Tempur Sealy(US:TPX)2025-11-07 12:03Financial Performance - Net sales for Q3 2025 reached $2,122.6 million, a 63.2% increase from $1,300.0 million in Q3 2024[16] - Gross profit for the nine months ended September 30, 2025, was $2,360.5 million, compared to $1,543.4 million for the same period in 2024, reflecting a 52.9% increase[16] - Operating income for Q3 2025 was $314.7 million, up from $201.8 million in Q3 2024, representing a 55.7% increase[16] - Net income attributable to Somnigroup International Inc. for Q3 2025 was $177.4 million, compared to $130.0 million in Q3 2024, marking a 36.5% increase[16] - The company reported a comprehensive income of $163.5 million for Q3 2025, slightly down from $167.0 million in Q3 2024[19] - For the three months ended September 30, 2025, net sales reached $2,122.6 million, a 63.2% increase from $1,300.0 million in the same period of 2024[48] - For the nine months ended September 30, 2025, net sales totaled $5,608.1 million, compared to $3,723.0 million for the same period in 2024, reflecting a 50.8% growth[49] Assets and Liabilities - Total assets increased to $11,399.5 million as of September 30, 2025, compared to $5,980.4 million at the end of 2024, indicating a 90.4% growth[21] - Long-term debt rose to $4,511.5 million as of September 30, 2025, up from $3,740.4 million at the end of 2024[21] - The company’s cash and cash equivalents decreased to $100.2 million from $117.4 million at the end of 2024[21] - As of September 30, 2025, the total stockholders' equity for Somnigroup International Inc. is $2,985.4 million, an increase from $2,841.1 million as of June 30, 2025[23] - The balance of additional paid-in capital as of September 30, 2025, is $1,028.7 million, reflecting an increase from $1,017.0 million as of June 30, 2025[23] - The company reported accrued expenses and other current liabilities of $749.6 million as of September 30, 2025, compared to $393.9 million as of December 31, 2024[88] Cash Flow and Investments - Net cash provided by operating activities increased to $700.7 million for the nine months ended September 30, 2025, compared to $537.4 million in 2024, reflecting a growth of about 30%[29] - The acquisition of Mattress Firm resulted in a net cash outflow of $2,824.5 million, significantly impacting cash flows from investing activities, which totaled $(2,948.4) million for the nine months ended September 30, 2025[29] - Proceeds from borrowings under long-term debt obligations increased to $3,429.9 million in 2025, compared to $1,165.3 million in 2024, marking a rise of approximately 194%[29] - The company’s cash, cash equivalents, and restricted cash decreased to $100.2 million as of September 30, 2025, down from $1,709.7 million at the end of 2024, a decline of about 94%[37] Acquisition of Mattress Firm - The acquisition of Mattress Firm, finalized on February 5, 2025, is expected to enhance the company's market share and operational synergies[9] - The acquisition of Mattress Firm Group Inc. was completed on February 5, 2025, for an aggregate purchase price of approximately $5.1 billion, net of cash acquired[50] - The Mattress Firm acquisition included $3.1 billion in cash and approximately 34.2 million shares of common stock valued at $65.65 per share[50] - The company expects the Mattress Firm acquisition to enhance its global omni-channel strategy and improve consumer experience[52] - The Mattress Firm Acquisition contributed revenue of $1,070.8 million and $2,613.3 million for the three and nine months ended September 30, 2025, respectively, with net income of $66.7 million and $119.8 million for the same periods[62] - The company incurred $50.2 million in transaction costs related to the Mattress Firm Acquisition during the nine months ended September 30, 2025, compared to $35.8 million in the same period of 2024[61] Expenses and Profitability - Selling and marketing expenses for Q3 2025 were $480.8 million, compared to $233.6 million in Q3 2024, reflecting a 105.5% increase[16] - The company reported a significant increase in depreciation and amortization expenses, rising to $180.0 million in 2025 from $121.9 million in 2024, an increase of approximately 48%[29] - Total stock-based compensation expense for the three months ended September 30, 2025, was $12.2 million, up from $8.6 million in 2024, and for the nine months ended September 30, 2025, it was $30.7 million compared to $27.3 million in 2024[89] - Basic earnings per common share for the three months ended September 30, 2025, was $0.85, an increase from $0.75 in 2024[94] Foreign Currency and Taxation - Foreign currency adjustments, net of tax, resulted in a gain of $37.0 million for the three months ended September 30, 2024, compared to a loss of $13.9 million for the same period in 2025[23][24] - The effective tax rate for the nine months ended September 30, 2025, was 14.9%, down from 23.4% in 2024[91] - The company expects no material impact from the OECD's proposed global minimum effective tax of 15.0% on its financial results in 2025[92] Inventory and Other Assets - Finished goods inventory increased to $501.4 million as of September 30, 2025, compared to $300.5 million at the end of 2024, representing a growth of approximately 67%[38] - The accrued warranty expense balance increased to $59.0 million as of September 30, 2025, up from $33.6 million at the end of 2024, reflecting a rise of approximately 76%[39] - The allowance for credit losses decreased to $42.6 million as of September 30, 2025, down from $80.4 million at the end of 2024, a reduction of about 47%[41] Debt and Compliance - As of September 30, 2025, total debt was $4,658.4 million, an increase from $3,844.5 million as of December 31, 2024[70] - The company was in compliance with all applicable debt covenants as of September 30, 2025[72] - The scheduled maturities of long-term debt outstanding total $4,558.0 million, with significant payments due in 2028 ($1,259.7 million) and thereafter[82]