Somnigroup International, Inc. Announces Financial Results for First Quarter

May 7, 2026  by Karen Parrish in Business Strategy, Industry   

FIRST QUARTER 2026 FINANCIAL SUMMARY

- Total net sales increased 12.3% to $1,801.5 million as compared to $1,604.7 million in the first quarter of 2025, primarily driven by the inclusion of Mattress Firm sales for a full quarter as compared to the first quarter of 2025, which included Mattress Firm for the period of February 5, 2025 through March 31, 2025.

- Gross margin was 43.1% as compared to 36.2% in the first quarter of 2025. Adjusted gross margin was 43.6% as compared to 42.2% in the first quarter of 2025.

- Operating income increased 1,317.4% to $187.1 million as compared to $13.2 million in the first quarter of 2025, which was negatively impacted by one-time transaction costs related to the Mattress Firm acquisition. Adjusted operating income increased 17.4% to $214.6 million as compared to $182.8 million in the first quarter of 2025.

- Net income increased 414.8% to $104.2 million as compared to net loss of $(33.1) million in the first quarter of 2025, which was negatively impacted by one-time transaction costs related to the Mattress Firm acquisition. Adjusted net income increased 28.4% to $124.5 million as compared to $97.0 million in the first quarter of 2025.

- Earnings per diluted share ("EPS") increased 388.2% to $0.49 as compared to loss per diluted share of $(0.17) in the first quarter of 2025, which was negatively impacted by one-time transaction costs related to the Mattress Firm acquisition. Adjusted EPS⁽¹⁾ increased 20.4% to $0.59 as compared to $0.49 in the first quarter of 2025.

Company Chairman and CEO Scott Thompson commented, "While navigating challenging market conditions, we delivered solid financial results this quarter, including a robust 20% increase in adjusted EPS. Our performance in this muted market environment reflects the strength of our business and our continued focus on operational discipline and supporting our customers. Our scale, trusted brands, and omnichannel capabilities provide a solid foundation to succeed and support long–term value creation."

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 increased 49.2% to $885.9 million as compared to $593.7 million in the first quarter of 2025, primarily driven by the inclusion of net sales for a full quarter as compared to the first quarter of 2025, which included Mattress Firm for the period of February 5, 2025 through March 31, 2025. All Mattress Firm sales are reported through the direct channel.

Mattress Firm gross margin was 30.8% as compared to 32.2% in the first quarter of 2025. Adjusted gross margin⁽¹⁾ declined 360 basis points to 31.5% as compared to 35.1% in the first quarter of 2025. These declines were primarily driven by investments in promotional expenses, product mix and fixed cost deleverage.

 

Mattress Firm operating margin was 3.8% as compared to 1.1% in the first quarter of 2025. Adjusted operating margin⁽¹⁾ declined 230 basis points to 4.9% as compared to 7.2% in the first quarter of 2025, primarily driven by the decline in gross margin and the inclusion of operating income for a full quarter as compared to the first quarter of 2025, which included Mattress Firm for the period of February 5, 2025 through March 31, 2025. These declines were partially offset by favorable co-operative advertising expense.

Tempur Sealy North America net sales decreased 20.2% to $563.5 million as compared to $706.2 million in the first quarter of 2025, primarily driven by the accounting elimination of sales to Mattress Firm. Net sales through the wholesale channel decreased $111.0 million, or 19.0%, to $473.5 million as compared to the first quarter of 2025, primarily driven by the accounting elimination of sales to Mattress Firm for a full quarter in 2026 as compared to the first quarter of 2025, which eliminated sales to Mattress Firm for the period of February 5, 2025 through March 31, 2025. Net sales through the direct channel decreased $31.7 million, or 26.0%, to $90.0 million as compared to the first quarter of 2025, primarily driven by a decrease in sales from the divestiture of Sleep Outfitters in the second quarter of 2025.

North America gross margin was 57.9% as compared to 34.0% in the first quarter of 2025. Adjusted gross margin⁽¹⁾ improved 1,300 basis points to 58.3% as compared to 45.3% in the first quarter of 2025. These improvements were primarily driven by the achievement of synergies, the elimination of sales to Mattress Firm, lower product launch costs and operational efficiencies.

North America operating margin was 23.4% as compared to 5.7% in the first quarter of 2025. Adjusted operating margin⁽¹⁾ improved 710 basis points to 24.3% as compared to 17.2% in the first quarter of 2025. These improvements were primarily driven by the improvement in gross margin and the impact of the Mattress Firm acquisition, partially offset by investments in co-operative advertising expense.

Tempur Sealy International net sales increased 15.5% to $352.1 million as compared to $304.8 million in the first quarter of 2025, primarily driven by strong performance in key markets. On a constant currency basis⁽¹⁾, International net sales increased 7.2% as compared to the first quarter of 2025. Net sales through the direct channel increased $29.8 million, or 15.6%, to $220.4 million as compared to the first quarter of 2025. Net sales through the wholesale channel increased $17.5 million, or 15.3%, to $131.7 million as compared to the first quarter of 2025.

International gross margin improved 140 basis points to 50.4% as compared to 49.0% in the first quarter of 2025. The improvement was primarily driven by favorable mix and operational efficiencies.

International operating margin improved 160 basis points to 18.4% as compared to 16.8% in the first quarter of 2025. The improvement was primarily driven by the improvement in gross margin and operating expense leverage. 

Corporate operating expense decreased to $42.9 million as compared to $85.0 million in the first quarter of 2025, primarily driven by decreased costs related to the Mattress Firm acquisition. Adjusted operating expense⁽¹⁾ was $30.6 million as compared to $32.8 million in the first quarter of 2025.

Consolidated Financial Position

Consolidated net income increased 414.8% to $104.2 million as compared to net loss of $(33.1) million in the first quarter of 2025. Adjusted net income⁽¹⁾ increased 28.4% to $124.5 million as compared to $97.0 million in the first quarter of 2025. EPS increased 388.2% to $0.49 as compared to loss per share of $(0.17) in the first quarter of 2025. Adjusted EPS⁽¹⁾ increased 20.4% to $0.59 as compared to $0.49 in the first quarter of 2025.

The Company ended the first quarter of 2026 with total debt of $4.6 billion and consolidated indebtedness less netted cash⁽¹⁾ of $4.5 billion. Leverage based on the ratio of consolidated indebtedness less netted cash⁽¹⁾ to adjusted EBITDA⁽¹⁾ was 3.07 times for the quarter ended March 31, 2026.

Financial Guidance

For the full year 2026, the Company currently expects adjusted EPS⁽¹⁾ to be between $3.00 to $3.40, which represents an approximate 19% increase from 2025 adjusted EPS⁽¹⁾ 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. 

Proposed Acquisition of Leggett & Platt

On April 13, 2026, the Company announced it has signed a definitive agreement to acquire Leggett & Platt, Incorporated ("Leggett & Platt"), a diversified component manufacturer, in an all-stock transaction valued at approximately $2.5 billion based on the closing price of Somnigroup International's common stock as of April 10, 2026 and inclusive of Leggett & Platt's existing indebtedness. The Company expects the transaction to close by year-end 2026, subject to the satisfaction of customary closing conditions, including approval by Leggett & Platt's shareholders and receipt of applicable regulatory approvals. A separate press release related to the announcement of this transaction can be found on the Company's investor relations website at investor.somnigroup.com. 

Dividend Declared

Today, the Company announced that its Board of Directors declared a quarterly cash dividend of $0.17 per share, payable on June 4, 2026 to shareholders of record at the close of business on May 21, 2026.

Conference Call Information

Somnigroup International Inc. will host a conference call to discuss financial results on May 7, 2026. 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.