Investor Presentation October 2021

Sleep Number is setting the standard in sleep

science and research, with one of the most comprehensive and

accurate sleep databases in the world.

Sleep Number Corporation (SNBR) October 2021

F O R W A R D - LOOKING STATEMENTS

Statements used in this presentation relating to future plans, events, financial results or performance, such as the company's expectations for generating certain operating cash flows in 2021, are forward-looking statements subject to certain risks and uncertainties including, among others, such factors as current and future general and industry economic trends and consumer confidence; risks inherent in outbreaks of pandemics or contagious disease, including the COVID-19 pandemic and related consequences such as supply shortages, labor disruptions, and recommendations and/or mandates from federal, state and local authorities to close certain businesses or limit occupancy or operating hours; the effectiveness of our marketing messages; the efficiency of our advertising and promotional efforts; our ability to execute our Total Retail distribution strategy; our ability to achieve and maintain acceptable levels of product and service quality, and acceptable product return and warranty claims rates; our ability to continue to improve and expand our product line, and consumer acceptance of our products, product quality, innovation and brand image; industry competition, the emergence of additional competitive products and the adequacy of our intellectual-property rights to protect our products and brand from competitive or infringing activities; claims that our products, processes, advertising, or trademarks infringe the intellectual-property rights of others or do not comply with laws or regulations; availability of attractive and cost-effective consumer credit options; our lean manufacturing processes with minimal levels of inventory, which may leave us vulnerable to shortages in supply; our dependence on significant suppliers and third parties and our ability to maintain relationships with key suppliers or third parties, including several sole-source suppliers or providers of services; rising commodity costs and other inflationary pressures; risks inherent in global-sourcing activities, including tariffs, outbreaks of pandemics or contagious diseases, such as the COVID-19 pandemic, strikes and the potential for shortages in supply; risks of disruption in the operation of any of our main manufacturing facilities or assembly and distribution facilities; increasing government regulation; pending or unforeseen litigation and the potential for adverse publicity associated with litigation; the adequacy of our and third-party information systems to meet the evolving needs of our business and existing and evolving risks and regulatory standards applicable to data privacy and cybersecurity; the costs and potential disruptions to our business related to enhancing, patching, upgrading our information systems; the vulnerability of our and third-party information systems to attacks by hackers or other cyber threats that could compromise the security or accessibility of our systems, result in a data breach or disrupt our business; and our ability to attract, retain and motivate qualified management, executive and other key team members, including qualified retail sales professionals and managers. Additional information concerning these and other risks and uncertainties is contained in the company's filings with the Securities and Exchange Commission (SEC), including the Annual Report on Form 10-K, and other periodic reports filed with the SEC. The company has no obligation to publicly update or revise any of the forward-looking statements in this presentation.

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THE SLEEP NUMBER DIFFERENCE

Sleep Number Corporation (SNBR) - A company with purpose, comprised of over 5,000 passionate team members dedicated to our mission of improving lives by individualizing sleep experiences.

Individuality is our foundation.

Our company was founded under the name Select Comfort in 1987 (public company since 1998), on the premise that "one size doesn't fit all." We celebrate individuality in each other, in our own lives and in our customer's lives. We strive to embrace every individual's unique talents, perspectives, and experiences, as we create an environment where we can be our best selves. Valuing diversity, equity and inclusion makes us stronger, smarter and fuels our innovation and teamwork. Individuality connects us to our vision of becoming one of the world's most beloved brands by delivering an unparalleled sleep experience.

Our 360® smart beds provide each sleeper with effortless adjustable, personalized comfort and individualized sleep data and insights, including your SleepIQ® score. We have improved over 13 million lives as we strive to improve society's wellbeing through higher quality sleep. Sleep Number is setting the new standard in sleep science and research with proprietary sleep software, algorithms, data, and applications delivering comprehensive longitudinal data at a new scale of over 12 billion hours of sleep data and over 1 billion nights of sleep.

Our customer relationships are lifelong as we continuously add meaningful value to our customers' experience with personalized sleep data. Our consumer innovation strategy, vertically integrated business model and investments strengthen our competitive advantages and create a flywheel for sustainable growth, driving consumer demand and performance. As an engaging brand with an exclusive direct-to-consumer and vertically integrated business model located in the United States, and over 600 Sleep Number® stores with a synergistic digital experience, we are well positioned to continue delivering sustainable, superior shareholder value creation.

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RECORD Q3 2021 RESULTS

NET SALES	EARNINGS PER DILUTED SHARE	OPERATING INCOME
+21% vs. PY	+24% vs. PY, $2.22	+4% to $73 million, or 11.4% of net sales
Record $640 million	+106% YTD vs. 2020, $5.63	+62% YTD vs. 2020

OPERATING CASH FLOWS	LIVES IMPROVED	2021 EARNINGS OUTLOOK
Record $293 million YTD	More than 200,000	Targeting $7.25 per diluted share

"Our record third quarter financial results exceeded our expectations and demonstrate the power of our

advantaged business model and our teams' stellar execution. We are driving sustainable demand and market

share gains with our life-changing 360 smart beds by advancing proven initiatives.

Given our unique competitive leadership at the intersection of wellbeing and technology, the worldwide shortage

of semiconductors and other electronic components are a major challenge, elongating the timing of some customer deliveries. I could not be prouder of how our teams are aggressively pursuing solutions for these shortages to ensure we fulfill our mission of improving lives by individualizing sleep experiences."

Shelly Ibach, President and CEO, Sleep Number

Average SleepIQ® score 82

		PERFORMANCE ACCELERATED BY 360® SMART BEDS
Strong double-digit	NET SALES						EPS
		$ in millions
average demand growth				$1,857
									$4.90
over past 13 quarters				$1,698
		$1,532
		$1,444		$1,816 excl						$4.60 excl
	$1,311
					53rd week
$1,214										53rd week
					+7% vs PY
										$2.70	+70% vs PY
									$1.55	$1.92
								$1.10
							$0.97
2015	2016	2017		2018	2019	2020	2015	2016	2017	2018	2019	2020
			EDITDA				RETURN ON INVESTED CAPITAL (ROIC)

					$268						25.0%
					$257M excl
				$190	53rd week					17.8%
		$169	$166		+35% vs PY				16.0%	$773
	$146					14.3%
				14.4%			$757
$133					12.2%
					11.2%
								$719
	11.1%	11.7%	10.8%	11.2%			$700
11.0%		$727
		$686
2015	2016	2017	2018	2019	2020	2015	2016	2017	2018	2019	2020

Percent of net sales	Average invested capital ($ in millions)
	5