through year-over-year growth stores. again growth our units earnings

Day Labor The shift and the fiscal calendar a easiest the compares quarter first quarter sales plus $XX two-year $XX benefit is up of will extra against week of the of approximately approximately fourth million. from million

of We causing gross initiatives points basis intend, advancement to to basis incremental of through our XXXX as again, deliver year. XXX XXXX. points basis top integrated year our spending the point of progress in deleverage margin to gain We accelerate R&D on expect the in for to continued XX we XX XX of XX the

With profit extra our $X.XX estimated invest to leverage right it's in to future the result the our good insights, time the to is year. modest data-driven a and expected Funding operating growth support week our clear drivers initiatives benefit for innovations. portion of

X headwinds tax rate. a XX% about points expect We year income estimated growth full from EPS of

first equity about This the $X million accounting, excess estimate benefits from full primarily in includes year tax quarter. of

We million X% generate on store approximately from expect capital expand cash $XXX to in to our XXXX. primarily approximately $XX portfolio, to to projects, in deploy and operations X% million

stock, see cash to as is The free expected Sleep balance there. we to meaningful flow Number invested be continue our of value in

innovations X.X expect EBITDAR. to there within times ROIC, Each choosing gets understand response the is XXX compromise leverage while of enthusiastic X what shows range consumer operating our needed high-teen to life-changing sleeper beds. want. when The times no deliver they smart to We consumers targeted our

proven year? adjust to They on XXX for higher Number We quality deliver value XXXX of raising their each of sleep behalf Sleep more to our feel and forward want the creation deeper, bar Who effortly to in the using investors. wouldn't data sleep. each quality actually the on bed customers to delivering again benefit behalf of look hours strong

open Sheila, clarifying point, at for this please line questions. the

Operator

with from [Operator first Bobby comes James. question Griffin Raymond Instructions] Our

open. is line Your

Bobby Griffin

Good a afternoon appreciate year. my good and good I And everybody. taking questions. you quarter a on Congrats

David Callen

Bobby. Hey,

Shelly Ibach

Great. Thanks, Bobby.

Bobby Griffin

you by that the contribution when costs? more I the the a offset just it talked is wanted So, because just think past, we've spending? guys one-time required, actual and mid-teens to maybe first changed, something question, take transition the business the underlying the are is is do you at whether business investments contribution of has industry, getting look high-level higher dynamics Or R&D about type business margin natural maybe the in that today, achieving the of

David Callen

in really long-term And billion Hey, we future night we bias investing the about clarity and have our and having we as a operate our it's with in Bobby, see. where we We've that innovations visibility our from from business. give the opportunities XX that highlighted our informing is biometric this and is every we measures behind. growth us should way be the spending are that journey having sleepers to what drivers great

growth profit be was for rate So, in slightly we're think the that in we into long-term that as these XX% the We XXXX operating less talking benefit. XXXX flow-through I will it about drivers flow-through. see lean

Bobby Griffin

we Are through And of the a introductions, on our standpoint helpful. exactly the thinking cadence them. that in we mind should new to guys you just in as anything models then, the products those? And we as the be roll should size about there out? help us floor, That's appreciate. new I the from is system, from of in year it these roll what gone for product think the keep SleepIQ the cadence app, is updates Okay.

Shelly Ibach

really we beds. about our XXX advancement are smart excited Bobby, Yes, of the

XXX for are you that smart transformative smart since These ago was As transitioned beds first absolutely company. made be this we've beds. recall, and will X.X our new it to we XXX that move advancement big all the quarters

XXXX. customers have technology comfort that beds that SleepIQ to the a and with we we too technology, and advanced and are from have go won advanced many both SleepIQ then, has every will also cooling. they advancements awards the technology at so in back revealed numerous time a CES features These all and to the make And who the

David Callen

quarter to you be out to in and roll XXXX. And Bobby, completed here about start I in on, tack then, the timing, think next just the planning asked we're QX

Bobby Griffin

Thank you. the first the back luck in I jump in appreciate the I'll detail. Good queue. quarter.

David Callen

Great.

Shelly Ibach

you. Thank

Operator

you. Thank

we will with Next hear Stifel. John from Baugh

line Your open. is

John Baugh

evening Thank great that transition in, XXXX. right on Is called referencing a cost, you. what QX $X Or you I start and product Good to specifically new the think Jump likewise, and there? out are congrats you launch? million.

David Callen

products. That's exactly right. That's related of new to the roll out our

Shelly Ibach

and Primarily in QX. QX

John Baugh

and think commentary How some and a experience was shifting the lot around we'll that's about with Labor Okay. Shelly, And had then, you've I of believe Day this. election do when you specifically, election there see impacts.

bit maybe possible So of you're could you walk QX what us advertising? through a election and is a sort the headwind how on anticipating little from looks spend

Shelly Ibach

Yes. love well year. we and now and both new our how smart is. right as brand are just the customers, through life-changing and Well, potential with move existing start received We are beds well momentum where our as customers sleep the our this I'll from how

we growth said, easiest excited quarters single-digit really our are and to with with we QX two-year the double-digit our extra as and in high So primarily as then full-year, QX of we contemplates the expect expect quarter growth guidance and $X.XX side strongest at on a look be David our of to seventh compare demand week. we be the the

yes, Day in five like Labor days And is September. later

So it rolls very late.

will made the impact quarters. on bit that are between two of have So when a little deliveries

year, long-term. full between for you'll the operate there and on focused quarters. a stay movement So see the We little full year the business the

election, this the distraction. Regarding consumer is a always

moves It's certain are navigate some really we're have the Yes, you how behaving areas. think local – pressure there From you could But can lot resistant they lots media agility are consumer get a make. thing, distracted becomes, into I we a around specific in how the to biggest that's John. of normally. perspective, things. to of and pretty

later that the quarter don't Is quarter we're But going consumer. the where know. that the to from fourth results? it's impact see Labor going little more I Day a and third distraction probably early in to

John Baugh

your some, mouth, put to of level not your you've so, in potentially. embedded impact in And words some but guidance

Shelly Ibach

Absolutely.

John Baugh

about we XX% was is in And was huge I comments it your the QX. the around starting in of which and and my last question President's a pace believe I maybe back-end out, David think then, Day, year just on are about it event

that went for quarter towards that something? a would my and of I or So, plus be, tracking you're presumption well event kind misread did XX%

Shelly Ibach

We you seventh you're consider our in not. the this the did No, growth. of quarter quarter And we're deep through Day. double-digit right, President's

John Baugh

good and you Thank luck.

Shelly Ibach

Thank you.

David Callen

John. Thanks,

Operator

Piper Our Sandler. from next with Peter question comes Keith

open. is line Your

Peter Keith

Hi. afternoon. Thanks good everyone. Congrats and from me

Shelly Ibach

Peter. Hi,

Peter Keith

question. John's a Maybe just follow-on

the did you So, it QX, to XXXX. growth last was it mid-to-high single-digit and outlook increased spoke outlook, high the modestly sales was for in single-digit time

small a interesting but change, one. it's an So

behind to that's how anything you there start strong year beyond reshaped is think that So maybe about the XXXX? the

Shelly Ibach

XXXX. But I track terrific that quarter, in to is I constantly we integrated are what and been. Peter, And able our have the advancing has a our we as would matters continue here from advance these and performance. And each in least growth and units. to had at began carried really to most our have high are and say, we in them. December, being in realize, in And progress we of our Yes, and are half record initiatives have we would say, our quarter that we December, we had through importantly, initiatives initiatives year as sustainability continued long-term acceleration confidence the to QX of fourth

Peter Keith

some unit of And had strengthening growth around Okay. trends. you the mentioned

than up – units? mix that pick last would to in the remarks, is growth help cause change ARU just Could with would years. something this conversely, stronger And go there for shift there growth us, slowing of shape you is with shift or you the that XXXX unit behind be a kind to so, the commented is maybe from just had stronger of which ARU that couple be back prepared unit to growth,

Shelly Ibach

response the after I first double-digit Well, to since strong about of us all absolutely acquisition July from again in to growth have. illustrating we with media for brand and the fourth that what that be customer and a the consumers metrics fundamentals our accelerating customer great from spend communication say both we've the in quarter, and growth talking in strong begin it's our get addition our strong and think been here are to the is unit to that safe able result quarter of so on would innovation retention more we the

business over both time. benefit is strategy growth our from ARU model designed And unit to and

continue in on We basis are had is. put with innovations selling process. and QX up we stronger putting growth as said to we've in obviously our spend expected annual against metrics ARU materialize media it now we that unit growth these an and to growth we and and this additional our from QX, to But and

Peter Keith

very leave helpful. interesting, very That's it there. Okay. I'll you Thank much.

Shelly Ibach

Thanks.

Dave Schwantes

do for question you another Operator, have us?

Operator

delay. do. I apologize the I Yes, for

Seth from comes question Basham with Wedbush. next Our

You proceed. may

Seth Basham

Thanks afternoon. a lot and good

David Callen

Seth. Hey,

Shelly Ibach

Hi Seth.

Seth Basham

I could high-single-digit be missed if comp part you standpoint. That helpful. understand from help for but would what's of us a sales implied the call, your growth in XXXX

David Callen

Yes.

an in contribution You between the new year. about and should store split expect even comp

Seth Basham

it. Got

Okay.

in that increase you high-single-digit, than embedded are and So ARU. expecting units to more

the units? to by driven So, therefore, going is thinking be entire comp

David Callen

somewhat growth ARU, in both expect expect we from XXXX. We do than but contribution higher unit

Seth Basham

Okay.

if benefits And mix from ARU see any going I to am think forward, think I lastly, not about or you whether pricing we attachments relative following or then, going or to opportunities are XXXX? the dimensionalize can you. you

Shelly Ibach

at first pricing, that at able exclusive to this and great unit warrants drive of overall, see innovation. have all, and can we the strategy clearly distribution power our are pricing model question. ARU growth time, is proprietary certainly you our well. Seth, business look you Yes, without as we with same And When – a really

had growth. expect great lapped fourth leads our a our specifically, attach this ARU XXXX see how process, where quarter, opportunity. and process and do mix. both growth, example in selling other initiatives, the we and think continued is specifically of and factors of our We And integrate I quarter ARU any to is an from pricing yes, that we innovations, our store mix. another we attach the fourth And drove in we And fully that X% outcome

line will We are how that our and excited about new contribute.

Seth Basham

will Got line And existing the higher the at it. new prices come than line?

Shelly Ibach

We absolutely of line new haven't But to specifically attaching favor it's on shared our the focus and yet. mix. the pricing

able also So performance at level. to that each sell overall and repeat a to customer our and more we're drive higher

Seth Basham

go to adjustable topic, your this question is Got get on of basis it. is mattress can't a is, investors what on from attachment we last it And really you comments share Would lastly because that that sales, levels these improvements much frequently years. that some concern care relating from strong your any higher right rate now there topic? to couple the over really, of a after

Shelly Ibach

drive it's this line will with a you to ours. we to is it Obviously, ours and years that able has being strength to important the yes. and sight quarter will see an growth growth great contributor area. in attach of in of we continue we expect our with of continue continue our a to have FlexFit future. in ARU Yes, to now I share This for X% been be many strength basis. It the fourth

Seth Basham

Thanks a luck. good and lot

Shelly Ibach

Thank you.

David Callen

lot. a Thanks

Shelly Ibach

Operator, next question.

Dave Schwantes

Sheila, there? operator. I our It are having Hello, some you difficulties seems with technical we apologize. are

with please on Just get as Q&A. for we'll this continue minute and one the we the resolved hold line

Operator

I apologize do operator. This is again, for delay. the Once the

question. for ready next are our We

next Capital Markets. will come Our with question from KeyBanc Thomas Bradley

ahead. go may You

Andrew Efimof

and look a thinking like you're few quarters given that A Clearly, Hey, been a wondering it Tempur-Pedic? for good repartnership doesn't lot is basically with getting Mattress question Brad. are partnership XQ about impact and on your you in But this Firm's could on issue we the how is competition this the we've how were over afternoon, the recently Andrew is performance. strong viewing significant your business. how next

Shelly Ibach

Shelly. Andrew, this Yes, is

our brand drive own And been multiple to and other all that we bring into bed. quarter growth our XXX we've our double-digit to ability of We and that strength consumers great is initiatives over see in with our associated driving Number our we're quarters, in the continue confidence Sleep have performance. – seventh smart have

Andrew Efimof

XXXX wondered how question guess costs And what Understood. input last and these trends margin great. to year? Great, my for the was outlook is, expect your outlook the for impact you here for I

David Callen

that Andrew, got in favorability push. are of it's against commodity some labor we so and do things forth. We've some our going kind some like costs. our some But us, of have of a

expect we overall. be to impact So, it basically flat

Andrew Efimof

That's for That's all helpful. me. thanks. Great, right. All

David Callen

Okay. Thanks, Andrew.

but am almost like to afraid I It ask, Sheila, you we're us? are Okay, with sounds trouble. having

Operator

This the you operator. ready is for the next Are question?

David Callen

thanks. Yes,

Operator

Thank you. Atul from It comes UBS. with Maheswari

go You may ahead.

Atul Maheswari

Good evening. question. a lot Thanks my for taking

is given So on unit the ARU strong further. like growth basis. units my question that thus units appear the far in But then and improved also should and probably it fourth a XXXX growth quarter, would in same-store it on decline ramp that has looks

trying your respect am what with to understand XXXX better I So thus far growth? that's has this in changed unit driving strategy improved just to

David Callen

that because fairly Atul. I'll handle Yes. a one. one, it's Hey easy

think remember we your XXXX that – QX of deliveries analysis. I up $XX messing You your and into million need had kind that's to in of that from QX shifted

XXXX numbers was growth units. adjusted against adjusted half QX that is the and in from of Our XX%

Atul Maheswari

versus than Okay, it's helpful. And a you any gap stores? there mall Thank in And worth very that's in calling any wider cabinets And as follow-up, out? you. how quick is that been trends meaningful Thank the is performance your then, past? so are non-mall much.

Shelly Ibach

of progress malls with non-malls. Yes, in out. nothing We've now meaningful stores strategy XX% portfolio of to to our our outside with over continued call

David Callen

strong see and Yes, generally speaking, in locations. mall like both non-mall our that are performance the we malls and we we in,

Atul Maheswari

Thanks.

Operator

of Our you. from Bank with next Thank America. Curtis is Nagle question Instructions] [Operator

ahead. go may You

Curtis Nagle

much. Yes. Thanks very

the X%. case breakout wanted of and stores go sales extra math growth. didn't, to that imply from about high comp comps think even. And heard and I of to do my on be and if and said correctly the you store Wouldn't Or Just If growth of not total have back is question that's X.X%, contribution growth the wrong? the I I week I the would is you maybe sales X.X% XX%, single-digits? Seth's that

David Callen

highlighted So, was the to a providing $XX We about from high-single-digit comp am a new to look, impact. we The we are with from the equal extra going X.X that are two about week. top-line by is stores. million point. guiding split that math points about contribution directionally not that I and growth contribution

Curtis Nagle

you extra if EPS the get And clarify much Okay. week? benefit could from how you just

David Callen

call, I $X.XX my about As benefit expected on from I highlighted the extra comments that week.

intending invest business that into spending our are to accelerated back we in However, R&D. the the with

Curtis Nagle

Thanks Okay. very much.

David Callen

All right.

bet. You

Operator

now the closing conference turn company I you. back to the over remarks. for will Thank

Dave Schwantes

Thank our joining you first to April. look us big. you We for XXXX Sleep and performance dream discussing forward with today. quarter well in

Operator

you. conference. Thank today’s conclude participating. does That you for Thank

this may You at disconnect time.