Somnigroup International Announces Financial Results for Fourth Quarter & Year End

February 17, 2026  by Karen Parrish in Business Strategy, Industry   

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.

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
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%."

Conference Call Information
Somnigroup International Inc. will host a live conference call to discuss financial results Feb 17. After the conference call, a webcast replay will remain available on the investor relations section of the Company's website for 30 days.