Somnigroup International Announces Third Quarter Financial Results

November 6, 2025  by Karen Parrish in Business Strategy, Industry   

THIRD QUARTER 2025 FINANCIAL SUMMARY

Total net sales increased 63.3% to $2,122.6 million as compared to $1,300.0 million in the third quarter of 2024, primarily driven by the inclusion of $1,070.8 million of Mattress Firm sales, offset by the accounting elimination of $313.7 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 24.5% in the third quarter of 2024.

- Gross margin was 44.9% as compared to 42.4% in the third quarter of 2024. Adjusted gross margin⁽¹⁾ was 45.6% as compared to 43.2% in the third quarter of 2024.

- Operating income increased 55.9% to $314.7 million as compared to $201.8 million in the third quarter of 2024. Adjusted operating income⁽¹⁾ increased 53.6% to $343.7 million as compared to $223.7 million in the third quarter of 2024. Both were primarily driven by the inclusion of Mattress Firm and realized sales and cost synergies.

- Net income increased 36.5% to $177.4 million as compared to $130.0 million in the third quarter of 2024. Adjusted net income⁽¹⁾ increased 37.5% to $201.4 million as compared to $146.5 million in the third quarter of 2024.

- Earnings per diluted share ("EPS") increased 13.7% to $0.83 as compared to $0.73 in the third quarter of 2024. Adjusted EPS⁽¹⁾ increased 15.9% to $0.95 as compared to $0.82 in the third quarter of 2024.

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."

Consolidated Financial Position
Consolidated net income increased 36.5% to $177.4 million as compared to $130.0 million in the third quarter of 2024. Adjusted net income⁽¹⁾ increased 37.5% to $201.4 million as compared to $146.5 million in the third quarter of 2024. EPS increased 13.7% to $0.83 as compared to $0.73 in the third quarter of 2024. Adjusted EPS⁽¹⁾ increased 15.9% to $0.95 as compared to $0.82 in the third quarter of 2024.

The Company ended the third 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 3.28 times for the trailing twelve months ended September 30, 2025.

Financial Guidance
For the full year 2025, the Company raised its expectations for adjusted EPS⁽¹⁾ to a range of $2.60 to $2.75. 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.

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 December 4, 2025, to shareholders of record at the close of business on November 20, 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
The conference call webcast replay will remain available on the investor relations section of the Company's website for 30 days at investor.somnigroup.com.