Why the stock of sleep numbers has dropped today
In a broadly red day for the stock markets, the retailer reads Sleep number (NASDAQ: SNBR) has fallen much more than the whole S&P 500 index. Sleep Number closed the session about 13% of the day.
Sleep Number wasn’t alone in bed today, however. Another specialist mattress manufacturer, Casper Sleep (NYSE: CSPR), also fell more than 9%. And overall, the markets have driven down many stocks that have had outsized returns in recent months. Sleep Number shares are still up around 170% in 12 months and over 50% this year.
Sleep Number retail showroom. Image source: sleep number.
Beds and mattresses have sold well throughout the pandemic. And Sleep Number offers a high-tech sleep solution with its adjustable air chamber mattresses. Consumers focused on home shopping much of last year, but Sleep Number believes the momentum will continue.
Its fourth quarter 2020 net sales increased 29% year on year, and it expects diluted earnings per share to increase 30% for the year 2021 compared to 2020, excluding of an additional 53rd week. If the company hits that profit bar, it will be double the earnings per share over the past two years.
Sometimes the market corrects itself, and sometimes it turns between sectors. After a strong advance in the stock, this seems to be what happened today. Long-term investors should be able to fall asleep well despite this type of volatility as long as the business continues to perform as expected.
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