Sleep Number designs, manufactures, and sells "smart beds" — mattresses with adjustable firmness, temperature control, and built-in biometric sensors — exclusively direct-to-consumer in the U.S. Each side of a dual-occupancy bed can be independently adjusted, and embedded sensors track heart rate, breathing, and movement to deliver personalized sleep scores through a companion app. Sleep Number sells through roughly 600 retail stores across all 50 states (~88% of net sales), which function as showrooms staffed by sleep consultants, with the remaining ~12% coming from online, phone, and chat. By selling exclusively direct, Sleep Number captures the full retail margin, supporting gross margins around 60%. Revenue is driven by units sold and average revenue per unit, which is influenced by product mix — higher-end Climate Series beds carry higher prices and margins. Repeat buyers and referrals account for over half of sales, reflecting the loyalty of Sleep Number's connected ecosystem of over 3M active users. About 40% of net sales are financed through a private-label credit arrangement with Synchrony Bank, which owns the receivables, so Sleep Number bears no credit risk. Sleep Number entered 2025 in a multi-year downturn and is executing a turnaround under new CEO Linda Findley, focused on simplifying the product lineup, rebuilding marketing around higher-ROI digital channels, and exploring channel expansion beyond its own stores, including potential wholesale partnerships.