Sleep Number Corporation (SNBR) Misled Investors Regarding its Supply Chain Flexibility
A shareholder filed a class action on behalf of all purchasers of Sleep Number Corporation (NASDAQ: SNBR) common stock between February 18, 2021 and July 20, 2021, for violations of the Securities Exchange Act of 1934. Sleep Number, with its subsidiaries, provides sleep solutions and services in the U.S.
According to the complaint, during the class period, defendants touted the Company’s vertical integration and ability to “manage inventory to support a more customer-focused supply chain.” Specifically, Sleep Number’s CFO stated: “While explosive demand has certainly stressed our supply chain, we are benefiting [sic] from strong relationships with our global suppliers and are expediting components as needed to fulfill customers’ desire for our proven quality sleep solutions. … The flexibility and resilience we built into our global supply chain is also enabling rapid expansion of our fulfillment capacity, including the addition of 2 new assembly distribution centers in Dallas and Tampa here in the first quarter of 2021.”
In reality, on February 14, 2021, Winter Storm Uri battered the Gulf Coast of the U.S., including the states of Texas and Louisiana. A nationwide shortage of foam ensued due to the closure and work stoppages of plants in Texas and Louisiana that are the primary North American-based suppliers for the petrochemical components used in foam manufacture. As a result, Sleep Number experienced significant undisclosed supply chain disruptions that hindered its ability to meet surging customer demand for its products, which used foam as a necessary component material.
On July 20, 2021, Sleep Number announced its financial results for its second fiscal quarter ended June 30, 2021, revealing it had missed consensus estimates on the top and bottom line for the quarter and blaming the disappointing results in significant part on “near-term supply constraints” and component shortages. On this news, the price of Sleep Number stock fell nearly 13%, to close at $97.78 per share on July 21, 2021.
If you purchased shares of Sleep Number Corporation (SNBR) between February 18, 2021, and July 20, 2021, you have until February 14, 2022, to ask the court to appoint you lead plaintiff for the class. Submit a form for more information.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
