Somnigroup International Announces Second Quarter Results

August 7, 2025  by Karen Parrish in Business Strategy, Industry   

SECOND QUARTER 2025 FINANCIAL SUMMARY

- Total net sales increased 52.5% to $1,880.8 million as compared to $1,233.6 million in the second quarter of 2024, primarily driven by the inclusion of $948.8 million of Mattress Firm sales, offset by the accounting elimination of $263.5 million of sales from the Tempur Sealy North America segment to the Mattress Firm segment.

- Gross margin was 44.0% as compared to 42.0% in the second quarter of 2024. Adjusted gross margin⁽¹⁾ was 44.2% as compared to 42.0% in the second quarter of 2024.

- Operating income increased 3.8% to $179.9 million as compared to $173.3 million in the second quarter of 2024. Adjusted operating income⁽¹⁾ increased 24.3% to $224.4 million as compared to $180.6 million in the second quarter of 2024, primarily driven by the inclusion of Mattress Firm.

- Net income decreased 6.7% to $99.0 million as compared to $106.1 million in the second quarter of 2024. Adjusted net income⁽¹⁾ increased 1.3% to $113.1 million as compared to $111.7 million in the second quarter of 2024.

- Earnings per diluted share ("EPS") decreased 21.7% to $0.47 as compared to $0.60 in the second quarter of 2024. Adjusted EPS⁽¹⁾ decreased 15.9% to $0.53 as compared to $0.63 in the second quarter of 2024.

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."

Consolidated Financial Position

Consolidated net income decreased 6.7% to $99.0 million as compared to $106.1 million in the second quarter of 2024. Adjusted net income⁽¹⁾ increased 1.3% to $113.1 million as compared to $111.7 million in the second quarter of 2024. EPS decreased 21.7% to $0.47 as compared to $0.60 in the second quarter of 2024. Adjusted EPS⁽¹⁾ decreased 15.9% to $0.53 as compared to $0.63 in the second quarter of 2024, primarily driven by launch costs related to the new Sealy® product line and  a customer's acquisition which foreclosed distribution to this customer, offset by EPS accretion as a result of the Mattress Firm acquisition.

The Company ended the second quarter of 2025 with total debt of $5.0 billion and consolidated indebtedness less netted cash⁽¹⁾ of $4.9 billion. Leverage based on the ratio of consolidated indebtedness less netted cash⁽¹⁾ to adjusted EBITDA⁽¹⁾ was 3.56 times for the trailing twelve months ended June 30, 2025.

Financial Guidance
For the full year 2025, the Company raised its expectations for adjusted EPS⁽¹⁾ to a range of $2.40 to $2.70. This contemplates the Company's current sales outlook, which includes approximately 11 months of expected Mattress Firm operations, net of intercompany sales, and the previously announced divestiture of Sleep Outfitters and 73 Mattress Firm stores, which closed on May 1, 2025.

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 $0.15 per share, payable on September 5, 2025, to shareholders of record at the close of business on August 21, 2025.

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, 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.