Somnigroup International Inc. Reports Fourth Quarter and Full Year 2025 Results

• Fourth Quarter 2025 Consolidated Sales Growth of 55%
• Fourth Quarter EPS Growth of 65% and Adjusted EPS⁽¹⁾ Growth of 20%
• Strong Fourth Quarter Operating Income Growth of 94%
• Increased Quarterly Cash Dividend 13% to $0.17 per share

DALLAS, Feb. 17, 2026 /PRNewswire/ -- Somnigroup International Inc. (NYSE: SGI, "Company") announced financial results for the fourth quarter and year ended December 31, 2025 and issued financial guidance for the full year 2026.

FOURTH QUARTER 2025 FINANCIAL SUMMARY

• Total net sales increased 54.7% to $1,868.4 million as compared to $1,207.9 million in the fourth quarter of 2024, primarily driven by the inclusion of $892.1 million of Mattress Firm sales, offset by the accounting elimination of $269.0 million of sales from the Tempur Sealy North America segment to the Mattress Firm segment. Direct sales as a percent of net sales increased to 65.2% as compared to 26.9% in the fourth quarter of 2024.
• Gross margin was 44.0% as compared to 40.1% in the fourth quarter of 2024. Adjusted gross margin⁽¹⁾ was 44.9% as compared to 42.0% in the fourth quarter of 2024.
• Operating income increased 93.7% to $247.1 million as compared to $127.6 million in the fourth quarter of 2024. Adjusted operating income⁽¹⁾ increased 59.8% to $267.8 million as compared to $167.6 million in the fourth quarter of 2024. Both were primarily driven by the inclusion of Mattress Firm and realized sales and cost synergies.
• Net income increased 95.8% to $140.8 million as compared to $71.9 million in the fourth quarter of 2024. Adjusted net income⁽¹⁾ increased 43.4% to $153.7 million as compared to $107.2 million in the fourth quarter of 2024.
• Earnings per diluted share ("EPS") increased 65.0% to $0.66 as compared to $0.40 in the fourth quarter of 2024. Adjusted EPS⁽¹⁾ increased 20.0% to $0.72 as compared to $0.60 in the fourth quarter of 2024.

Company Chairman and CEO Scott Thompson commented, "We are pleased to report record fourth quarter net sales and adjusted EBITDA, along with a 20% increase in adjusted EPS. These results mark a continuation of the strength we displayed throughout the year, as we enhanced our competitive position and executed a successful combination with Mattress Firm.

Thompson continued, "We accomplished this while the industry remained at record lows, demonstrating the strength of our unmatched global scale and vertically integrated structure, broad omnichannel reach and diverse portfolio of trusted brands and innovative products. These competitive advantages position us to capitalize on the industry recovery and realize substantial growth."

Business Segment Highlights: Fourth Quarter 2025

The Company's business segments include Mattress Firm (acquired on February 5, 2025), Tempur Sealy North America and Tempur Sealy International. Corporate operating expenses are not included in any of the business segments and are presented separately as a reconciling item to consolidated results.

Mattress Firm net sales were $892.1 million for the fourth quarter of 2025. All Mattress Firm sales are reported through the direct channel.

Mattress Firm gross margin was 30.8% for the fourth quarter of 2025. Adjusted gross margin⁽¹⁾ was 32.4% for the fourth quarter of 2025.

Mattress Firm operating margin was 4.4% for the fourth quarter of 2025. Adjusted operating margin⁽¹⁾ was 5.4% for the fourth quarter of 2025.

Tempur Sealy North America net sales were impacted by the accounting elimination of $269.0 million of sales to Mattress Firm and the divestiture of Sleep Outfitters, which resulted in a net decrease to net sales of $273.6 million to $620.5 million as compared to $894.1 million in the fourth quarter of 2024. Net sales through the wholesale channel decreased $246.4 million to $518.7 million as compared to the fourth quarter of 2024, primarily driven by the accounting elimination of $269.0 million of sales to Mattress Firm. Net sales through the direct channel decreased $27.2 million, or 21.1%, to $101.8 million as compared to the fourth quarter of 2024, primarily driven by a decrease in sales from the divestiture of Sleep Outfitters.

North America gross margin was 59.0% as compared to 36.4% in the fourth quarter of 2024. Adjusted gross margin⁽¹⁾ improved 2,050 basis points to 59.5% as compared to 39.0% in the fourth quarter of 2024. These improvements were primarily driven by the elimination of sales to Mattress Firm, operational efficiencies and favorable mix.

North America operating margin was 27.2% as compared to 11.6% in the fourth quarter of 2024. Adjusted operating margin⁽¹⁾ improved 1,280 basis points to 27.6% as compared to 14.8% in the fourth quarter of 2024. These improvements were primarily driven by the impact of the Mattress Firm acquisition, the improvement in gross margin and operating expense leverage.

Tempur Sealy International net sales increased 13.4% to $355.8 million as compared to $313.8 million in the fourth quarter of 2024, primarily driven by expanded distribution. On a constant currency basis⁽¹⁾, International net sales increased 8.6% as compared to the fourth quarter of 2024. Net sales through the direct channel increased $29.2 million, or 14.9%, to $224.6 million as compared to the fourth quarter of 2024. Net sales through the wholesale channel increased $12.8 million, or 10.8%, to $131.2 million as compared to the fourth quarter of 2024.

International gross margin improved 50 basis points to 51.1% as compared to 50.6% in the fourth quarter of 2024. The improvement was primarily driven by operational efficiencies, partially offset by unfavorable mix.

International operating margin declined 60 basis points to 20.6% as compared to 21.2% in the fourth quarter of 2024. Adjusted operating margin⁽¹⁾ improved 110 basis points to 22.3% as compared to 21.2% in the fourth quarter of 2024. The improvement was primarily driven by operating expense leverage and the improvement in gross margin, offset by Asia JV performance.

Corporate operating expense decreased to $34.3 million as compared to $43.0 million in the fourth quarter of 2024, primarily driven by decreased costs related to the Mattress Firm acquisition. Adjusted operating expense⁽¹⁾ was $31.7 million as compared to $31.0 million in the fourth quarter of 2024.

Consolidated Financial Position

Consolidated net income increased 95.8% to $140.8 million as compared to $71.9 million in the fourth quarter of 2024. Adjusted net income⁽¹⁾ increased 43.4% to $153.7 million as compared to $107.2 million in the fourth quarter of 2024. EPS increased 65.0% to $0.66 as compared to $0.40 in the fourth quarter of 2024. Adjusted EPS⁽¹⁾ increased 20.0% to $0.72 as compared to $0.60 in the fourth quarter of 2024.

The Company ended the fourth quarter of 2025 with total debt of $4.7 billion and consolidated indebtedness less netted cash⁽¹⁾ of $4.6 billion. Leverage based on the ratio of consolidated indebtedness less netted cash⁽¹⁾ to adjusted EBITDA⁽¹⁾ was 3.21 times for the year ended December 31, 2025.

Financial Guidance

For the full year 2026, the Company currently expects adjusted EPS⁽¹⁾ between $3.00 to $3.40, which represents an approximate 19% increase from 2025 adjusted EPS at the mid-point of the range.

The Company noted that its expectations are based on information available at the time of this release, and are subject to changing conditions and risks, many of which are outside the Company's control, including the possible imposition of new tariffs or retaliatory tariffs, a potential U.S. government shutdown and its effect on sales and supply of materials, increases in existing tariffs and other changes in trade policy and regulations and the resulting uncertainty of the macroeconomic environment. The Company is unable to reconcile forward–looking adjusted EPS, a non–GAAP financial measure, to EPS, its most directly comparable forward–looking GAAP financial measure, without unreasonable efforts, because the Company is currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact EPS in 2026.

Dividend Increase

Today, the Company announced that its Board of Directors increased the quarterly cash dividend by 13% to $0.17 per share. This is the sixth increase to the dividend since 2021. The dividend is payable on March 19, 2026 to shareholders of record at the close of business on March 5, 2026.

Long-term Perspective

Company Chairman and CEO Scott Thompson commented, "Let me conclude by taking a step back to share longer-term perspectives. We have seen our markets performing below their historical trend line of growth and, despite this, our execution has led to robust adjusted EPS⁽¹⁾ growth. We believe 2026 will benefit from continued execution and the benefits from combining with Mattress Firm. Looking beyond this year, we are planning for the bedding industry to return to growth, while simultaneously realizing incremental benefits from the Mattress Firm transaction and continued industry leading execution. We are internally targeting sales to grow at a compound annual rate of mid single digits. This indicates that we expect Somnigroup adjusted EPS⁽¹⁾ to increase from $2.70 in 2025 to approximately $5.15 by 2028, a compound annual growth rate of 24%."

Prior Period Recast

Prior period information on the condensed consolidated statements of income has been recast to conform to the current period presentation for the reclassification of certain costs from selling and marketing expenses to cost of sales.

Conference Call Information

Somnigroup International Inc. will host a live conference call to discuss financial results today, February 17, 2026, at 8:00 a.m. Eastern Time. The call will be webcast and can be accessed on the Company's investor relations website at investor.somnigroup.com. After the conference call, a webcast replay will remain available on the investor relations section of the Company's website for 30 days.

Non-GAAP Financial Measures and Constant Currency Information

For additional information regarding EBITDA, adjusted EBITDA, adjusted EPS, adjusted net income, adjusted gross profit, adjusted gross margin, adjusted operating income (expense), adjusted operating margin, consolidated indebtedness and consolidated indebtedness less netted cash (all of which are non-GAAP financial measures), please refer to the reconciliations and other information included in the attached schedules. For information on the methodology used to present information on a constant currency basis, please refer to "Constant Currency Information" included in the attached schedules.

Forward-Looking Statements

This press release contains statements that may be characterized as "forward-looking," within the meaning of the federal securities laws. Such statements might include information concerning one or more of the Company's plans, guidance, objectives, goals, strategies and other information that is not historical information. When used in this release, the words "assumes," "estimates," "expects," "guidance," "anticipates," "might," "projects," "plans," "proposed," "targets," "intends," "believes," "will," "contemplates" and variations of such words or similar expressions are intended to identify forward-looking statements. These forward-looking statements include, without limitation, statements relating to the Company's expectations regarding the Mattress Firm acquisition, expectations regarding post-closing supply agreements, future performance, synergies, integration of acquired companies with our business, including the Mattress Firm acquisition, the Company's expected quarterly results, full year guidance and outperformance relative to the broader industry, the Company's quarterly cash dividend, the Company's expectations regarding geopolitical events (including the war in Ukraine and the conflict in the Middle East), the imposition of new tariffs or retaliatory tariffs, increases in existing tariffs and other changes in trade policy and regulations, changes in tax laws generally, including the H.R. 1 bill, a potential U.S. government shutdown and its effect on sales and supply of materials, loss of suppliers and disruptions in the supply of raw materials, the macroeconomic environment including its impact on consumer behavior, foreign exchange rates and fluctuations in such rates, the bedding industry, financial infrastructure, adjusted EPS for 2026 and subsequent periods and the Company's expectations for sales and adjusted EPS growth, including the Company's long-term expectations with respect to projected compound annual growth rate of sales and adjusted EPS through 2028 and broader market growth, product launches, expected hiring and advertising, capital project timelines, channel growth, acquisitions and commodities outlook. Any forward-looking statements contained herein are based upon current expectations and beliefs and various assumptions. There can be no assurance that the Company will realize these expectations, meet its guidance or that these beliefs will prove correct.

Numerous factors, many of which are beyond the Company's control, could cause actual results to differ materially from any that may be expressed herein as forward-looking statements. These potential risks include the ability to successfully integrate Mattress Firm into the Company's operations and realize synergies from the transaction; the possibility that the expected benefits of the acquisition are not realized when expected or at all; general economic, financial and industry conditions, particularly conditions relating to the financial performance and related credit issues present in the retail sector, as well as consumer confidence and the availability of consumer financing; the impact of the macroeconomic environment in both the U.S. and internationally on the Company; uncertainties arising from national and global events; industry competition; the effects of consolidation of retailers on revenues and costs; and consumer acceptance and changes in demand for the Company's products and the factors discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. There may be other factors that may cause the Company's actual results to differ materially from the forward-looking statements. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.

About Somnigroup International Inc.

Somnigroup (NYSE: SGI) is the world's largest bedding company, dedicated to transforming how the world sleeps. With superior capabilities in design, manufacturing, distribution and retail, we deliver breakthrough sleep solutions and serve the evolving needs of consumers in more than 100 countries worldwide through our fully-owned businesses, Tempur Sealy, Mattress Firm and Dreams. Our portfolio includes the most highly recognized brands in the industry, including Tempur-Pedic®, Sealy®, Stearns & Foster®, and Sleepy's®, and our global omni-channel platform enables us to meet consumers wherever they shop, offering a personal connection and innovation to provide a unique retail experience and tailored solutions.

Investor Relations Contact:

Aubrey Moore
Lauren Avritt
Investor Relations
Somnigroup International Inc.
[email protected] 

Summary of Channel Sales

The following table highlights net sales information, by channel and by business segment, for the three months ended December 31, 2025 and 2024:

SOMNIGROUP INTERNATIONAL INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(in millions, except percentages, ratios and per common share amounts)

The Company provides information regarding adjusted net income, EBITDA, adjusted EBITDA, adjusted EPS, adjusted gross profit, adjusted gross margin, adjusted operating income (expense), adjusted operating margin, consolidated indebtedness and consolidated indebtedness less netted cash, which are not recognized terms under GAAP and do not purport to be alternatives to net income, earnings per share, gross profit, gross margin, operating income (expense) and operating margin as a measure of operating performance, or an alternative to total debt as a measure of liquidity. The Company believes these non-GAAP financial measures provide investors with performance measures that better reflect the Company's underlying operations and trends, providing a perspective not immediately apparent from net income, gross profit, gross margin, operating income (expense) and operating margin. The adjustments management makes to derive the non-GAAP financial measures include adjustments to exclude items that may cause short-term fluctuations in the nearest GAAP financial measure, but which management does not consider to be the fundamental attributes or primary drivers of the Company's business.

The Company believes that exclusion of these items assists in providing a more complete understanding of the Company's underlying results from operations and trends, and management uses these measures along with the corresponding GAAP financial measures to manage the Company's business, to evaluate its consolidated and business segment performance compared to prior periods and the marketplace, to establish operational goals and to provide continuity to investors for comparability purposes. Limitations associated with the use of these non-GAAP financial measures include that these measures do not present all of the amounts associated with the Company's results as determined in accordance with GAAP. These non-GAAP financial measures should be considered supplemental in nature and should not be construed as more significant than comparable financial measures defined by GAAP. Because not all companies use identical calculations, these presentations may not be comparable to other similarly titled measures of other companies. For more information about these non-GAAP financial measures and a reconciliation to the nearest GAAP financial measure, please refer to the reconciliations on the following pages.

Constant Currency Information

In this press release the Company refers to, and in other press releases and other communications with investors the Company may refer to, net sales, earnings or other historical financial information on a "constant currency basis", which is a non-GAAP financial measure. These references to constant currency basis do not include operational impacts that could result from fluctuations in foreign currency rates. To provide information on a constant currency basis, the applicable financial results are adjusted based on a simple mathematical model that translates current period results in local currency using the comparable prior corresponding period's currency conversion rate. This approach is used for countries where the functional currency is the local country currency. This information is provided so that certain financial results can be viewed without the impact of fluctuations in foreign currency rates, thereby facilitating period-to-period comparisons of business performance.

Adjusted Net Income and Adjusted EPS

A reconciliation of reported net income to adjusted net income and the calculation of adjusted EPS are provided below. Management believes that the use of these non-GAAP financial measures provides investors with additional useful information with respect to the impact of various adjustments as described in the footnotes at the end of this release.

The following table sets forth the reconciliation of the Company's reported net income to adjusted net income and the calculation of adjusted EPS for the three months ended December 31, 2025 and 2024:

The following table sets forth the reconciliation of the Company's reported net income to adjusted net income and the calculation of adjusted EPS for the years ended December 31, 2025 and 2024:

Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income (Expense) and Adjusted Operating Margin

A reconciliation of gross profit and gross margin to adjusted gross profit and adjusted gross margin, respectively, and operating income (expense) and operating margin to adjusted operating income (expense) and adjusted operating margin, respectively, are provided below. Management believes that the use of these non-GAAP financial measures provides investors with additional useful information with respect to the impact of various adjustments as described in the footnotes at the end of this release.

The following table sets forth the reconciliation of the Company's reported gross profit and operating income (expense) to the calculation of adjusted gross profit and adjusted operating income (expense) for the three months ended December 31, 2025.

The following table sets forth the reconciliation of the Company's reported gross profit and operating income (expense) to the calculation of adjusted gross profit and adjusted operating income (expense) for the three months ended December 31, 2024:

The following table sets forth the reconciliation of the Company's reported gross profit and operating income (expense) to the calculation of adjusted gross profit and adjusted operating income (expense) for the year ended December 31, 2025.

The following table sets forth the reconciliation of the Company's reported gross profit and operating income (expense) to the calculation of adjusted gross profit and adjusted operating income (expense) for the year ended December 31, 2024.

EBITDA, Adjusted EBITDA and Consolidated Indebtedness less Netted Cash

The following reconciliations are provided below:

• Net income to EBITDA and adjusted EBITDA
• Ratio of consolidated indebtedness less netted cash to adjusted EBITDA
• Total debt, net to consolidated indebtedness less netted cash

Management believes that presenting these non-GAAP measures provides investors with useful information with respect to the Company's operating performance, cash flow generation and comparisons from period to period, as well as general information about the Company's leverage.

The Company's credit agreement (the "2023 Credit Agreement") provides the definition of adjusted EBITDA. Accordingly, the Company presents adjusted EBITDA to provide information regarding the Company's compliance with requirements under the 2023 Credit Agreement.

The following table sets forth the reconciliation of the Company's reported net income to the calculations of EBITDA and adjusted EBITDA for the three months ended December 31, 2025 and 2024:

The following table sets forth the reconciliation of the Company's net income to the calculations of EBITDA and adjusted EBITDA for the year ended December 31, 2025:

Under the 2023 Credit Agreement, the definition of adjusted EBITDA per credit facility contains certain restrictions that limit adjustments to net income when calculating adjusted EBITDA. For the twelve months ended December 31, 2025, the Company's adjustments to net income when calculating adjusted EBITDA did not exceed the allowable amount under the 2023 Credit Agreement.

The ratio of consolidated indebtedness less netted cash to adjusted EBITDA per credit facility is 3.21 times for the twelve months ended December 31, 2025. The 2023 Credit Agreement requires the Company to maintain a ratio of consolidated indebtedness less netted cash to adjusted EBITDA of less than 5.00 times.

The following table sets forth the reconciliation of the Company's reported total debt to the calculation of consolidated indebtedness less netted cash as of December 31, 2025. "Consolidated Indebtedness" and "Netted Cash" are terms used in the 2023 Credit Agreement for purposes of certain financial covenants.

SOURCE Somnigroup International