SNBR - Earnings call transcript Q4 2021 | Sleep Number Corporation

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Operator

Welcome to Sleep Number's Q4 and Full-Year 2021 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. [Operator Instructions] I would like to introduce Dave Schwantes, Vice President of Finance and Investor Relations. Thank you.

begin. may You

David Schwantes

Investor sleepnumber.com. welcome Please Callen, XXXX details also and to to our financial will us. the just this fiscal at Sleep of Corporation a call. the or telephone financial and being Finance refer Number am the our Shelly access to may is today Good our conference Chief results Ibach, conference to is release certain of call available Financial the news call. be supplemental of that for website quarter this President and of President earnings release The to Schwantes, information and joining and be With Thank news fourth primary on me our Dave are in David the ended. afternoon, period CEO; on discuss Vice the included release replay. Relations. purpose non-GAAP our refer you Please recorded I and This for reconciliation in measures news discussed Officer.

over in earnings forward-looking release and and commentary certain may uncertainties XX-K Shelly include detail of results The call filings are These Company's now for in in may a will and actual her forward-looking your statements outlined our vary questions our responses subject on our discussed risks to and to However, some to statements. number annual news with report the Form turn future periodic comments. other the SEC. materially. I

Shelly Ibach

record quarter double-digit pandemic supply XXXX XXXX, and earnings be XXX consecutive disruptions. score induced XX In was to to growth our the with Good The SleepIQ chain even remain third soon as are supply still conditions. challenging afternoon, drove the last beds our to they semiconductor and year-end near-term fourth the third fulfill global earnings deliveries for year our we My The quarter. did proved call. year welcome smart night. component operating semiconductor suppliers enough of adapting ultimately capacity. is overwhelming not planned as global in Electronic constrained difficult a the as supplies receive most demand demand enter

constraints life-changing the retaining disruptive demand. the for navigate beds innovations. our smart attributes reflects generating our we our of we Strong have As agile wellness this demand from customers in been and industry,

share of evidenced our two by for compared health to As adjusted Highlights the quality the has society the past cash never to performance wellbeing of XXXX invested week improve or of sales Xx been net from through than urgent years, per events XX% to $X.X results our of more of capital. a the $XXX more return earnings sleep record XXrd purpose include and operations our higher important. XXXX as $X.XX, XX% was growth nearly increased billion, rose cost and capital to on XX% our to million

nearly we have frame. five XX%, time of past Over an years, the the EPS XX% sales delivered Xx compounded average CAGR that over

We EBITDA CAGR further generated five-year business. superior a cash-generating demonstrating ability also this the of of XX%

supply driving elaborate me challenges demand to are let growth. that chain navigate us on Now capabilities while enabling the

respond and of conditions utilizing are integrated demand. efforts dynamic fulfillment. to business and and visibility, communication Digitization inventory anticipate are real-time model numerous levers sustained vertically to drive scheduling, We customer our business enabling

left available when date based component for can constrained a overseas delivery first we example, customers has factory. For adjust on suppliers a

bases. six are are to requiring two weeks smart available a FlexFit while for a to others reschedule. to the with result, time one adjusted adjustable our in due long bed the schedule delivery needing or Currently, to lead soonest of related aligned and reducing XX-week are delivery too risk of easily than XX% more semiconductor waiting to to beds delay a As smart smart windows availability,

with Our personally platform by are trust retention. sleep our building customers and engagement customer professionals our delivered individualized communications and digitally via increasing

tools and digital our our self-service advance experience. that self-scheduling as customers' We simplify continue such to

In will This Temporary and the supply operate addition, Sleep network, to support us not migration complete market volume our of scale enables with supply XXXX, share to expansion outbound expect network which unique design Number. agility distribution the assembly by manufacturing shortages to enable chain. and end and we a to of are single enterprise-wide gains.

is vertically and complex ability innovation the the onset of advancements and and continued of Our our we've marketing consumer are sustainability of made to retained pandemic. the loyalty navigate support strategy. demand great dynamics growth example strengths long-term and fuel customer of trust the model this sales since the our A integrated

which nearly leverage, Our we digital XXX see including ecosystem creation, demand points sustainable. basis driving as of is efficient

$X.X performance Sleep includes Nearly our Number the with sales productivity average contribution stores annually XX% a with million Our million, record at $X from stores $X XXXX more $X million stores over half generating average million, than of of of retail including sales. per including sales store eight two online mark.

net We stores. new in expect sales to average per approach while XXXX XX million $X adding store

referrals, metrics, bed high-quality and returns next demand XX conversion, surveyed growth. of In the than to intend within engagement, strong a cancels customer purchase continued addition, months. new including traffic, they More consumers our XX% signal indicate

record digital by Electronics and throughout XXXX. solutions is revealed most smart the Consumer January, XXXX, home. and platform, the our capable insights smart Our evaluations, sleeper the our ultimate be engagement dynamic will Innovative new referrals referrals, from end International ClimateXXX driver performance. health advanced smart introductions XXX all deepens personalized ecosystem, plan XXX to which a Show our your and life-changing near sustained and increased we and consideration growth of sleep the beds are furniture which of of September Number's newest, in flywheel. At engagement technology smart introduce bed comfort broadens We bed all since levels. smart of has are at monitoring, of followed Sleep provide the consumer

include, actions, Examples leveraging managing and in contingency in including smart efficiency distribution. by marketplace, as P&L to actions without find navigate price higher preparedness, our entire that with inflationary our elasticity drivers. promotional exclusive demand, communicate our and pricing metric-driven of As continuing near dampening and decisions with from remain management, value offerings, the beds we long-term costs steady on an and digitization offset liquidity model our investment and input we our we focused gains including disciplined direct-to-consumer benefited vertical growth the efforts and applying different capital

enterprise there changing will are designed is strategy. our advancing no near-term, and challenging long-term by provide the health sleep doubt network disruptions streams, supply capitalizing nearly While new a while wellness operating quality that like and the other Sleep business we stage innovations value highest Sleep is we that our opportunities Number chain through temporary the continued needs as with smart sleepers to through our dynamic sleep and In we create positioning support on subscription life in including every environment, for at the market single new are Longer global expansion Number revenue every programs. term, efficiencies and improves. from supply addressing are

to remarkable are also dedication that heart Number our and the We Sleep is team is of Health. purpose our with accelerate strategic continuing a augment our progression our Connected into At to unmatched. mission

health and this wellbeing. individuality of efforts, and sleep. to culture consumer improving global higher challenges. navigate and prioritizes ways have of Our that ongoing are XX Because lives and celebrates and staffing strong quality nearly through by manage a finds increase improved model utilize team smart risk day, we wellbeing million value, driven Every business to workplace their the the advantaged society effectively our are retention

provide David will XXXX outlook. our and financial Now additional on performance XXXX details

David Callen

Shelly. Thanks,

addressing QX are drives Here happened today. and performance? in we long-term Risks will cover our implications long-term four are guidance things and XXXX bias I What assumptions QX? How expectations. and

redesigns, alternate the X.X million to well-known shipments. all closed in delivered sales, were tactics leveraging these successfully moved needed Our component one Despite the and supply million quarter. weeks to expediting to more have electronic reach QX very of $XXX net in relationships, teams million $XXX efforts, performance, and the sales than of full-year component of including EPS QX strong $X.XX. too out QX a million net This late of and applied components versus $XXX $XXX large deliveries led about supplier gaps December. partners that global financial supplier finding

this lost, significant, unusual Margin shift in volume QX pressures leverage inefficiencies demand and rate lower caused the delivered the While and temporary. temporary were business is not to across infrastructure.

This This of cost was and rate pressures million strategy pressures profit XXX the pressures. took efficiency are annualized explaining due pricing XXXX net three are by declined inefficiencies that pressure, accelerated demand dynamic of year. with converts largest XXX $XXX gross rate dollars, cost temporary drive QX shutdowns. while NOP shift. basis XXXX prior in temporary of or benefit time. to half of points and the positioned remainder declines driver gross The pricing margin liquidity, versus delivered points. rate logistics supplies to actions profit point lower demand profit basis performance to our rate the gross sustainable sales the continued acceleration With these actions XXX more million will following and drive initiatives decline XX% this rate margin This we financial driven approach strong $XXX of and prior rate We Importantly, were margin infrastructure We NOP our the improvements but offset gross basis the of and improved. have employed the when to and rapid over protects by leverage COVID QX year. versus and of generation

these through supplies global are intact. constraints temporary as results and fundamentals to supply drive improve. intend business accelerate Our We

versus NOP significant sales, in in fiscal value by XX% EPS. Within an XXXX, frame, highlight performance strategic COVID-related extra CAGR million Our have $XX driven steadiness provide and benefited superior XXXX $XX also structure. demand that week our additional XXXX in through will excluding and of time, year XXXX. versus I long-term five-year including million that context, the cost net To over that time EPS fluctuations included and and week bias XXXX XXXX. included extra shareholder $X.XX

points XX% spending XXXX continued of and Our ROIC XX% demand XXXX QX to Over adjusted adjusted delivery grew productivity basis that two-year versus that net we XXXX drove in increased to profit up technology-enabled with in more to than up two XX% points projects, XXXX. XXXX. two net average EPS drove bias in XXXX XX% and the $X.X years. efficient Throughout drivers volume prioritization Smart XX% sustainable and operating prior in smart from XX% XXXX, years generation XXX versus than demand stock year. the strong $XXX profits our of X% QX. of to the in focused higher versus two and beds It improving R&D. nearly XX% basis with XXXX and of levered XX% two-year Life XX% comp and sales X.X% retail years bed acceleration million were and $X,XXX. This on up XX% two of years. increase efficiencies offsetting SG&A go-to-market since are now the generation including growth sleep repurchased infrastructure in significantly adjusted XXXX. than driven science innovations, more is years. in we Sleep Number of also XX% $X.X in flow conversion than increase two for our constraint, million strategy The Gross velocity leverage a year versus versus revenue $XXX cash This XXXX, grew net of billion, by value average adjusted capital creation. our XXX units QX XXXX higher expanded prioritize doubled bed sales, time, XX%. Even drove operating invested sales demand sequential XX% $XXX smart million our has higher was operating up highlighted store million. XXXX per online,

schedule reflected of is especially the weekly and adjustable The supply for talk XXXX, chain. Now supply QX. late hadn’t the are our in and semiconductor in of impact seeing will of December QX Omicron about constrain for deliveries. from bases we half society, That electronic includes delayed factories first risks abrupt current that onset implications suppliers let's our receipt on FlexFit This commitments XXXX. variant global for

balance of we result, and deliveries in and year. a increase profits our further the backlog through benefit to As expect QX

quarterly commitments XXXX. back also supply of We for have now half the

with continue half greater get to to volumes. work suppliers back Our while pushing teams visibility for weekly

year, the of to supply be chain stable a fundamental continues limiter While supply be last to global appears XXXX deliveries. than our more in

XX%, improve Continuous back expected velocity, half to to XX%. initiatives X% in easing our evolution, QX reduction assumes With will our improvement actions from like profitable this are most costs As XXXX prior and benefit and backlog year within QX pricing additional logistics of of meaningful guidance commodity of increased margin EPS outbound years year. margin gross we a expect to gross net beds, deliveries about about upside smart an QX result, modest our of the ahead. the constrained be sales no XX% with

EPS of guidance the year. more the pressures with for assumptions environment stable in expect are Here XX% XXXX, later cost our supporting XX% our for we growth to consumer year. for a Overall, easing

growth We net double-digit pricing expect single-digit high new to X points versus X growth to contribution sales drive XXXX with from to demand to mid low to and translate stores from actions.

continue initiatives including support deliveries financials performance acceleration and We near with to of innovations. breakthrough catalyzing a investments thereafter. long-term more of prioritize concert sleep while these support timing to science QX constrained in third The will pressure R&D

high in rate QX full-year single-digit X% the expect approximately operating net rate XXXX. profit with single-digit constraints, resulting despite of We NOP rate balance of low QX

the XX% assumes over year, and of XXXX growth of EPS about growth QX guidance with to XXXX and the in Our QX XX% to EPS QX. $X.XX prior EPS growth $X.XX balance the for strongest XX%

XXXX, growth to single-digit average it not growth, For to drive EPS high be average XX% to may line. though with expect XXXX mid we through a XX% straight topline

expect cash drive capital in million solar in expansion, build projects We initiatives future retail to for generate $XXX acquire to opened innovations. to and of new million invest Texas million We in two $XX plan Minnesota, California, $XX enablers ADCs, digital XXXX. and to support equipment about

XX% an of XXXX. repurchase rates strong. $XXX of are is tremendous fundamentals electronics and temporary. rate than authorization remaining The headwinds have Demand to in share to challenges XX% constraints tax The our accretive interest external We benefit share value from higher million more from in the nearly business and offset global stock. expected repurchases and supply from our effective see are

resilience for common the please point, our sleep. time team's this through Our and are we improve as over lines to embrace lives proven Josh, performance goal ingenuity exceptional At driving questions. quality open

Operator

Piper Keith Instructions] from with Peter the question Your comes Sandler. first [Operator line of

Your is line open.

Peter Keith

the Good afternoon. Thank commentary. guidance just want I you. guess I follow-up to on

it remarks, So calling in demand just for the single-digit. David, growth to you're of mid last sounds like high

what of talking would think you're – can then you guys not line a factoring about that in this confirm you with And backlog. your I be in last quarter? correspondingly, were reduction

of the an basically guidance you're through million the about $XXX into demand So what's carrying this that's excess point? at the on year, balance factored sheet

David Callen

for thanks question. Peter, Hey, the

as XXXX. the we thinking same right demand do in You're quarter We about about the growth demand last generation. expect were for XXXX

into million. access the of terms In carrying far it's more backlog $XXX than that that we're XXXX,

know, our net you our the demand meaningfully sales for As exceeded year.

we're we supply electronic visibility the However, currently suppliers. and that got with the the constraints through provided that the guidance have, the are managing our we now of the largely shape we've for commitments and year, way our on we EPS on basing XXXX that our from color

Shelly Ibach

at level And at Peter, end to same year we XXXX. that backlog the I'll expect add of have largely the this we as did end of of the

Peter Keith

clarifying a FlexFit the then basis. point, specifically it just And the like Okay. with shortages adjustable are sounds

if then base or on the deliver just purchase later follow whatsoever and the you at couldn't a bed any making is a a base date? not deliveries initially you're of with So part

Shelly Ibach

Yes. quarter, fourth component that Peter, the came late all. the semiconductor in impacted

first related the in to a high-end that base. smart delay with the chip X quarter, is is our associated adjustable FlexFit Here

it's weeks that or of So either XX that six delivery weeks. one right a has now

adjustable weeks if would queen FlexFit our depending specifics a are available it two our including you XX opening So to six or of be within whether XX% point one is delivering. it's smart of weeks right king. we Over purchase base, combination, the weeks. a beds, that price now, bed, And the or on

Peter Keith

quarter, question, of to the picture. outside want big in one I kind And more last just slip Okay.

this having with all data technology. of SleepXXX So sleep science in talked the the about you've past

plans thinking tease fairly a basis? subscription are you proprietary. like doing something on that other that devices to this How this monetize seems number of competing this on leaning Could your of information There dynamic. market service subscription is maybe guys some or any further. a the You're into you of type are about out provide you to type It have customers? go-forward

Shelly Ibach

weight the Well, line expanded that really monitoring revenue all platform, to are XXX our ClimateXXX Absolutely, Peter. We're late such a smart has full beds then new this thanks of bed year. that's be the a will following year. new new, introduce for for excited most temperature, that stream that in And This things expand then health company. assessments, our additional factors broader components new dynamic future important that which question, the our smart platform as only assessment. temperature puts position And and series. for also like and all are to monitoring, monitoring even those the to and for customers. as other of enables potential that subscription factors. our customers, not us much do a we And all And health a a but deliverable

Peter Keith

Okay. Thank much. you very

David Callen

Thanks, Pete.

Operator

with comes Seth Basham next the from Your of line question Wedbush.

is line open. Your

Seth Basham

afternoon. Thanks situation better a backlog to just lot and want I good understand the again.

$XXX the I over think quarter exiting $XXX be and fourth the same the now the you first shifting $XXX quarter exiting the million? was million to Do you expect the million quarter said the year from it third Is beyond. with carry XXXX? to entire fourth to exiting fourth range quarter through that backlog expected

David Callen

safe the Hey. net Seth, quantified dollar sales it's of is of But north the that in equivalent. we backlog. the $XXX haven't to million it's backlog excess assume amount exact

Seth Basham

of million. North $XXX

so So it from expanded only or quarter? some the the third fourth $XX million to

David Callen

right. That's

Seth Basham

it. Got

just than expect certain improving of Okay. anything matter to And backlog is then supply related online? going or be more more make as really And it the else. to in to a quarter the would that of it you the first XXXX, through later relates it's chips to progress

Shelly Ibach

Yes. Seth, absolutely.

of technology global additional components, allocation day. a manufacturers. it today Our weekly and stable and semiconductor we disruption we more bit single head we a more more board what guidance industry than this includes characterize a around half probably would lot every from the the challenged certainly there's And the through the the as see expect but them includes back And guidance for this I stable, because of flows being for on big less allocations industry by allocation half, to time remains fight our we those We the have through, as coming factories do that receive little XXXX. balance year. it's the a capacity into this time. in back at additional

here be XXXX. until first to our QX. So it don't meaningful delays. any we end in year-end reduction But that after where getting expect and we we'll the By increase really the it was then have to QX backlog this will It with year. in expect then exiting half, in at be of about

sit the we in cut will be XXXX as here So in today.

if our on more next and on you able obviously, to Now update procure – that we're we'll update we'll call.

Seth Basham

Thank dynamics understand in you. making to follow I quarter. up, the And right. fourth just sure the All

by If missing over your and sales missed expected million, $XX piece by than backlog $XXX more expectations there? you what's expanded million you the

David Callen

be the Well, into backlog our some quarter quarter. went the delivered to excess was that sales of the fourth contributing in going to

ending net of XXXX, size generating now on talking about the that of company is the of excess of the cumulative larger at sales backlog of larger equivalent. $XXX based in the million of we're the demand portion volumes neighborhood of So we're end north that and that the

Seth Basham

Okay. Thanks.

Shelly Ibach

the just add that's I'll because the demand quarter, Seth, a really And important part. fourth think about I in

in quarter. moving XXX. $XXX ended be by experienced. quarter. supply of in we've It to strong to that not then importantly high had the does to And the constraints single-digit needed was two at fourth last the demand appear end. be hit to – impacted was seem here Our we strong to the equivalent be that it that only million We up, deliveries the demand does is weeks not continues that demand And the and a this demand able

Seth Basham

you. Thank

David Callen

Thanks, Seth.

Operator

comes Your with next Griffin of from the Raymond Bobby question James. line

line is Your open.

Robert Griffin

the X% my you you plus make real up the Good question. in or got want you taking line? talking David, quick X% XQ. afternoon, X% just you everybody. minus on we're or that just just minus guess, first, I while said revenue? to clean we for Thanks Are clarify details, and for within I but us Can want sure

David Callen

– keeping to Sure. that Yes, constraints means are within from the Yes. getting point. X% we're us

it's to plus So opposed downside on the minus. as or

Robert Griffin

better Okay. Yes. now that, have ask questions but than figured, I That's with helpful. it's I to agree later.

Shelly Ibach

Absolutely.

David Callen

if would a it's it way. or plus out were I have big Yes, called pretty that minus. range, it

Shelly Ibach

Yes. Thank you.

Robert Griffin

back circle and Sleep to lead normal? to is Yes. the one kind some relationship, giving discounts wait protect have I Like that on as customer back I managing think protect Number? on are is bed on what going I right some control I time weeks? meeting customers typically they the and your you're more to you a how of other And unique guess, than distribution Or is kind longer backlog. you're business deposits this maybe for running you Shelly, brand of have kind for on customer wanted real is given are what's and they stripped XX to to guess, backlogs And thing, pulling to are still – the backlogs because capacity out the of strategy closed now? Because guys the you value media your that network? because the – get

Shelly Ibach

level of backlog. you the the it's know, lost. we real, Yes. Thanks is end about the this year, year is different a not backlog with, demand question, we as at a ended And while Absolutely similar for the backlog talk this Bobby.

fact, customers. to of our within over XX% are are right We seven our XX smart servicing And days available beds in now.

stay also And vertical customers, and bed Bobby well the smart when based very to is in really advantages right as selling with match the able for online they being the with the tight process their customer's need the buy. team as and the to includes model, meet our relationship our match members that So on right needs them. in the it allow person develop us or whether stores, of our customers,

this yet We because losing of be demand. important supply demand such is, of situation steam by the where are we're strength driving supply. our an ahead constrained we're in full that to our business not This us for

had digits here with strong quarter that single in on call we to February, we President's third our sit an XXXX. talked we all is We that these demand really mid we our in of expected weekend the business high to performance. model. weekend. single the high and month-to-date the at we're speaks completed important and with February it attributes And performance. about here record And And of all it's today outstanding digits as with strength here Our just exciting,

We have see steady cancels. We in returns, don't a there, slight increase an favorability. fact,

and We traffic, strong level value our that of that speaks to importance and record wellness health the of advantages and they customers. have the conversion the of a of beds this and model business smart provide and our

David Callen

and Yes. where way big Bobby, visibility our model want us when is at to of can into weeks, of deep standing behalf that wait. while customers that I'd just these if one through register. are that proven And promise makes it, to helping this we we we're what the benefits want able add they new. that's difference the to inventory is do commit see on. to and vertical this they're on and capability life-changing improvements. highlighted we manage They've and be – that's of And – creating to now that that willing a to that Shelly they're cash in That's digital different. decisions chain. better supply they that great our this can make it's several That's the the us

Robert Griffin

the, think products be stuff. normal, just and control in these some you are simpler we supply source climate Or a new assembled new products from new chain embedded to world products when and where of the the beds go systems to the lastly, and Are with the and gets the to guess supply kind coming chain? forward? compelling to I going have be bed And close this out helpful. about global is going its new and that's hopefully, you how understand back and risk Okay, going

Shelly Ibach

new as global Yes. on their suppliers in for the semiconductor platform world. working closely is developers the chips the well. necessary team We're top our software And electronic our working with with

and around So our their developers helpful this then in and have component and as robust, in important reduction And to to that we is will top be actual the obviously as future top significant our for all-new close SKUs relationship well. both also fairly our to really company line a company. we transition XX%

Robert Griffin

you, Shelly. was here looking That's luck very for. exactly Thank That was this helpful. I what in of environment. Best

Shelly Ibach

you. Thank

David Callen

Bobby. Thanks

Operator

the [Operator comes with Instructions] UBS. of Atul Maheshwari And from line your next question

is line open. Your

Atul Maheshwari

a guidance on Thanks lot what my incorporated supply know question. is to expectations you chain today, were based XXXX Shelly this for Dave, risk to could trying I'm conservative that what than evening. with how taking miss? your cause you supply basically to Good guidance? and you just the worse understand respect you've into your the that is what when around chain you’re setting

Shelly Ibach

question. you Atul, Yes. the for thank

guidance Our supply today we what contemplates know our on chain.

build delivering commitments, have able in half. the be that strengthen to on starts that first widespread in We backlog – this chips have half. to and steadiness any industry weekly to the back the allocations And not and belief We back in half. on I the we for here the then didn't would quarterly of in reduce the semiconductor in build year. that we've demand. about the talked we built this the create and of to delivery in. We able we've expectation did demand built But we're top there's

David Callen

that saw add. And that had that new starts pretty and information. XXXX and in Omicron we impact – variant a was terms with of globally some late on I'd Atul, people's big the had in performance. Yes. COVID, had fits Look, year

our don't real happen that XXXX, could have are but those into for again. like risks built that Something We remain. guidance that still

Atul Maheshwari

to you to the your or I that guidance, it. demand be upside have guidance? really potentially cause can there to upside, the to stronger Got be for frame to better see, get upside And if need and supply

Shelly Ibach

leaning going demand. near-term continue answer – strong supply. strong cash drive strengths model we're the It's are we're these demand, demand, into flow strategy. Strong upside, comes supply. to But our of is short-term, The and from important. the to our We're business not and

will we demand any obviously, it be Now delivered. create,

well. greater still future demand than as So upside expectations there's by our

David Callen

that make happen XXXX, in built guidance, sure. into to be we're would love happens that whether That's assumed but – our trying for we'd And that EPS Yes. not great.

Atul Maheshwari

then inability a fulfill on XX% call it. And is out you to plus, Got even was as demand. final for inventory me question up

So it seems a bit of a disconnect.

So you to? increase what related was could clarify inventory this

David Callen

margin was be why components XX% remainder talking About tied PPV, constraining is pretty had electronic sure. we rate that the For QX inflation the we're than really of significant the in about of XX% the gross which cost low. our of part to performance. other And that is that is chips so

Atul Maheshwari

luck the helpful very of Thank you. It's year. good rest with and Understood.

Shelly Ibach

you Thank very much.

Operator

line question Your of Curtis comes from of next Bank with the America. Nagle

open. line Your is

Curtis Nagle

Thanks. much. Thanks very

I carry that big just fully It just a I seen reconcile quarters, Is I'm sure commentary. maybe the such like Is fully sounds why guys forgive being cancellation. for end I I of backlog right. it? understand a issue? So I over It's couple to And here. have think, still just number? you of obtuse know, not – little confirm not I just that's not the the to do How year, the me maybe past the would, then semi due correct? that to, the don't wanted any

David Callen

Right.

highlighted, that's sitting of increase are new been talking appreciable of cancellation that, we purchase. that have the despite a model the this the rate, our they're communications and of And excited the customers we've time on on that warm, seen while basis, So people about. about benefit Shelly in them vertical their keeping another not backlog. have with in lengthening regular any Part as rates the cancellation we that is

seeing some favor not that, are and we've because of higher, that capabilities. cancels indications in been could go So these our new actually

benefit our baked more thinking get we XXXX. we're assumed in describe terms that drive that supply, And of XX% certainly do in about continuing of for how backlog we talked by We're And I our the taking for invest EPS our year want supply still in mean what will carrying to the So demand If driving against to growth. I our that the drive the demand. any to not drive any We can is which that growth We're But into guidance XX% way short-term year. through guidance. we're greater performance do into balance what the backlog, reducing we're that. about challenges. to will demand, we've of we our the to to of our this? backlog QX planning not how that's have is spending year, increase and benefit we in

Curtis Nagle

Okay. Thank you.

David Callen

Okay.

Operator

I'll There further questions to time. this no remarks. at closing are back call turn management team the any for the

David Callen

joining look well big. with We and today. Sleep forward our April. us Thank first quarter dream you performance for to discussing in XXXX you

Operator

This conference concludes your you for Thank participation. today's call.

now You disconnect. may

Sleep Number (SNBR) 24 Feb 222021 Q4 Earnings call transcript