Matthew Mccartney

Matthew Mccartney from Wedbush Securities Inc. questioned the reasons for the outsized decline in the online channel and asked for a breakdown of the drivers behind the higher average revenue per smart bed.

Answer

CEO Shelly Ibach attributed the online channel's weakness to pressure at the low end of the product line, specifically the Classic series. She stated that the increase in average revenue was primarily driven by a favorable product mix from the successful high-end Climate series, while total promotional spending as a percent of net sales remained flat year-over-year.

Asked about the company's confidence in achieving profitability next year without assuming a market recovery, and inquired about performance during the Labor Day period relative to the industry.

Answer

Confidence in 2025 profitability stems from gross margin improvements and restructuring benefits, not from assumed volume growth. The company believes it is outperforming the industry year-to-date, as its sales are down less than 2% compared to a competitor's 10% decline.