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Sleep Number (SNBR) to Report Q1 Earnings: What's in Store?

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Sleep Number Corporation (SNBR - Free Report) is scheduled to report first-quarter fiscal 2021 results on Apr 21, after market close.

In the last reported quarter, the company’s sales and earnings beat the Zacks Consensus Estimate by 1.7% and 43.1%, and increased 28.7% and 167% on a year-over-year basis, respectively. Markedly, the company beat earnings expectations in each of the last nine quarters, with the average being 59.8%. The growth was driven by the company’s sleep leadership, brand relevance and ongoing investments in sleep science-based innovation and digital technologies.

Trend in Estimate Revision

For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has moved 42.1% upward to $1.79 over the past 60 days. The estimated figure indicates an increase of 31.6% from $1.36 per share reported in the year-ago quarter. The consensus mark for revenues is pegged at $574.4 million, suggesting 21.6% growth from the year-ago reported figure of $472.6 million.

Factors to Consider

The company’s earnings and revenues for the fiscal first quarter are expected to have witnessed improvements on a year-over-year basis, courtesy of strong growth initiatives and unprecedented consumer demand for the company’s life-changing 360 smart beds.

During the fourth-quarter fiscal 2020 earnings call, the company anticipated an improvement in first-quarter 2021 results.

The company — a market leader in sleep innovation — is likely to have witnessed accelerated demand in the quarter to be reported owing to robust performance of exceptionally innovative 360 smart beds. Its new i and m series smart beds along with SleepIQ technology are, major growth drivers. In sync with increased consumer adoption of digital products and services, Sleep Number’s digital ecosystem has been enabling it to efficiently acquire new customers and build lifelong relationships.

For the reported quarter, the company is focused on enhancing its digital capabilities that enable the business to help and manage inventory and support a more customer-focused supply chain. The digital advancement has broadened Sleep Number’s competitive advantages and will also ensure strong growth in the upcoming quarters.

The Zacks Consensus Estimate for Stores Open at first quarter-end is pegged at 613, indicating 1.8% growth from the last reported quarter. The consensus estimate for average sales per store is pegged at $2,986 million, suggesting a decline of 2.2% sequentially.

Although the economy has been recovering from COVID-19 impacts, retailers are still grappling with the effects of the same. Disruption across the global supply chain owing to the pandemic remains a cause of concern.

Sleep Number Corporation Price and EPS Surprise

 

What Our Model Indicates

Our proven model does not conclusively predict an earnings beat for Sleep Number this time around. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as you will see below.

Earnings ESP: Earnings ESP for Sleep Number is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently has a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combination

Here are some companies in the Zacks Consumer Discretionary sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.

SeaWorld Entertainment, Inc. has an Earnings ESP of +8.8% and a Zacks Rank #2.

WillScot Mobile Mini Holdings Corp. (WSC - Free Report) has an Earnings ESP of +19.82% and a Zacks Rank #3.

Caesars Entertainment, Inc. (CZR - Free Report) has an Earnings ESP of + 9.32% and a Zacks Rank #3.

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WillScot Mobile Mini Holdings Corp. (WSC) - free report >>

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Sleep Number Corporation (SNBR) - free report >>

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