Somnigroup International Announces Financial Results for Third Quarter

November 9, 2026  by Karen Parrish in Business Strategy, Industry   

On August 26, 2026, the Company completed its previously announced acquisition of Leggett & Platt, Incorporated. The Company's 2026 third quarter financials include Leggett & Platt's operations for the period from August 26, 2026 through September 30, 2026.

THIRD QUARTER 2026 FINANCIAL SUMMARY

- Total net sales increased 10.8% to a record $2,350.8 million as compared to $2,122.6 million in the third quarter of 2025, primarily driven by the inclusion of $372.6 million of Leggett & Platt net sales for the stub period.

- Gross margin was 42.0% as compared to 44.9% in the third quarter of 2025. Adjusted gross margin⁽¹⁾ was 43.0% as compared to 45.6% in the third quarter of 2025.

- Operating income decreased 5.5% to $297.4 million as compared to $314.7 million in the third quarter of 2025, primarily driven by costs incurred during the quarter related to the Leggett & Platt acquisition. Adjusted operating income⁽¹⁾ increased 6.0% to a record $364.2 million as compared to $343.7 million in the third quarter of 2025.

- Net income decreased 7.8% to $163.5 million as compared to $177.4 million in the third quarter of 2025. Adjusted net income⁽¹⁾ increased 13.7% to a record $228.9 million as compared to $201.4 million in the third quarter of 2025.

- Earnings per diluted share ("EPS") decreased 10.8% to $0.74 as compared to $0.83 in the third quarter of 2025. Adjusted EPS⁽¹⁾ increased 9.5% to a record $1.04 as compared to $0.95 in the third quarter of 2025.

- Leverage based on the ratio of consolidated indebtedness less netted cash⁽¹⁾ to adjusted EBITDA⁽¹⁾ was 2.69 times for the trailing twelve months ended September 30, 2026 compared to 3.28 times for the trailing twelve months ended September 30, 2025.

Company Chairman and CEO Scott Thompson commented, "While executing our strategy in a challenging macroeconomic environment, we delivered strong third-quarter GAAP EPS and record adjusted EPS, reflecting the resilience of our business and our global team. During the quarter, we completed the Leggett & Platt acquisition, improving our leverage, enhancing our supply chain and accelerating product development. We also invested in our brand portfolio, with upcoming launches to support retail partners and reinforce our global leadership. We believe these actions enhance our competitive position and provide a solid foundation for long-term value creation."

Business Segment Highlights

The Company's business segments include Mattress Firm, Leggett & Platt (acquired on August 26, 2026), 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 decreased 5.8% to $1,008.3 million as compared to $1,070.8 million in the third quarter of 2025, primarily driven by softer online sales. Mattress Firm same store sales were down slightly as compared to the third quarter of 2025. All Mattress Firm sales are reported through the direct bedding channel.

Mattress Firm gross margin was 34.4%, consistent with the third quarter of 2025. Adjusted gross margin⁽¹⁾ declined 100 basis points to 34.6% as compared to 35.6% in the third quarter of 2025. Gross margin results were primarily driven by investments in Mattress Firm's stores and consumer financing costs, partially offset by the achievement of cost synergies.

Mattress Firm operating margin was 9.4% as compared to 7.6% in the third quarter of 2025. Adjusted operating margin⁽¹⁾ improved 20 basis points to 9.6% as compared to 9.4% in the third quarter of 2025. These improvements were primarily driven by favorable co-operative advertising expense, partially offset by the decline in adjusted gross margin.

Leggett & Platt net sales were $372.6 million for the stub period, with $271.3 million reported in the wholesale bedding and furnishings channel and $101.3 million reported in the specialized products channel.

Leggett & Platt gross margin was 17.7% for the stub period. Adjusted gross margin⁽¹⁾ was 21.9% for the stub period.

Leggett & Platt operating margin was 5.6% for the stub period. Adjusted operating margin⁽¹⁾ was 11.0% for the stub period.

Tempur Sealy North America net sales decreased 5.8% to $693.1 million as compared to $736.1 million in the third quarter of 2025, primarily driven by market conditions. Net sales through the wholesale bedding and furnishings channel decreased $44.9 million, or 7.2%, to $581.5 million as compared to the third quarter of 2025. Reported net sales through the direct bedding channel increased $1.9 million, or 1.7%, to $111.6 million as compared to the third quarter of 2025.

North America gross margin was 64.7% as compared to 58.4% in the third quarter of 2025. Adjusted gross margin⁽¹⁾ improved 690 basis points to 65.5% as compared to 58.6% in the third quarter of 2025. These improvements were primarily driven by tariff refunds and the achievement of synergies from the Mattress Firm acquisition. These improvements were partially offset by inflation.

North America operating margin was 33.2% as compared to 29.1% in the third quarter of 2025. Adjusted operating margin⁽¹⁾ improved 450 basis points to 34.0% as compared to 29.5% in the third quarter of 2025. These improvements were primarily driven by the improvement in gross margin, partially offset by investments in co-operative advertising expense.

Tempur Sealy International net sales decreased 12.3% to $276.8 million as compared to $315.7 million in the third quarter of 2025, primarily driven by decreased net sales at Dreams of 34.7% following the implementation of a new ERP system, leading to operational disruption throughout the third quarter, amid challenging market conditions. Tempur Sealy International (excluding Dreams) grew high single digits as compared to the third quarter of 2025. On a constant currency basis⁽¹⁾, International net sales decreased 11.7% as compared to the third quarter of 2025. Net sales through the direct bedding channel decreased $42.9 million, or 21.2%, to $159.9 million as compared to the third quarter of 2025. Net sales through the wholesale bedding and furnishings channel increased $4.0 million, or 3.5%, to $116.9 million as compared to the third quarter of 2025.

International gross margin declined 360 basis points to 45.5% as compared to 49.1% in the third quarter of 2025. The decline was primarily driven by temporary deleverage at Dreams and mix.

International operating margin declined 870 basis points to 9.4% as compared to 18.1% in the third quarter of 2025. The decline was primarily driven by operating expense deleverage and the decline in gross margin.

Corporate operating expense increased to $74.2 million as compared to $37.9 million in the third quarter of 2025, primarily driven by costs related to the Leggett & Platt acquisition. Adjusted operating expense⁽¹⁾ was $34.6 million as compared to $31.1 million in the third quarter of 2025.

Consolidated Financial Position

Consolidated net income decreased 7.8% to $163.5 million as compared to $177.4 million in the third quarter of 2025. Adjusted net income⁽¹⁾ increased 13.7% to a record $228.9 million as compared to $201.4 million in the third quarter of 2025. EPS decreased 10.8% to $0.74 as compared to $0.83 in the third quarter of 2025. Adjusted EPS⁽¹⁾ increased 9.5% to a record $1.04 as compared to $0.95 in the third quarter of 2025.

The Company ended the third quarter of 2026 with total debt of $5.6 billion and consolidated indebtedness less netted cash⁽¹⁾ of $5.0 billion. Leverage based on the ratio of consolidated indebtedness less netted cash⁽¹⁾ to adjusted EBITDA⁽¹⁾ was 2.69 times for the trailing twelve months ended September 30, 2026.

Financial Guidance

For the full year 2026, the Company revised its expectations for adjusted EPS to a range of $2.85 to $2.95, which represents an approximate 7% 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, uncertainties arising from global and geo-political events (including the war in Ukraine and the war in the Middle East) and any related effect on pricing, sales and supply of materials, labor costs and other employment-related costs, 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 Declared

The Company announced that its Board of Directors declared a quarterly cash dividend of $0.17 per share, payable on December 7, 2026 to shareholders of record at the close of business on November 23, 2026.

Conference Call Information

Somnigroup International Inc. hosted a live conference call to discuss financial results on Nov. 9. The call was webcast and was accessed on the Company's investor relations website at http://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.