Somnigroup International Inc. Reports Record Third Quarter Results
Somnigroup International (NYSE: SGI) reported record third-quarter 2025 results and raised full-year guidance. Net sales rose 63.3% to $2,122.6 million, driven by inclusion of Mattress Firm sales. Net income was $177.4 million and EPS was $0.83; adjusted EPS was $0.95. The Company generated record cash flow from operations of $408 million. Consolidated indebtedness totaled $4.7 billion with consolidated indebtedness less netted cash of $4.6 billion and trailing leverage of 3.28x. Management raised 2025 adjusted EPS guidance to $2.60–$2.75 and declared a quarterly dividend of $0.15 per share.
Somnigroup International (NYSE: SGI) ha riportato risultati record nel terzo trimestre 2025 e ha aumentato la guidance per l'intero anno. Vendite nette sono salite del 63,3% a 2.122,6 milioni di dollari, trainate dall'inclusione delle vendite di Mattress Firm. Utile netto è stato di 177,4 milioni di dollari e EPS è stato di 0,83 dollari; EPS rettificato è stato di 0,95. L'azienda ha generato un record flusso di cassa da operazioni di 408 milioni. L'indebitamento consolidato ammontava a 4,7 miliardi di dollari con liquidità netta consolidata di 4,6 miliardi e una leva trailing di 3,28x. La direzione ha aumentato la guidance 2025 per l'EPS rettificato a 2,60–2,75 dollari e ha dichiarato un dividendo trimestrale di 0,15 dollari per azione.
Somnigroup International (NYSE: SGI) informó resultados récord en el tercer trimestre de 2025 y elevó la guía para todo el año. Las ventas netas subieron un 63,3% a 2.122,6 millones de dólares, impulsadas por la inclusión de las ventas de Mattress Firm. El ingreso neto fue de 177,4 millones de dólares y el EPS fue de 0,83; el EPS ajustado fue de 0,95. La empresa generó un flujo de caja operativo récord de 408 millones. La deuda consolidada totalizó 4,7 mil millones de dólares con caja neta consolidada de 4,6 mil millones y una palanca trailing de 3,28x. La dirección elevó la guía de EPS ajustado para 2025 a 2,60–2,75 dólares y declaró un dividendo trimestral de 0,15 dólares por acción.
Somnigroup International (NYSE: SGI) 는 2025년 3분기 기록적인 실적을 발표했고 연간 가이던스를 상향했습니다. 순매출은 Mattress Firm 매출 포함으로 63.3% 증가한 21억 2260만 달러를 기록했습니다. 순이익은 1억 7740만 달러였고 주당순이익(EPS)은 0.83달러; 조정 EPS는 0.95였습니다. 회사는 영업활동 현금흐름 4억 8千万 달러의 기록을 달성했습니다. 총부채는 47억 달러였으며 순현금은 46억 달러, 후행 레버리지(3.28x)를 기록했습니다. 경영진은 2025년 조정 EPS 가이던스를 2.60–2.75달러로 상향했고 분기 배당금을 주당 0.15달러로 선언했습니다.
Somnigroup International (NYSE: SGI) a publié des résultats record au troisième trimestre 2025 et a relevé ses prévisions annuelles. Le chiffre d'affaires net a augmenté de 63,3% pour atteindre 2 122,6 millions de dollars, tiré par l'inclusion des ventes Mattress Firm. Le résultat net était de 177,4 millions de dollars et EPS était de 0,83 $; l'EPS ajusté était de 0,95 $. L'entreprise a généré un flux de trésorerie opérationnel record de 408 millions. L'endettement consolidé s'élevait à 4,7 milliards de dollars avec une dette consolidée nette de 4,6 milliards et un levier trailing de 3,28x. La direction a relevé la prévision EPS ajusté 2025 à 2,60–2,75 dollars et a déclaré un dividende trimestriel de 0,15 $ par action.
Somnigroup International (NYSE: SGI) meldete Rekord-Ergebnisse im dritten Quartal 2025 und hob die Jahresprognose an. Nettoverkäufe stiegen um 63,3% auf 2.122,6 Mio. USD, getragen durch die Einbeziehung der Mattress Firm-Verkäufe. Nettoeinkommen betrug 177,4 Mio. USD und EPS war 0,83; bereinigtes EPS war 0,95. Das Unternehmen generierte einen Rekord-Cashflow aus operativer Tätigkeit von 408 Mio. USD. Die gesamtverschuldung betrug 4,7 Mrd. USD bei konsolidierter Nettoverschuldung von 4,6 Mrd. USD und einer trailing Leverage von 3,28x. Das Management hob die 2025er Guidance für bereinigtes EPS auf 2,60–2,75 USD an und erklärte eine vierteljährliche Dividende von 0,15 USD pro Aktie.
Somnigroup International (NYSE: SGI) أبلغت عن نتائج قياسية في الربع الثالث 2025 ورفعت التوجيه للسنة بأكملها. المبيعات الصافية ارتفعت بنسبة 63.3% لتصل إلى 2,122.6 مليون دولار، مدفوعة بإدراج مبيعات Mattress Firm. صافي الدخل كان 177.4 مليون دولار و
- Net sales +63.3% to $2,122.6 million (Q3 2025)
- Record cash flow from operations $408 million (Q3 2025)
- Adjusted EPS guidance raised to $2.60–$2.75 for full-year 2025
- Adjusted EPS +15.9% to $0.95 (Q3 2025)
- Total debt $4.7 billion at September 30, 2025
- Consolidated indebtedness less netted cash $4.6 billion, leverage 3.28x
- Tempur Sealy North America net sales down $279.2 million (Q3 2025) after intercompany elimination and divestiture
Insights
Record revenue, raised guidance and strong cash flow driven by the Mattress Firm acquisition; leverage remains elevated.
The quarter shows consolidated net sales up
Key dependencies and risks called out in the release include integration of Mattress Firm, the divestiture of Sleep Outfitters and exposure to trade and macro variables; consolidated indebtedness less netted cash stands at
Watch near term: confirm realization of announced synergies and integration milestones, monitor quarterly cash flow and leverage trends, and track execution against the raised adjusted EPS range in the next reported period (full year
-
Consolidated Sales Growth of
63% -
EPS Growth of
14% and Adjusted EPS(1) Growth of16% -
Record Cash Flow from Operations of
$408 million - Raises Financial Guidance for Full Year 2025
THIRD QUARTER 2025 FINANCIAL SUMMARY
- Total net sales increased
63.3% to$2,122.6 million $1,300.0 million $1,070.8 million $313.7 million 65.2% as compared to24.5% in the third quarter of 2024. - Gross margin was
44.9% as compared to42.4% in the third quarter of 2024. Adjusted gross margin(1) was45.6% as compared to43.2% in the third quarter of 2024. - Operating income increased
55.9% to$314.7 million $201.8 million 53.6% to$343.7 million $223.7 million - Net income increased
36.5% to$177.4 million $130.0 million 37.5% to$201.4 million $146.5 million - Earnings per diluted share ("EPS") increased
13.7% to$0.83 $0.73 15.9% to$0.95 $0.82
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KEY HIGHLIGHTS |
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(in millions, except percentages and per common share amounts) |
Three Months Ended |
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% Reported |
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|
September 30, 2025 |
|
September 30, 2024 |
|||
|
Net sales |
$ 2,122.6 |
|
$ 1,300.0 |
|
63.3 % |
|
Net income |
$ 177.4 |
|
$ 130.0 |
|
36.5 % |
|
Adjusted net income (1) |
$ 201.4 |
|
$ 146.5 |
|
37.5 % |
|
EPS |
$ 0.83 |
|
$ 0.73 |
|
13.7 % |
|
Adjusted EPS (1) |
$ 0.95 |
|
$ 0.82 |
|
15.9 % |
Company Chairman and CEO Scott Thompson commented, "We are pleased to report record sales, profits and operating cash flow in the third quarter, driven by strong operational execution across all of Somnigroup's business units, augmented by progress on our acquisition-related sales and cost synergy initiatives. This quarter's strong results were underpinned by slightly improving bedding industry trends. We are encouraged by our success this quarter and are well positioned to further leverage our leading manufacturing and retailing capabilities, trusted brands and broad omni-channel distribution footprint to capitalize on improvements across markets."
Business Segment Highlights
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
Mattress Firm gross margin was
Mattress Firm operating margin was
Tempur Sealy North America net sales were impacted by the accounting elimination of
Tempur Sealy International net sales increased
International gross margin declined 40 basis points to
International operating margin declined 10 basis points to
Corporate operating expense decreased to
Consolidated Financial Position
Consolidated net income increased
The Company ended the third quarter of 2025 with total debt of
Financial Guidance
For the full year 2025, the Company raised its expectations for adjusted EPS(1) to a range of
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, 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 2025.
Dividend Declared
The Company's Board of Directors declared a quarterly cash dividend of
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.
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(1) This is a non-GAAP financial measure. Please refer to "Non-GAAP Financial Measures and Constant Currency Information" below. |
Conference Call Information
Somnigroup International Inc. will host a live conference call to discuss financial results today, November 6, 2025, 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, integration of acquired companies with our business, 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
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 Mattress Firm's ongoing operations; 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
About Somnigroup International Inc.
Somnigroup (NYSE: SGI) is the world's largest bedding company, dedicated to improving people's lives through better sleep. 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 sleep solutions.
Investor Relations Contact:
Aubrey Moore
Investor Relations
Somnigroup International Inc.
Investor.relations@somnigroup.com
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SOMNIGROUP INTERNATIONAL INC. AND SUBSIDIARIES Condensed Consolidated Statements of Income (in millions, except percentages and per common share amounts) (unaudited) |
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Three Months Ended |
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Nine Months Ended |
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|
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|
|
September 30, |
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Chg % |
|
September 30, |
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Chg % |
||||
|
|
2025 |
|
2024 |
|
|
|
2025 |
|
2024 |
|
|
|
Net sales |
$ 2,122.6 |
|
$ 1,300.0 |
|
63.3 % |
|
$ 5,608.1 |
|
$ 3,723.0 |
|
50.6 % |
|
Cost of sales |
1,169.8 |
|
748.5 |
|
|
|
3,247.6 |
|
2,179.6 |
|
|
|
Gross profit |
952.8 |
|
551.5 |
|
72.8 % |
|
2,360.5 |
|
1,543.4 |
|
52.9 % |
|
Selling and marketing expenses |
480.8 |
|
233.6 |
|
|
|
1,303.9 |
|
699.9 |
|
|
|
General, administrative and other expenses |
160.4 |
|
118.6 |
|
|
|
545.8 |
|
347.4 |
|
|
|
Loss on disposal of business |
— |
|
— |
|
|
|
13.9 |
|
— |
|
|
|
Equity income in earnings of unconsolidated affiliates |
(3.1) |
|
(2.5) |
|
|
|
(10.9) |
|
(10.5) |
|
|
|
Operating income |
314.7 |
|
201.8 |
|
55.9 % |
|
507.8 |
|
506.6 |
|
0.2 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense, net: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
69.9 |
|
30.8 |
|
|
|
203.7 |
|
98.5 |
|
|
|
Other expense (income), net |
10.9 |
|
0.4 |
|
|
|
16.8 |
|
(0.5) |
|
|
|
Total other expense, net |
80.8 |
|
31.2 |
|
|
|
220.5 |
|
98.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
233.9 |
|
170.6 |
|
37.1 % |
|
287.3 |
|
408.6 |
|
(29.7) % |
|
Income tax provision |
(56.2) |
|
(40.8) |
|
|
|
(42.9) |
|
(95.5) |
|
|
|
Net income before non-controlling interest |
177.7 |
|
129.8 |
|
36.9 % |
|
244.4 |
|
313.1 |
|
(21.9) % |
|
Less: Net income (loss) attributable to non-controlling interest |
0.3 |
|
(0.2) |
|
|
|
1.1 |
|
0.7 |
|
|
|
Net income attributable to Somnigroup International Inc. |
$ 177.4 |
|
$ 130.0 |
|
36.5 % |
|
$ 243.3 |
|
$ 312.4 |
|
(22.1) % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ 0.85 |
|
$ 0.75 |
|
13.3 % |
|
$ 1.19 |
|
$ 1.80 |
|
(33.9) % |
|
Diluted |
$ 0.83 |
|
$ 0.73 |
|
13.7 % |
|
$ 1.17 |
|
$ 1.75 |
|
(33.1) % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
209.9 |
|
173.7 |
|
|
|
204.7 |
|
173.6 |
|
|
|
Diluted |
212.5 |
|
178.2 |
|
|
|
207.9 |
|
178.1 |
|
|
|
SOMNIGROUP INTERNATIONAL INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (in millions) |
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|
September 30, 2025 |
|
December 31, 2024 |
|
ASSETS |
(unaudited) |
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
Cash and cash equivalents |
$ 100.2 |
|
$ 117.4 |
|
Accounts receivable, net |
397.7 |
|
404.5 |
|
Inventories |
645.1 |
|
447.0 |
|
Prepaid expenses and other current assets |
166.8 |
|
96.5 |
|
Total Current Assets |
1,309.8 |
|
1,065.4 |
|
Restricted cash |
— |
|
1,592.3 |
|
Property, plant and equipment, net |
1,015.3 |
|
811.1 |
|
Goodwill |
4,425.2 |
|
1,066.7 |
|
Trade name and other intangible assets, net |
2,587.7 |
|
700.5 |
|
Operating lease right-of-use assets |
1,884.4 |
|
598.8 |
|
Deferred income taxes |
15.2 |
|
15.3 |
|
Other non-current assets |
161.9 |
|
130.3 |
|
Total Assets |
$ 11,399.5 |
|
$ 5,980.4 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
Accounts payable |
$ 458.8 |
|
$ 360.5 |
|
Accrued expenses and other current liabilities |
749.6 |
|
393.9 |
|
Short-term operating lease obligations |
395.8 |
|
126.8 |
|
Current portion of long-term debt |
113.7 |
|
69.5 |
|
Income taxes payable |
24.1 |
|
9.6 |
|
Total Current Liabilities |
1,742.0 |
|
960.3 |
|
Long-term debt, net |
4,511.5 |
|
3,740.4 |
|
Long-term operating lease obligations |
1,600.1 |
|
532.1 |
|
Deferred income taxes |
427.9 |
|
108.3 |
|
Other non-current liabilities |
123.7 |
|
71.0 |
|
Total Liabilities |
8,405.2 |
|
5,412.1 |
|
|
|
|
|
|
Redeemable non-controlling interest |
8.9 |
|
9.3 |
|
|
|
|
|
|
Total Stockholders' Equity |
2,985.4 |
|
559.0 |
|
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders' Equity |
$ 11,399.5 |
|
$ 5,980.4 |
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SOMNIGROUP INTERNATIONAL INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (in millions) (unaudited) |
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Nine Months Ended |
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|
|
September 30, |
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|
|
2025 |
|
2024 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
Net income before non-controlling interest |
$ 244.4 |
|
$ 313.1 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
Depreciation and amortization |
180.0 |
|
121.9 |
|
Amortization of stock-based compensation |
30.7 |
|
27.3 |
|
Amortization of deferred financing costs |
5.0 |
|
2.8 |
|
Bad debt expense |
4.4 |
|
9.9 |
|
Deferred income taxes |
1.5 |
|
0.6 |
|
Dividends received from unconsolidated affiliates |
19.0 |
|
23.4 |
|
Equity income in earnings of unconsolidated affiliates |
(10.9) |
|
(10.5) |
|
Loss on disposal of business |
13.9 |
|
— |
|
Foreign currency adjustments and other |
14.2 |
|
0.9 |
|
Changes in operating assets and liabilities, net of effect of business acquisitions |
198.5 |
|
48.0 |
|
Net cash provided by operating activities |
700.7 |
|
537.4 |
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
Purchases of property, plant and equipment |
(108.6) |
|
(76.4) |
|
Acquisitions, net of cash acquired |
(2,824.5) |
|
— |
|
Purchases of investments |
(23.4) |
|
— |
|
Other |
8.1 |
|
0.5 |
|
Net cash used in investing activities |
(2,948.4) |
|
(75.9) |
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
Proceeds from borrowings under long-term debt obligations |
3,429.9 |
|
1,165.3 |
|
Repayments of borrowings under long-term debt obligations |
(2,628.7) |
|
(1,472.6) |
|
Proceeds from exercise of stock options |
49.4 |
|
0.3 |
|
Treasury stock repurchased |
(132.4) |
|
(43.8) |
|
Dividends paid |
(95.9) |
|
(70.1) |
|
Repayments of finance lease obligations and other |
(16.4) |
|
(14.8) |
|
Net cash provided by (used in) financing activities |
605.9 |
|
(435.7) |
|
|
|
|
|
|
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
32.3 |
|
3.5 |
|
(Decrease) increase in cash, cash equivalents and restricted cash |
(1,609.5) |
|
29.3 |
|
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period |
1,709.7 |
|
74.9 |
|
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period |
$ 100.2 |
|
$ 104.2 |
Summary of Channel Sales
The following table highlights net sales information, by channel and by business segment, for the three months ended September 30, 2025 and 2024:
|
|
Three Months Ended September 30, |
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(in millions) |
Consolidated |
|
Tempur Sealy North |
|
Tempur Sealy International |
|
Mattress Firm |
||||||||
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
|
2025 |
|
2024 |
|
2025 |
|
2024 |
|
Wholesale (a) |
$ 739.3 |
|
$ 981.8 |
|
$ 626.4 |
|
$ 878.4 |
|
$ 112.9 |
|
$ 103.4 |
|
$ — |
|
$ — |
|
Direct (b) |
1,383.3 |
|
318.2 |
|
109.7 |
|
136.9 |
|
202.8 |
|
181.3 |
|
1,070.8 |
|
— |
|
|
$ 2,122.6 |
|
$ 1,300.0 |
|
$ 736.1 |
|
$ 1,015.3 |
|
$ 315.7 |
|
$ 284.7 |
|
$ 1,070.8 |
|
$ — |
|
|
|
|
(a) |
The Wholesale channel includes all third party retailers, including third party distribution, hospitality and healthcare. |
|
(b) |
The Direct channel includes company-owned stores, online and call centers. |
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 September 30, 2025 and 2024:
|
|
Three Months Ended |
||
|
(in millions, except per share amounts) |
September 30, 2025 |
|
September 30, 2024 |
|
Net income |
$ 177.4 |
|
$ 130.0 |
|
Business combination charges (1) |
32.2 |
|
— |
|
Supply chain transition costs (2) |
7.3 |
|
8.2 |
|
Disposition-related costs (3) |
1.3 |
|
— |
|
Transaction costs (4) |
(0.9) |
|
13.7 |
|
Adjusted income tax provision (5) |
(15.9) |
|
(5.4) |
|
Adjusted net income |
$ 201.4 |
|
$ 146.5 |
|
|
|
|
|
|
Adjusted earnings per common share, diluted |
$ 0.95 |
|
$ 0.82 |
|
|
|
|
|
|
Diluted shares outstanding |
212.5 |
|
178.2 |
|
|
|
Please refer to Footnotes at the end of this release. |
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 September 30, 2025.
|
|
3Q 2025 |
||||||||||||||||
|
(in millions, except percentages) |
Consolidated |
|
Margin |
|
Tempur |
|
Margin |
|
Tempur |
|
Margin |
|
Mattress |
|
Margin |
|
Corporate |
|
Net sales |
$ 2,122.6 |
|
|
|
$ 736.1 |
|
|
|
$ 315.7 |
|
|
|
$ 1,070.8 |
|
|
|
$ — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
$ 952.8 |
|
44.9 % |
|
$ 429.6 |
|
58.4 % |
|
$ 155.1 |
|
49.1 % |
|
$ 368.1 |
|
34.4 % |
|
$ — |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business combination charges (1) |
13.4 |
|
|
|
0.7 |
|
|
|
— |
|
|
|
12.7 |
|
|
|
— |
|
Supply chain transition costs (2) |
0.9 |
|
|
|
0.9 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total adjustments |
14.3 |
|
|
|
1.6 |
|
|
|
— |
|
|
|
12.7 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted gross profit |
$ 967.1 |
|
45.6 % |
|
$ 431.2 |
|
58.6 % |
|
$ 155.1 |
|
49.1 % |
|
$ 380.8 |
|
35.6 % |
|
$ — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (expense) |
$ 314.7 |
|
14.8 % |
|
$ 214.4 |
|
29.1 % |
|
$ 57.0 |
|
18.1 % |
|
$ 81.2 |
|
7.6 % |
|
$ (37.9) |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business combination charges (1) |
26.0 |
|
|
|
0.7 |
|
|
|
— |
|
|
|
19.4 |
|
|
|
5.9 |
|
Transaction costs (4) |
1.2 |
|
|
|
— |
|
|
|
— |
|
|
|
0.3 |
|
|
|
0.9 |
|
Supply chain transition costs (2) |
0.9 |
|
|
|
0.9 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Disposition-related costs (3) |
0.9 |
|
|
|
0.9 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total adjustments |
29.0 |
|
|
|
2.5 |
|
|
|
— |
|
|
|
19.7 |
|
|
|
6.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating income (expense) |
$ 343.7 |
|
16.2 % |
|
$ 216.9 |
|
29.5 % |
|
$ 57.0 |
|
18.1 % |
|
$ 100.9 |
|
9.4 % |
|
$ (31.1) |
|
|
|
Please refer to 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 September 30, 2024:
|
|
3Q 2024 |
||||||||||||
|
(in millions, except percentages) |
Consolidated |
|
Margin |
|
Tempur |
|
Margin |
|
Tempur |
|
Margin |
|
Corporate |
|
Net sales |
$ 1,300.0 |
|
|
|
$ 1,015.3 |
|
|
|
$ 284.7 |
|
|
|
$ — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
$ 551.5 |
|
42.4 % |
|
$ 410.6 |
|
40.4 % |
|
$ 140.9 |
|
49.5 % |
|
$ — |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supply chain transition costs (2) |
8.0 |
|
|
|
8.0 |
|
|
|
— |
|
|
|
— |
|
Transaction costs (4) |
2.4 |
|
|
|
2.4 |
|
|
|
— |
|
|
|
— |
|
Total adjustments |
10.4 |
|
|
|
10.4 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted gross profit |
$ 561.9 |
|
43.2 % |
|
$ 421.0 |
|
41.5 % |
|
$ 140.9 |
|
49.5 % |
|
$ — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (expense) |
$ 201.8 |
|
15.5 % |
|
$ 193.3 |
|
19.0 % |
|
$ 51.7 |
|
18.2 % |
|
$ (43.2) |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction costs (4) |
13.7 |
|
|
|
2.5 |
|
|
|
— |
|
|
|
11.2 |
|
Supply chain transition costs (2) |
8.2 |
|
|
|
8.2 |
|
|
|
— |
|
|
|
— |
|
Total adjustments |
21.9 |
|
|
|
10.7 |
|
|
|
— |
|
|
|
11.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating income (expense) |
$ 223.7 |
|
17.2 % |
|
$ 204.0 |
|
20.1 % |
|
$ 51.7 |
|
18.2 % |
|
$ (32.0) |
|
|
|
Please refer to Footnotes at the end of this release. |
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 September 30, 2025 and 2024:
|
|
Three Months Ended |
||
|
(in millions) |
September 30, 2025 |
|
September 30, 2024 |
|
Net income |
$ 177.4 |
|
$ 130.0 |
|
Interest expense, net |
69.9 |
|
30.8 |
|
Income tax provision |
56.2 |
|
40.8 |
|
Depreciation and amortization |
75.5 |
|
51.3 |
|
EBITDA |
$ 379.0 |
|
$ 252.9 |
|
Adjustments: |
|
|
|
|
Business combination charges (1) |
32.2 |
|
— |
|
Supply chain transition costs (2) |
7.3 |
|
8.2 |
|
Disposition-related costs (3) |
1.3 |
|
— |
|
Transaction costs (4) |
(0.9) |
|
13.7 |
|
Adjusted EBITDA |
$ 418.9 |
|
$ 274.8 |
|
|
|
Please refer to Footnotes at the end of this release. |
The following table sets forth the reconciliation of the Company's net income to the calculations of EBITDA and adjusted EBITDA for the trailing twelve months ended September 30, 2025:
|
|
Trailing Twelve Months Ended |
|
(in millions) |
September 30, 2025 |
|
Net income |
$ 315.2 |
|
Interest expense, net |
223.4 |
|
Transaction-related interest expense, net (6) |
16.6 |
|
Income tax provision |
66.0 |
|
Depreciation and amortization |
264.2 |
|
EBITDA |
$ 885.4 |
|
Adjustments: |
|
|
Acquisition-related costs (7) |
114.2 |
|
Transaction costs (4) |
67.9 |
|
Business combination charges (1) |
49.8 |
|
Customer-related transition charges (8) |
26.7 |
|
Loss on disposal of business (9) |
13.9 |
|
Supply chain transition costs (2) |
13.4 |
|
Disposition-related costs (3) |
10.5 |
|
Cybersecurity event (10) |
(4.9) |
|
Adjusted EBITDA |
$ 1,176.9 |
|
Loss from unrestricted subsidiary (11) |
4.7 |
|
Earnings from Mattress Firm prior to acquisition (12) |
107.6 |
|
Future cost synergies to be realized from Mattress Firm acquisition (13) |
100.0 |
|
Adjusted EBITDA per credit facility |
$ 1,389.2 |
|
|
|
|
Consolidated indebtedness less netted cash |
$ 4,558.2 |
|
|
|
|
Ratio of consolidated indebtedness less netted cash to adjusted EBITDA per credit facility |
3.28 times |
|
|
|
Please refer to Footnotes at the end of this release. |
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 trailing twelve months ended September 30, 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 3.28 times for the trailing twelve months ended September 30, 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 September 30, 2025. "Consolidated Indebtedness" and "Netted Cash" are terms used in the 2023 Credit Agreement for purposes of certain financial covenants.
|
(in millions) |
September 30, 2025 |
|
Total debt, net |
$ 4,625.2 |
|
Plus: Deferred financing costs (14) |
33.2 |
|
Consolidated indebtedness |
4,658.4 |
|
Less: Netted cash (15) |
100.2 |
|
Consolidated indebtedness less netted cash |
$ 4,558.2 |
|
|
|
Please refer to Footnotes at the end of this release. |
Footnotes:
|
(1) |
In the third quarter of 2025, the Company recorded |
|
(2) |
In the third quarter of 2025, the Company recorded |
|
(3) |
In the third quarter of 2025, the Company recorded |
|
(4) |
In the third quarter of 2025, the Company recorded a benefit of |
|
(5) |
Adjusted income tax provision represents the tax effects associated with the aforementioned items. |
|
(6) |
In the trailing twelve months ended September 30, 2025, the Company incurred |
|
(7) |
In the trailing twelve months ended September 30, 2025, the Company recognized |
|
(8) |
In the trailing twelve months ended September 30, 2025, the Company recognized |
|
(9) |
In the trailing twelve months ended September 30, 2025, the Company recorded a |
|
(10) |
In the trailing twelve months ended September 30, 2025, the Company received proceeds of |
|
(11) |
A subsidiary in the Tempur Sealy North America business segment was accounted for as held for sale and designated as an unrestricted subsidiary under the 2023 Credit Agreement. Therefore, this subsidiary's financial results were excluded from the Company's adjusted financial measures for covenant compliance purposes. |
|
(12) |
The Company completed the Mattress Firm acquisition on February 5, 2025 and designated this subsidiary as restricted under the 2023 Credit Agreement. For covenant compliance purposes, the Company included |
|
(13) |
For the trailing twelve months ended September 30, 2025, the Company is permitted to include |
|
(14) |
The Company presents deferred financing costs as a direct reduction from the carrying amount of the related debt in the Condensed Consolidated Balance Sheets. For purposes of determining total debt for financial covenant purposes, the Company has added these costs back to total debt, net as calculated per the Condensed Consolidated Balance Sheets. |
|
(15) |
Netted cash includes cash and cash equivalents for domestic and foreign subsidiaries designated as restricted subsidiaries in the 2023 Credit Agreement. |
View original content:https://www.prnewswire.com/news-releases/somnigroup-international-inc-reports-record-third-quarter-results-302605931.html
SOURCE Somnigroup International
FAQ
What were Somnigroup (SGI) net sales and EPS for Q3 2025?
Why did SGI report a 63% sales increase in Q3 2025?
What guidance did Somnigroup (SGI) give for full-year 2025 adjusted EPS?
How leveraged is Somnigroup (SGI) after the Mattress Firm acquisition?
Did SGI return capital to shareholders after the Q3 2025 report?
How did Mattress Firm perform within SGI in Q3 2025?
