Sleep Number is best known for its Sleep Number 360 smart beds which employ Sleep Number’s SleepIQ technology to automatically adjust the mattress’s firmness, comfort, and support as one sleeps. In an effort to differentiate Sleep Number from its competitors and to justify Sleep Number’s high stock price, Sleep Number repeatedly touted its “vertical integration” strategy as a key competitive advantage that enabled Sleep Number to manage its inventory and meet customer demand on a timely and profitable basis. The Sleep Number class action lawsuit alleges that, throughout the Class Period, defendants made false and misleading statements and failed to disclose that: (i) Sleep Number had suffered a severe disruption in its supply chain for foam as a result of Winter Storm Uri; (ii) Sleep Number did not have in place the supply chain flexibility, redundancies, and fail-safes, as had been represented to investors, sufficient to offset the foam supply disruption caused by Winter Storm Uri; (iii) because foam was a necessary component for Sleep Number’s production of its primary mattress products, Sleep Numbers ability to timely fulfill customer orders had been materially impaired; (iv) thus, Sleep Number was unable to meet surging customer demand for Sleep Number’s products; and (v) that, as a result, Sleep Number had been forced to delay mattress shipments to end consumers, pushing millions of dollars’ worth of sales into subsequent quarters and negatively impacting Sleep Numbers financial results. On April 21, 2021, Sleep Number revealed that Sleep Number had missed consensus sales estimates for the first fiscal quarter ended March 31, 2021 as a result of significant supply chain disruptions. Specifically, Sleep Number disclosed that Sleep Number had “more than $50 million of deliveries (two weeks) shifted out of the quarter due to temporary foam supply constraints,” representing nearly 9% of Sleep Number’s entire sales for the quarter. On this news, the price of Sleep Number stock fell by nearly 12%. Then, on July 20, 2021, Sleep Number revealed that Sleep Number had missed consensus estimates on the top and bottom line for the second fiscal quarter ended June 30, 2021 and again blamed the disappointing results in significant part on “near-term supply constraints” and component shortages. On this news, the price of Sleep Number stock fell by nearly 13%, further damaging investors.
Notes:
The alleged class includes : All purchasers of Sleep Number common stock between February 18, 2021 and July 20, 2021, inclusive.
For More information as well as to join this case please contact Atara Twersky, Esq. at atara@twerskylawgroup.com or atwersky@aftlaw.com. Atara is Principal at Twersky Law Group and Of counsel at AF&T law firm where she is director of Investor Services. Atara focuses her practice on assisting her clients with increasing their investment portfolio recoveries and ensuring that their portfolios remain healthy and robust. For more information on shareholder recoveries click here and to listen to Atara’s podcast with notable guests in the Pension fund Industry listen to Pension and Investments Podcast, on all matters related to your investment portfolio and more. For more information on Atara and her legal work connected to shareholder protection click here.
