Sleep Number Corporation (NASDAQ:SNBR) Q3 2019 Earnings Conference Call Transcript

Oct 15, 2019 • 05:00 pm ET

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Sleep Number Corporation (NASDAQ:SNBR) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Welcome to the Sleep Number Q3 2019 Earnings Conference Call. All lines have been placed in a listen-only mode until the question-and-answer session. Today's call is being recorded, if you have any objections you may disconnect at this time. I would like to introduce Dave Schwantes, Vice President of Finance and Investor Relations. Thank you. You may begin.

Executive
David W. Schwantes

Good afternoon and welcome to the Sleep Number Corporation's Third Quarter 2019 Earnings Conference Call. Thank you for joining us.

I am Dave Schwantes, Vice President of Finance and Investor Relations. With me today are Shelly Ibach, our President and CEO, and David Callen, our CFO. This telephone conference is being recorded and will be available on our website at sleepnumber.com. Please refer to the details in our news release to access the replay. Please also refer to our news release for a reconciliation of certain non-GAAP financial measures and supplemental financial information included in the news release or that may be discussed on this call.

The primary purpose of this call is to discuss the results of the fiscal period just ended. However, our commentary and responses to your questions may include certain forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties outlined in our earnings news release and discussed in some detail in our Annual Report on Form 10-K and other periodic filings with the SEC. The Company's actual future results may vary materially.

I will now turn the call over to Shelly for her comments.

Executive
Shelly R. Ibach

Good afternoon and thank you for joining our third quarter earnings call. My SleepIQ score was 86 last night. As the leader in sleep innovations our unique and differentiated 360 smart bed experience is clearly resonating with consumers. We have delivered double-digit demand growth since completing our transition to all 360 smart beds in mid 2018.

As expected this momentum continued in the third quarter as we advanced our initiatives and lapped the double-digit sales order growth from the prior year. Third quarter results against prior year included; record net sales of $475 million, up 14% with a 10% comp. Operating income of $39 million up 55% and earnings per share of $0.94, up 81%.

Year-to-date results included net sales growth of 12% with an 8% comp. Operating income up 46%, EPS up 63% and return on invested capital for the past 12 months of 18.4%, up 470 basis points versus a year ago. This record performance is the outcome of our transformation. We are where we expected to be and are doing what we said we would do.

Our multi-year initiatives have resulted in double-digit earnings per share growth since 2015. We are excited to have nearly completed the first part of our strategic journey, which enables our future growth as we become the hub for consumers health and wellness. With the performance strength across our business, we have increased our full-year EPS guidance to a range of $2.45 to $2.75.

My comments will focus on sales orders, which