Somnigroup International Inc. Reports Second Quarter Results
Somnigroup International (NYSE:SGI) reported strong Q2 2025 results with net sales increasing 52.5% to $1.88 billion, primarily driven by the inclusion of $948.8 million from Mattress Firm acquisition. The company's gross margin improved to 44.0% from 42.0% year-over-year. Operating income rose 3.8% to $179.9 million, while net income decreased 6.7% to $99.0 million.
Direct sales significantly increased to 66% of net sales compared to 23% in the previous year. The company raised its full-year 2025 adjusted EPS guidance to $2.40-$2.70. The Board declared a quarterly dividend of $0.15 per share, payable on September 5, 2025.
The Mattress Firm integration is progressing ahead of plan, with both cost and sales synergies exceeding purchase assumptions. International business showed robust growth with net sales increasing 15.0% to $293.6 million.
Somnigroup International (NYSE:SGI) ha riportato solidi risultati nel secondo trimestre 2025 con un aumento delle vendite nette del 52,5% a 1,88 miliardi di dollari, principalmente grazie all'inclusione di 948,8 milioni di dollari derivanti dall'acquisizione di Mattress Firm. Il margine lordo dell'azienda è migliorato al 44,0% rispetto al 42,0% dell'anno precedente. Il reddito operativo è cresciuto del 3,8% a 179,9 milioni di dollari, mentre l'utile netto è diminuito del 6,7% a 99,0 milioni di dollari.
Le vendite dirette sono aumentate significativamente, rappresentando il 66% delle vendite nette rispetto al 23% dell'anno precedente. L'azienda ha rivisto al rialzo le previsioni per l'EPS rettificato dell'intero 2025, portandole a 2,40-2,70 dollari. Il Consiglio di Amministrazione ha dichiarato un dividendo trimestrale di 0,15 dollari per azione, con pagamento previsto per il 5 settembre 2025.
L'integrazione di Mattress Firm procede oltre i tempi previsti, con sinergie di costi e vendite superiori alle aspettative d'acquisto. Il business internazionale ha mostrato una crescita solida con vendite nette in aumento del 15,0% a 293,6 milioni di dollari.
Somnigroup International (NYSE:SGI) reportó sólidos resultados en el segundo trimestre de 2025 con un aumento de las ventas netas del 52,5% hasta 1.880 millones de dólares, impulsado principalmente por la inclusión de 948,8 millones de dólares provenientes de la adquisición de Mattress Firm. El margen bruto de la empresa mejoró al 44,0% desde el 42,0% interanual. El ingreso operativo aumentó un 3,8% hasta 179,9 millones de dólares, mientras que el ingreso neto disminuyó un 6,7% hasta 99,0 millones de dólares.
Las ventas directas aumentaron significativamente, representando el 66% de las ventas netas frente al 23% del año anterior. La compañía elevó su guía de BPA ajustado para todo el año 2025 a 2,40-2,70 dólares. La Junta declaró un dividendo trimestral de 0,15 dólares por acción, pagadero el 5 de septiembre de 2025.
La integración de Mattress Firm avanza por delante del plan, con sinergias de costos y ventas que superan las suposiciones de compra. El negocio internacional mostró un crecimiento sólido con ventas netas que aumentaron un 15,0% hasta 293,6 millones de dólares.
Somnigroup International (NYSE:SGI)는 2025년 2분기에 강력한 실적을 보고했으며, 순매출이 52.5% 증가하여 18억 8천만 달러를 기록했습니다. 이는 주로 Mattress Firm 인수로 인한 9억 4,880만 달러의 포함 덕분입니다. 회사의 총이익률은 전년 대비 42.0%에서 44.0%로 개선되었습니다. 영업이익은 3.8% 증가한 1억 7,990만 달러를 기록했으나, 순이익은 6.7% 감소한 9,900만 달러였습니다.
직접 판매 비중은 전년도의 23%에서 크게 증가하여 순매출의 66%를 차지했습니다. 회사는 2025년 전체 조정 주당순이익 가이던스를 2.40~2.70달러로 상향 조정했습니다. 이사회는 2025년 9월 5일에 지급 예정인 분기 배당금 주당 0.15달러를 선언했습니다.
Mattress Firm 통합은 계획보다 앞서 진행 중이며, 비용 및 매출 시너지 모두 인수 당시 예상치를 초과하고 있습니다. 국제 사업도 견고한 성장세를 보이며 순매출이 15.0% 증가한 2억 9,360만 달러를 기록했습니다.
Somnigroup International (NYSE:SGI) a publié de solides résultats pour le deuxième trimestre 2025, avec un chiffre d'affaires net en hausse de 52,5 % à 1,88 milliard de dollars, principalement grâce à l'inclusion de 948,8 millions de dollars issus de l'acquisition de Mattress Firm. La marge brute de l'entreprise s'est améliorée à 44,0 % contre 42,0 % l'année précédente. Le résultat d'exploitation a augmenté de 3,8 % à 179,9 millions de dollars, tandis que le résultat net a diminué de 6,7 % à 99,0 millions de dollars.
Les ventes directes ont considérablement augmenté, représentant 66 % du chiffre d'affaires net contre 23 % l'année précédente. La société a relevé ses prévisions de BPA ajusté pour l'ensemble de l'année 2025 à 2,40-2,70 dollars. Le conseil d'administration a déclaré un dividende trimestriel de 0,15 dollar par action, payable le 5 septembre 2025.
L'intégration de Mattress Firm progresse plus rapidement que prévu, avec des synergies de coûts et de ventes dépassant les hypothèses d'achat. L'activité internationale a affiché une croissance robuste avec un chiffre d'affaires net en hausse de 15,0 % à 293,6 millions de dollars.
Somnigroup International (NYSE:SGI) meldete starke Ergebnisse für das zweite Quartal 2025 mit einem Anstieg der Nettoumsätze um 52,5 % auf 1,88 Milliarden US-Dollar, hauptsächlich getrieben durch die Aufnahme von 948,8 Millionen US-Dollar aus der Übernahme von Mattress Firm. Die Bruttomarge des Unternehmens verbesserte sich von 42,0 % auf 44,0 % im Jahresvergleich. Das Betriebsergebnis stieg um 3,8 % auf 179,9 Millionen US-Dollar, während der Nettogewinn um 6,7 % auf 99,0 Millionen US-Dollar sank.
Der Direktvertrieb stieg deutlich auf 66 % des Nettoumsatzes im Vergleich zu 23 % im Vorjahr. Das Unternehmen hob seine Prognose für das bereinigte Ergebnis je Aktie für das Gesamtjahr 2025 auf 2,40–2,70 US-Dollar an. Der Vorstand erklärte eine Quartalsdividende von 0,15 US-Dollar pro Aktie, zahlbar am 5. September 2025.
Die Integration von Mattress Firm verläuft schneller als geplant, wobei sowohl Kosten- als auch Umsatzsynergien die Kaufannahmen übertreffen. Das internationale Geschäft zeigte ein robustes Wachstum mit einem Anstieg der Nettoumsätze um 15,0 % auf 293,6 Millionen US-Dollar.
- None.
- Net income decreased 6.7% to $99.0 million
- EPS declined 21.7% to $0.47 from $0.60
- High leverage with total debt of $5.0 billion and leverage ratio of 3.56x
- North America wholesale channel sales decreased by $320.8 million
- Lost $57.3 million in distribution due to customer acquisition
Insights
SGI shows strong revenue growth from Mattress Firm acquisition but diluted EPS declined despite operational improvements and raised guidance.
Somnigroup's Q2 results demonstrate the transformative impact of its Mattress Firm acquisition, with net sales surging
The company's profitability metrics tell a complex story. Gross margin improved to
The segment breakdown reveals interesting dynamics. The North America segment's sales declined substantially due to intercompany eliminations and lost distribution from a customer's acquisition, but its adjusted operating margin improved dramatically by 430 basis points to
Most notably, Somnigroup's shift toward direct-to-consumer sales has accelerated dramatically, with direct sales now representing
The company's leverage ratio stands at 3.56x, relatively high but manageable given the recent major acquisition. Management's decision to raise full-year adjusted EPS guidance to
The
- Second Quarter 2025 Net Sales Growth of
- Mattress Firm Combination Ahead of Plan
- Direct Sales as a Percent of Net Sales Increased to
- Raises Financial Guidance for Full Year 2025
SECOND QUARTER 2025 FINANCIAL SUMMARY
- Total net sales increased
52.5% to$1,880.8 million $1,233.6 million $948.8 million $263.5 million - Gross margin was
44.0% as compared to42.0% in the second quarter of 2024. Adjusted gross margin(1) was44.2% as compared to42.0% in the second quarter of 2024. - Operating income increased
3.8% to$179.9 million $173.3 million 24.3% to$224.4 million $180.6 million - Net income decreased
6.7% to$99.0 million $106.1 million 1.3% to$113.1 million $111.7 million - Earnings per diluted share ("EPS") decreased
21.7% to$0.47 $0.60 15.9% to$0.53 $0.63
KEY HIGHLIGHTS | |||||
(in millions, except percentages and per common share amounts) | Three Months Ended | % Reported | |||
June 30, 2025 | June 30, 2024 | ||||
Net sales | $ 1,880.8 | $ 1,233.6 | 52.5 % | ||
Net income | $ 99.0 | $ 106.1 | (6.7) % | ||
Adjusted net income (1) | $ 113.1 | $ 111.7 | 1.3 % | ||
EPS | $ 0.47 | $ 0.60 | (21.7) % | ||
Adjusted EPS (1) | $ 0.53 | $ 0.63 | (15.9) % | ||
Company Chairman and CEO Scott Thompson commented, "We are pleased to report another solid quarter of market outperformance, driven by the successful combination with Mattress Firm, the North American launch of our new Sealy line, and another quarter of robust sales growth for our international business. We have made significant progress on bringing Mattress Firm into Somnigroup. Teams are aligned and we are realizing both cost and sales synergies ahead of our purchase assumptions.
Across both our domestic and international businesses, we have strengthened our competitive position by leveraging the Company's core strengths - our exceptional people, powerful brands, expansive distribution network, best in class operational agility and robust manufacturing capabilities. We are delivering for all of our stakeholders, employees, customers, suppliers and shareholders."
Business Segment Highlights
The Company's business segments include Tempur Sealy North America, Tempur Sealy International and Mattress Firm. 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 a robust
International gross margin declined 40 basis points to
International operating margin improved 110 basis points to
Corporate operating expense increased to
Consolidated Financial Position
Consolidated net income decreased
The Company ended the second 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.
(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, August 7, 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
SOMNIGROUP INTERNATIONAL INC. AND SUBSIDIARIES Condensed Consolidated Statements of Income (in millions, except percentages and per common share amounts) (unaudited) | |||||||||||
Three Months Ended | Six Months Ended | ||||||||||
June 30, | Chg % | June 30, | Chg % | ||||||||
2025 | 2024 | 2025 | 2024 | ||||||||
Net sales | $ 1,880.8 | $ 1,233.6 | 52.5 % | $ 3,485.5 | $ 2,423.0 | 43.9 % | |||||
Cost of sales | 1,053.6 | 716.0 | 2,077.8 | 1,431.1 | |||||||
Gross profit | 827.2 | 517.6 | 59.8 % | 1,407.7 | 991.9 | 41.9 % | |||||
Selling and marketing expenses | 460.5 | 239.6 | 823.1 | 466.3 | |||||||
General, administrative and other expenses | 175.9 | 107.8 | 385.4 | 228.8 | |||||||
Loss on disposal of business | 13.9 | — | 13.9 | — | |||||||
Equity income in earnings of unconsolidated affiliates | (3.0) | (3.1) | (7.8) | (8.0) | |||||||
Operating income | 179.9 | 173.3 | 3.8 % | 193.1 | 304.8 | (36.6) % | |||||
Other expense, net: | |||||||||||
Interest expense, net | 72.5 | 33.4 | 133.8 | 67.7 | |||||||
Other expense (income), net | 4.7 | (0.6) | 5.9 | (0.9) | |||||||
Total other expense, net | 77.2 | 32.8 | 139.7 | 66.8 | |||||||
Income before income taxes | 102.7 | 140.5 | (26.9) % | 53.4 | 238.0 | (77.6) % | |||||
Income tax (provision) benefit | (3.2) | (34.0) | 13.3 | (54.7) | |||||||
Net income before non-controlling interest | 99.5 | 106.5 | (6.6) % | 66.7 | 183.3 | (63.6) % | |||||
Less: Net income attributable to non-controlling interest | 0.5 | 0.4 | 0.8 | 0.9 | |||||||
Net income attributable to Somnigroup International Inc. | $ 99.0 | $ 106.1 | (6.7) % | $ 65.9 | $ 182.4 | (63.9) % | |||||
Earnings per common share: | |||||||||||
Basic | $ 0.47 | $ 0.61 | (23.0) % | $ 0.33 | $ 1.05 | (68.6) % | |||||
Diluted | $ 0.47 | $ 0.60 | (21.7) % | $ 0.32 | $ 1.02 | (68.6) % | |||||
Weighted average common shares outstanding: | |||||||||||
Basic | 209.2 | 173.7 | 202.1 | 173.6 | |||||||
Diluted | 212.4 | 178.0 | 205.7 | 178.0 | |||||||
SOMNIGROUP INTERNATIONAL INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (in millions) | |||
June 30, 2025 | December 31, 2024 | ||
ASSETS | (unaudited) | ||
Current Assets: | |||
Cash and cash equivalents | $ 98.1 | $ 117.4 | |
Accounts receivable, net | 360.9 | 404.5 | |
Inventories | 709.6 | 447.0 | |
Prepaid expenses and other current assets | 219.4 | 96.5 | |
Total Current Assets | 1,388.0 | 1,065.4 | |
Restricted cash | — | 1,592.3 | |
Property, plant and equipment, net | 1,021.1 | 811.1 | |
Goodwill | 4,585.2 | 1,066.7 | |
Trade name and other intangible assets, net | 2,373.2 | 700.5 | |
Operating lease right-of-use assets | 1,840.3 | 598.8 | |
Deferred income taxes | 16.8 | 15.3 | |
Other non-current assets | 151.6 | 130.3 | |
Total Assets | $ 11,376.2 | $ 5,980.4 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current Liabilities: | |||
Accounts payable | $ 482.2 | $ 360.5 | |
Accrued expenses and other current liabilities | 692.0 | 393.9 | |
Short-term operating lease obligations | 377.3 | 126.8 | |
Current portion of long-term debt | 113.4 | 69.5 | |
Income taxes payable | 17.6 | 9.6 | |
Total Current Liabilities | 1,682.5 | 960.3 | |
Long-term debt, net | 4,803.3 | 3,740.4 | |
Long-term operating lease obligations | 1,550.0 | 532.1 | |
Deferred income taxes | 372.0 | 108.3 | |
Other non-current liabilities | 118.4 | 71.0 | |
Total Liabilities | 8,526.2 | 5,412.1 | |
Redeemable non-controlling interest | 8.9 | 9.3 | |
Total Stockholders' Equity | 2,841.1 | 559.0 | |
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders' Equity | $ 11,376.2 | $ 5,980.4 | |
SOMNIGROUP INTERNATIONAL INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (in millions) (unaudited) | |||
Six Months Ended | |||
June 30, | |||
2025 | 2024 | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income before non-controlling interest | $ 66.7 | $ 183.3 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 116.2 | 79.7 | |
Amortization of stock-based compensation | 18.5 | 18.7 | |
Amortization of deferred financing costs | 3.4 | 1.9 | |
Bad debt expense | 4.3 | 4.0 | |
Deferred income taxes | 1.1 | 0.2 | |
Dividends received from unconsolidated affiliates | 6.7 | 6.0 | |
Equity income in earnings of unconsolidated affiliates | (7.8) | (8.0) | |
Loss on disposal of business | 13.9 | — | |
Foreign currency adjustments and other | 4.4 | 0.5 | |
Changes in operating assets and liabilities, net of effect of business acquisitions | 65.1 | (5.5) | |
Net cash provided by operating activities | 292.5 | 280.8 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchases of property, plant and equipment | (60.7) | (60.0) | |
Acquisitions, net of cash acquired | (2,824.5) | — | |
Other | 7.1 | 0.3 | |
Net cash used in investing activities | (2,878.1) | (59.7) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from borrowings under long-term debt obligations | 2,677.1 | 869.0 | |
Repayments of borrowings under long-term debt obligations | (1,578.6) | (962.7) | |
Proceeds from exercise of stock options | 49.1 | 0.3 | |
Treasury stock repurchased | (132.4) | (43.8) | |
Dividends paid | (64.4) | (47.5) | |
Repayments of finance lease obligations and other | (10.6) | (10.3) | |
Net cash provided by (used in) financing activities | 940.2 | (195.0) | |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 33.8 | (5.2) | |
(Decrease) increase in cash, cash equivalents and restricted cash | (1,611.6) | 20.9 | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period | 1,709.7 | 74.9 | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period | $ 98.1 | $ 95.8 | |
Summary of Channel Sales
The following table highlights net sales information, by channel and by business segment, for the three months ended June 30, 2025 and 2024:
Three Months Ended June 30, | |||||||||||||||
(in millions) | Consolidated | Tempur Sealy North America | Tempur Sealy International | Mattress Firm | |||||||||||
2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | ||||||||
Wholesale (a) | $ 642.7 | $ 950.5 | $ 534.0 | $ 854.8 | $ 108.7 | $ 95.7 | $ — | $ — | |||||||
Direct (b) | 1,238.1 | 283.1 | 104.4 | 123.6 | 184.9 | 159.5 | 948.8 | — | |||||||
$ 1,880.8 | $ 1,233.6 | $ 638.4 | $ 978.4 | $ 293.6 | $ 255.2 | $ 948.8 | $ — | ||||||||
(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 June 30, 2025 and 2024:
Three Months Ended | |||
(in millions, except per share amounts) | June 30, 2025 | June 30, 2024 | |
Net income | $ 99.0 | $ 106.1 | |
Business combination charges (1) | 17.6 | — | |
Loss on disposal of business (2) | 13.9 | — | |
Disposition-related costs (3) | 9.2 | — | |
Transaction costs (4) | 4.9 | 7.3 | |
Supply chain transition costs (5) | 1.3 | — | |
Adjusted income tax provision (6) | (32.8) | (1.7) | |
Adjusted net income | $ 113.1 | $ 111.7 | |
Adjusted earnings per common share, diluted | $ 0.53 | $ 0.63 | |
Diluted shares outstanding | 212.4 | 178.0 | |
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 June 30, 2025.
2Q 2025 | |||||||||||||||||
(in millions, except percentages) | Consolidated | Margin | Tempur | Margin | Tempur | Margin | Mattress | Margin | Corporate | ||||||||
Net sales | $ 1,880.8 | $ 638.4 | $ 293.6 | $ 948.8 | $ — | ||||||||||||
Gross profit | $ 827.2 | 44.0 % | $ 348.2 | 54.5 % | $ 141.6 | 48.2 % | $ 337.4 | 35.6 % | $ — | ||||||||
Adjustments: | |||||||||||||||||
Disposition-related costs (3) | 3.7 | 2.3 | — | 1.4 | — | ||||||||||||
Supply chain transition costs (5) | 0.7 | 0.7 | — | — | — | ||||||||||||
Total adjustments | 4.4 | 3.0 | — | 1.4 | — | ||||||||||||
Adjusted gross profit | $ 831.6 | 44.2 % | $ 351.2 | 55.0 % | $ 141.6 | 48.2 % | $ 338.8 | 35.7 % | $ — | ||||||||
Operating income (expense) | $ 179.9 | 9.6 % | $ 130.1 | 20.4 % | $ 39.8 | 13.6 % | $ 63.2 | 6.7 % | $ (53.2) | ||||||||
Adjustments: | |||||||||||||||||
Business combination charges (1) | 17.6 | — | — | 2.2 | 15.4 | ||||||||||||
Loss on disposal of business (2) | 13.9 | 9.8 | — | 4.1 | — | ||||||||||||
Disposition-related costs (3) | 7.4 | 4.5 | — | 2.9 | — | ||||||||||||
Transaction costs (4) | 4.9 | — | — | 1.5 | 3.4 | ||||||||||||
Supply chain transition costs (5) | 0.7 | 0.7 | — | — | — | ||||||||||||
Total adjustments | 44.5 | 15.0 | — | 10.7 | 18.8 | ||||||||||||
Adjusted operating income (expense) | $ 224.4 | 11.9 % | $ 145.1 | 22.7 % | $ 39.8 | 13.6 % | $ 73.9 | 7.8 % | $ (34.4) | ||||||||
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 June 30, 2024:
2Q 2024 | |||||||||||||
(in millions, except percentages) | Consolidated | Margin | Tempur | Margin | Tempur | Margin | Corporate | ||||||
Net sales | $ 1,233.6 | $ 978.4 | $ 255.2 | $ — | |||||||||
Gross profit | $ 517.6 | 42.0 % | $ 393.7 | 40.2 % | $ 123.9 | 48.6 % | $ — | ||||||
Operating income (expense) | $ 173.3 | 14.0 % | $ 180.4 | 18.4 % | $ 31.8 | 12.5 % | $ (38.9) | ||||||
Adjustments: | |||||||||||||
Transaction costs (4) | 7.3 | — | — | 7.3 | |||||||||
Adjusted operating income (expense) | $ 180.6 | 14.6 % | $ 180.4 | 18.4 % | $ 31.8 | 12.5 % | $ (31.6) | ||||||
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 June 30, 2025 and 2024:
Three Months Ended | |||
(in millions) | June 30, 2025 | June 30, 2024 | |
Net income | $ 99.0 | $ 106.1 | |
Interest expense, net | 72.5 | 33.4 | |
Income tax provision | 3.2 | 34.0 | |
Depreciation and amortization | 69.1 | 50.6 | |
EBITDA | $ 243.8 | $ 224.1 | |
Adjustments: | |||
Business combination charges (1) | 17.6 | — | |
Loss on disposal of business (2) | 13.9 | — | |
Disposition-related costs (3) | 9.2 | — | |
Transaction costs (4) | 4.9 | 7.3 | |
Supply chain transition costs (5) | 1.3 | — | |
Adjusted EBITDA | $ 290.7 | $ 231.4 | |
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 June 30, 2025:
Trailing Twelve Months Ended | |
(in millions) | June 30, 2025 |
Net income | $ 267.8 |
Interest expense, net | 184.3 |
Transaction-related interest expense, net (7) | 16.6 |
Income tax provision | 50.6 |
Depreciation and amortization | 240.0 |
EBITDA | $ 759.3 |
Adjustments: | |
Acquisition-related costs (8) | 114.2 |
Transaction costs (4) | 82.5 |
Customer-related transition charges (9) | 26.7 |
Business combination charges (1) | 17.6 |
Supply chain transition costs (5) | 14.3 |
Loss on disposal of business (2) | 13.9 |
Disposition-related costs (3) | 9.2 |
Cybersecurity event (10) | (4.9) |
Adjusted EBITDA | $ 1,032.8 |
Loss from unrestricted subsidiary (11) | 6.2 |
Earnings from Mattress Firm prior to acquisition (12) | 223.4 |
Future cost synergies to be realized from Mattress Firm acquisition (13) | 100.0 |
Adjusted EBITDA per credit facility | $ 1,362.4 |
Consolidated indebtedness less netted cash | $ 4,853.5 |
Ratio of consolidated indebtedness less netted cash to adjusted EBITDA per credit facility | 3.56 times |
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 June 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 3.56 times for the trailing twelve months ended June 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 June 30, 2025. "Consolidated Indebtedness" and "Netted Cash" are terms used in the 2023 Credit Agreement for purposes of certain financial covenants.
(in millions) | June 30, 2025 |
Total debt, net | $ 4,916.7 |
Plus: Deferred financing costs (14) | 34.9 |
Consolidated indebtedness | 4,951.6 |
Less: Netted cash (15) | 98.1 |
Consolidated indebtedness less netted cash | $ 4,853.5 |
Please refer to Footnotes at the end of this release. |
Footnotes:
(1) | In the second quarter of 2025, the Company recorded |
(2) | In the second quarter of 2025, the Company recorded a |
(3) | In the second quarter of 2025, the Company recorded |
(4) | In the second quarter of 2025, the Company recorded |
(5) | In the second quarter of 2025, the Company recorded |
(6) | Adjusted income tax provision represents the tax effects associated with the aforementioned items and certain tax benefits associated with share-based compensation. |
(7) | In the trailing twelve months ended June 30, 2025, the Company incurred |
(8) | In the trailing twelve months ended June 30, 2025, the Company recognized |
(9) | In the trailing twelve months ended June 30, 2025, the Company recognized |
(10) | In the trailing twelve months ended June 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 June 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-second-quarter-results-302523621.html
SOURCE Somnigroup International
FAQ
What were Somnigroup's (SGI) Q2 2025 earnings results?
How much did Mattress Firm contribute to SGI's Q2 2025 revenue?
What is SGI's guidance for full year 2025?
What is SGI's current dividend payment?
How much debt does Somnigroup currently have?
How did SGI's international business perform in Q2 2025?
