Sleep Number issues 'going concern' warning amid turnaround efforts
Sleep Number Corp.’s debt and liquidity issues may impact its ability to continue operations without “material improvement” in its performance.
The mattress and bedding retailer said in a financial filing that it has “substantial doubt” about its ability to continue as a going concern. The filing came the same day that Sleep Number reported that its 2025 sales fell 16% to $1.4 billion, driven by driven by ongoing industry pressure and lower store traffic. The retailer’s net loss widened of $132 million compared with a net loss of $20 million in the prior year.
In the filing, Sleep Number said that without a “material improvement” in its performance, it will will need to obtain additional capital to enable it to fund its operations, execute its business and turnaround strategies, service and repay its indebtedness or to fund other liquidity needs.
“If the company is unable to successfully execute its mitigation plan or obtain sufficient financial resources, its business, results of operations, financial condition, and cash flows could be materially and adversely affected and it could be forced to terminate, significantly curtail or cease our operations, pursue strategic alternatives or commence a case under the U.S. Bankruptcy Code,” the company stated.
Sleep Number has been working to turnaround its business and return to profitable growth under the leadership of Linda Findley, who took the reins as CEO in April 2025. The company has cut $185 million in annualized costs and earmarked another $50 million to cut. It also has initiated a capital structure review.
On Thursday, Sleep Number announced its largest product reset in almost a decade with the introduction of five “innovative” beds designed to deliver a luxury experience at a more approachable price, the company said.
"Even with the strength of our product and marketing strategies, the negative industry impact at the start of the year plus the clearance of our existing products had an outsized impact on our liquidity,” Findlay said in the fourth-quarter earnings release. “We are implementing a plan to address our liquidity and capital strategy as we move towards topline growth in the second half of the year."
Sleep Number mattresses, bases, bedding and furniture are available exclusively at its 600 stores nationwide and online.