Why Sleep Number Stock Dropped Today
Shares of mattress company Sleep Number (NASDAQ: SNBR) dropped today, and the reason might not be immediately apparent. U.S. gross domestic product (GDP) grew more than expected in the third quarter, and this could actually have negative ramifications for the company. That's why the stock was down 10% for the day.
Sleep Number is a premium mattress company. Because it is a premium product, its mattresses tend to be priced higher than average. This higher cost of ownership means most consumers finance their purchases from Sleep Number -- 53% of net sales in 2022 were financed by just one company: Sleep Number's partner Synchrony Financial.
Many economists were starting to predict that the Federal Reserve would stop raising interest rates. However, with U.S. GDP growing faster than expected, the Federal Reserve might choose to raise interest rates at least once more to cool things down.
Source Fool.com
