Sleep Number (Sleep Number) Operating Income : $29 Mil (TTM As of Mar. 2024)

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What is Sleep Number Operating Income?

Sleep Number's Operating Income for the three months ended in Mar. 2024 was $16 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Mar. 2024 was $29 Mil.

Warning Sign:

Sleep Number Corp has recorded a loss in operating income at least once over the past 3 years.

Operating Margin % is calculated as Operating Income divided by its Revenue. Sleep Number's Operating Income for the three months ended in Mar. 2024 was $16 Mil. Sleep Number's Revenue for the three months ended in Mar. 2024 was $470 Mil. Therefore, Sleep Number's Operating Margin % for the quarter that ended in Mar. 2024 was 3.43%.

Warning Sign:

Sleep Number Corp operating margin has been in a 5-year decline. The average rate of decline per year is -19.7%.

Sleep Number's 5-Year average Growth Rate for Operating Margin % was -19.70% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Sleep Number's annualized ROC % for the quarter that ended in Mar. 2024 was 4.81%. Sleep Number's annualized ROC (Joel Greenblatt) % for the quarter that ended in Mar. 2024 was 3.92%.

Sleep Number Operating Income Historical Data

The historical data trend for Sleep Number's Operating Income can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Sleep Number Operating Income Chart

Sleep Number Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Operating Income

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112.10

184.90

193.54

67.88

38.67

Sleep Number Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Operating Income	Get a 7-Day Free Trial															25.93	11.23	5.39	-3.88	16.14

Sleep Number Operating Income Calculation

Operating Income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Operating Income for the trailing twelve months (TTM) ended in Mar. 2024 adds up the quarterly data reported by the company within the most recent 12 months, which was $29 Mil.

Sleep Number (NAS:SNBR) Operating Income Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

Sleep Number's annualized ROC % for the quarter that ended in Mar. 2024 is calculated as:

	ROC % (Q: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	64.568 * ( 1 - -10.73% )	/	( (1505.386	+	1469.236)	/ 2 )
=	71.4961464	/	1487.311
=	4.81 %

where

	Invested Capital		(Q: Dec. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	950.88	-	175.437	-	( 2.539	-	max(0, 936.071	-	206.128	+	2.539	))
=	1505.386

	Invested Capital		(Q: Mar. 2024 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	908.473	-	164.38	-	( 2.068	-	max(0, 906.192	-	181.049	+	2.068	))
=	1469.236

Note: The Operating Income data used here is four times the quarterly (Mar. 2024) data.

2. Joel Greenblatt's definition of Return on Capital:

Sleep Number's annualized ROC (Joel Greenblatt) % for the quarter that ended in Mar. 2024 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Mar. 2024 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Dec. 2023		Q: Mar. 2024
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	22.168	/	( ( (574.914 + max(-111.222, 0))	+	(554.979 + max(-122.411, 0)) )	/	2 )
=	22.168	/	( ( 574.914	+	554.979 )	/	2 )
=	22.168	/	564.9465
=	3.92 %

where Working Capital is:

	Working Capital		(Q: Dec. 2023 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(26.859	+	115.433	+	61.297)	-	(175.437	+	49.143	+	90.231)
=	-111.222

	Working Capital		(Q: Mar. 2024 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(21.833	+	100.904	+	56.244)	-	(164.38	+	50.262	+	86.75)
=	-122.411

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Mar. 2024) EBIT data.

3. Operating Income is also linked to Operating Margin %:

Sleep Number's Operating Margin % for the quarter that ended in Mar. 2024 is calculated as:

Operating Margin %	=	Operating Income (Q: Mar. 2024 )	/	Revenue (Q: Mar. 2024 )
	=	16.142	/	470.449
	=	3.43 %

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Operating Income growth rate using Operating Income per share data.

Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.

Sleep Number Operating Income Related Terms

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Sleep Number (Sleep Number) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Furnishings, Fixtures & Appliances » Sleep Number Corp (NAS:SNBR) » Definitions » Operating Income

Comparable Companies

Traded in Other Exchanges

SL2:Germany

Address

1001 Third Avenue South, Minneapolis, MN, USA, 55404

Website

https://www.sleepnumber.com

Sleep Number Corp. offers individualized mattresses and sleep solutions. Consumers can customize Sleep Number bedding to suit their comforts. The company utilizes algorithms and biometric data for customizations. Revenue is generated through marketing and selling bedding through two distribution channels: company-controlled, including direct-to-consumer retail and online sales; and wholesale, which sells through selected wholesale and retail customers. Almost all revenue comes from company-controlled retail sales. Sleep Number Corp. sells its products throughout the United States.

Executives

Samuel R Hellfeld	officer: SVP Chief Legal & Risk Officer	1001 THIRD AVENUE SOUTH, MINNEAPOLIS MN 55404
Francis K Lee	officer: EVP & CFO	1001 THIRD AVENUE SOUTH, MINNEAPOLIS MN 55404
Brenda J Lauderback	director	IRWIN FINANCIAL CORPORATION, 500 WASHINGTON STREET, COLUMBUS IN 47201
Julie Howard	director	MANPOWERGROUP INC., 100 MANPOWER PLACE, MILWAUKEE WI 53212
Michael J Harrison	director	200 DOMAIN DRIVE, STRATHAM NH 03885
Joel Joseph Laing	officer: Treasurer & CAO	1001 THIRD AVENUE SOUTH, MINNEAPOLIS MN 55404
Angel L Mendez	director	C/O SLEEP NUMBER CORPORATION, 1001 THIRD AVENUE SOUTH, MINNEAPOLIS MN 55404
Phillip Eyler	director	C/O HARMAN INTERNATIONAL INDUSTRIES, INC, 400 ATLANTIC STREET, STAMFORD CT 06901
Kevin Kennedy Brown	officer: SVP and CMO	9800 59TH AVENUE NORTH, MINNEAPOLIS MN 55442
Christopher D Krusmark	officer: SVP & Chief H.R. Officer	1001 THIRD AVENUE SOUTH, MINNEAPOLIS MN 55404
Daniel Alegre	director	9800 59TH AVENUE NORTH, MINNEAPOLIS MN 55317
Jean Michel Valette	director	28 MAPLE AVE, KENTFIELD CT 06897
Melissa Barra	officer: SVP, Chief Strategy & CRO	9800 59TH AVENUE NORTH, MINNEAPOLIS MN 55442
Shelly Radue Ibach	officer: Senior VP - U.S. Retail Sales	6105 TRENTON LANE NORTH, MINNEAPOLIS MN 55442
Robert Joseph Poirier	officer: VP, CAO	1001 THIRD AVENUE SOUTH, MINNEAPOLIS MN 55442