Sleep Number Corporation

No matter if you want to track your sleep data like me or just wake up refreshed because our beds effortlessly adjust to you night after night without ever looking at your device, our years of innovation meet your needs. With the only bed backed with 33 billion hours of sleep data and counting, we are ahead of the curve, and that allows us to focus our resources on the here and now of our customers' needs. Specifically, we will deprioritize adjacent opportunities where returns are uncertain or will take longer to realize. Instead, we will focus our resources on maintaining and improving our core technologies and introducing additional advancements while driving costs out of the product. Together, these initial efforts are the first steps to creating a more efficient and focused company for shareholders, team members, and customers. We expect the collective actions to reduce expenses by about $80 to $100 million before restructuring costs on an annualized basis as compared to our Q1 2025 cost structure. Since I joined earlier this month, we have already reduced our Q2 operating expenses by approximately 10% compared to the Q1 2025 cost structure. We are also thinking long-term and are evaluating more fundamental changes to position Sleep Number for future success. Now is a natural time to challenge assumptions and question all aspects of our business. Over the coming weeks, we intend to take a closer look at our strategy and operations. Everything is on the table. We are looking at our supply chain, distribution strategy, product selection, and geographic reach. As I mentioned, our goal is to create a flexible cost structure that will set us up for growth and expansion. This is just the beginning. We are approaching this work with an open mind and a bias towards bold and rapid action. I look forward to sharing more details about our long-term plan over the coming quarters. I'm energized to lead this company through the necessary reset, We are already making positive changes and we have a lot of work ahead of us. It will take time and effort. By putting the customer at the center of everything we do and leaning into the things that make us great, I believe that we can strengthen Sleep Number to its number one position as the leader in sleep wellness. I see a path to drive long-term sustainable growth and profitability. We have helped people get a better night's sleep for nearly four years by delivering superior products that address tonight's problem. Before we turn to questions, I want to take a moment to thank the entire team. Sleep Number's advantage is more than our product. From the team of talented designers who craft each bed to the experts in our stores and support who genuinely care about customers' sleep needs, our team members are ready for change, and I'm looking forward to their future partnership. With that, let's open the call to questions. Operator?

At this time, if you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. We do ask that you please limit your questions to one question and one follow-up. And your first question comes from the line of Bobby Griffin with Raymond James. Please go ahead.

Good evening. This is Alessandra Jimenez on for Bobby Griffin. Thank you for taking our questions. First, welcome, Linda, and we look forward to getting to know you. First, I just wanted, you know, you've only been in the role for about three weeks, but maybe just on a high level, what do you see are the low-hanging fruit for improvement that, you know, we should start to see in 2025? You know, I understand everything's on the table, but some of these aspects will take longer to realize.