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Bear of the Day: Sleep Number (SNBR)

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The COVID-induced work-from-home (WFH) revolution set about a sequence of events that shifted the behavior of consumers around the world. There was a huge increase in purchases related to making your home life more comfortable. It helped provide a tailwind to companies that sold furniture of all types. That huge influx of money has come and gone. Now, furniture retailers are faced with a new normal, and comps which are going to be impossible to meet.

One company struggling to keep up with a high bar is today’s Bear of the Day, Sleep Number (SNBR - Free Report) . Sleep Number Corporation offers sleep solutions and services in the United States. The company designs, manufactures, markets, retails, and services beds, pillows, sheets, and other bedding products under the Sleep Number name. It also provides adjustable bases under the FlextFit, and smart beds under the Sleep Number 360 brands. The company sells its products directly to consumers through retail, online, phone, and chat as well as through its e-commerce activities. As of January 2, 2022, it operated approximately 648 retail stores in 50 states.

The stock is currently a Zacks Rank #5 (Strong Sell). The reason for the unfavorable rank is the series of negative earnings estimate revisions coming from analysts. Over the last thirty days alone, four analysts have slashed their earnings estimates for the current year and next year. The bearish moves have dropped current year Zacks Consensus Estimates from $3.49 to $1.70 while next year’s number is off from $4.20 to $1.85.

The Furniture industry is in the Bottom 35% of our Zacks Industry Rank. There are a couple of stocks within the industry that are in the good graces of our Zacks Industry Rank. These include Zacks Rank #1 (Strong Buy) Virco Manufacturing (VIRC) and Zacks Rank #2 (Buy) Flexsteel Industries (FLXS - Free Report) .


 


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