Sleep Number (SNBR) 8-K Results of Operations and Financial Condition

Exhibit 99.2

October 2011

Sleep Number . . .

Transforming a large, undifferentiated industry

2

Forward Looking Statements

Statements used in this news release relating to future plans, events, financial results or performance
are forward-looking statements subject to certain risks and uncertainties including, among others,
such factors as current general and industry economic trends; consumer confidence; the
effectiveness of our marketing and sales programs, including advertising and promotional efforts;
consumer acceptance of our products, product quality and brand image; our ability to continue to
improve our product line and product quality; warranty obligations; availability of attractive and cost-
effective consumer credit options; execution of our retail store distribution strategy; rising commodity
costs and other inflationary pressures; our dependence on significant suppliers, including several
sole-source suppliers and the vulnerability of suppliers to recessionary pressures; industry
competition; risks of pending and potentially unforeseen litigation; increasing government
regulations; the adequacy of our management information systems to meet the evolving needs of our
business and evolving regulatory standards; our ability to attract and retain key employees; and
uncertainties arising from global events, such as terrorist attacks or a pandemic outbreak, or the
threat of such events. Additional information concerning these and other risks and uncertainties is
contained in our filings with the SEC, including our Annual Report on Form 10-K, and other periodic
reports filed with the SEC. The company has no obligation to publicly update or revise any of the
forward-looking statements in this presentation.

4

•30 years consistent industry
growth, reset in ’08/’09 . . .
6% CAGR

•Premium (>$1,000) outpacing total
industry growth

•Specialty also outpacing with
consumer trend toward better sleep

•Significant growth opportunity in
adjustable “air” segment

•SCSS = 5% market share in $’s;
lead markets 2-3X

Innerspring

Foam

1Total Wholesale Sales based on ISPA 2010 Annual Report and ISPA Oct. 2011
Forecast. Premium percentages for 2012 are company estimates.

Competing in the industry sweet spot

5

Unique, vertically-integrated business model

Differentiated end-to-end brand experience

•374 stores nationwide, supported by
sleepnumber.com and call center

•Knowledgeable, tenured Sleep Experts and “white
glove” home delivery and service

•Company-controlled customer touchpoints provide
direct insight into product innovation and R&D

Flexible, cash advantaged supply chain

•Two plants (UT & SC), 10 hubs and 127 spokes

support national distribution

•Build-to-order, JIT inventory translates to minimal

inventory (15 turns in manufacturing)

•Negative 30-day cash conversion cycle

- Cash receipt at time of order

- Payables cycle tied to time of manufacture

6

Proprietary products . . . real consumer benefits

Individualized comfort at the touch of a button

•9 out of 10 couples prefer different mattress firmness

•Adjustable comfort on both sides…only with Sleep Number

Scientifically proven benefits

•3rd party studies - improved sleep quality, reduced pain

•Superior consumer satisfaction - 20 pts higher

than traditional mattresses

Broad product offering at competitive value

•Good/Better/Best mattresses, full range of bedding & bases

•Pricing starts at $699 (Queen Mattress)

Sleep Number Bed Series & Models (Queen Sets)

Classic Series

c2

$999

c3

$1,299

c4

$1,599

Performance Series

p5

$2,099

p6

$2,599

p7

$2,899

Innovation Series

i8

$3,199

i10

$4,699

7

Product

Marketing

Target

Customer

Distribution

Sustainable
Competitive
Advantages

Expanding consumer base through integrated
consumer-focused strategy

8

The product opportunity

•Value:Addressed price confusion in 2009;
currently emphasizing accessibility (e.g.,
queen mattresses starting @ $699)

•Core promise:Proprietary personalized
comfort for individuals and couples

–Sleep Number brand

–“DualAir technology inside”

–New “signature look”

•Innovation: Support brand development and
re-engage owners

–Enhance - e.g., line refresh 2011 Q2

–Extend - e.g., AirFit pillow 2011 Q4

–Evolve - e.g., R&D investment

•Margin:Goal to continue increasing gross
margin over next 3 years

–Sales/transaction - e.g., bedding, foundations

–Pricing - e.g., +4% annualized taken in 2011

9

Media efficiency performance

Broad Reach
- National

Broad Reach
- Local

Digital

Media spend by type

Direct
Response

•Sleep Number:Recently consolidated
brand in 2010

•Creative & Media:Evolving to reach a
broader target customer, addressing
proprietary benefits - including
advantaged store experience

–Local

–National

•Value & Urgency:Media and
merchandising targeted to mattress
buying consumer holidays

•Sustainable Expansion:Integrated
sales and marketing; leveraging selling
expense now - preparing to leverage
media longer-term

The marketing opportunity

10

New Store Economics

Build out costs (000’s)~$320

Inventory (000’s)$15

Payback12-18 months

First year sales target (000’s)>$1,500

The distribution opportunity

•Company-controlled channel growth

–Average sales/store leverage

–Store expansion starts in 2012; 5-7% net
expansion, >500 stores by 2015

•Market-based development for
profitable expansion

–Accelerate sustainable market share

–Compete locally

•Customer experience leadership &
innovation

–New formats . . . non-mall stores

–New designs . . . experiential

–Advanced selling . . . selection, training,
tenure

11

Today, every $100,000
increase in average
sales per store

•$38 million sales (+1 bed/store/week)

•~ $11 million operating profit

•~ $0.13 incremental EPS

Store growth adds incremental upside potential

12

Integrated marketing and retail demonstrate path
to increase market share

13

1Q3-11 represents trailing 12 months

Early stage growth company . . . revenue and profit

14

	20091	20112	Potential by 2015	Drivers
Gross margin	60%	63%	#2-3 pts	•Supply chain leverage & efficiencies •Product innovation & pricing
Selling & Marketing %	50%	43%	$2-5 pts	•Store base leverage •Media mix & efficiency
G&A/other %	11%	9%	$0-1 pts	•Focus on core business
Operating margin	(1%)	12%	> 15%

1Trailing 12 months ended third quarter on a pro forma basis

2Trailing 12 months ended third quarter

The profit margin opportunity

16

Investment Summary . . . why now?

•SCSS emerged from 2008-2009 economic crisis a stronger company,
prepared for an uncertain economy

–Consolidated brand

–Target customer expansion

–Breakeven point lowered

–Flexibility with short lead-time media and promotions

–Balance sheet strength - $136 million cash & securities, no debt

–Management team experience during the crisis and growth

•A unique and highly profitable growth opportunity

–Sustained revenue/share growth

–Continued profit leverage

–Strong cash flow

–Early stage development = opportune time

17

Appendix

18

Name	Age	Title	# yrs w/ SCSS	Previous experience
Bill McLaughlin	55	President & CEO	11	PepsiCo/Frito-Lay
Shelly Ibach	52	COO	4	Macy’s, Target Corporation
Kathy Roedel	51	EVP, Chief Technology & Services	6	GE Health Care
Wendy Schoppert	44	EVP & CFO	6	U.S. Bank, America West, Northwest, AMR
Mark Kimball	53	SVP & General Counsel	12	Oppenheimer, Wolff & Donnelly
Karen Richard	41	SVP, Human Capital	15	TCF Financial Corp

Experienced Management Team

19

Unaided Brand Awareness

Unaided Store Awareness

Brand

Store

#1 Growth Opportunity . . .
Awareness & Consideration