Somnigroup International Inc. Reports Second Quarter Results

Core Insights - Somnigroup International Inc. reported strong financial results for Q2 2025, with net sales increasing by 52.5% year-over-year to $1,880.8 million, driven by the acquisition of Mattress Firm and robust international sales growth [3][13][14] - The company raised its financial guidance for the full year 2025, anticipating adjusted EPS in the range of $2.40 to $2.70 [16] Financial Performance - Net sales for Q2 2025 reached $1,880.8 million, up from $1,233.6 million in Q2 2024 [3][13] - Net income decreased by 6.7% to $99.0 million compared to $106.1 million in the same quarter last year [3][14] - Adjusted net income increased by 1.3% to $113.1 million from $111.7 million year-over-year [3][14] - Earnings per diluted share (EPS) fell by 21.7% to $0.47, while adjusted EPS decreased by 15.9% to $0.53 [3][14] Business Segments - Mattress Firm generated net sales of $948.8 million in Q2 2025, with a gross margin of 35.6% [5][6] - Tempur Sealy North America reported net sales of $638.4 million, a decrease from $978.4 million in Q2 2024, primarily due to the accounting elimination of $263.5 million in sales to Mattress Firm [7][10] - Tempur Sealy International saw a 15.0% increase in net sales to $293.6 million, driven by successful new product launches [10][11] Operational Highlights - The company achieved a gross margin of 44.0% in Q2 2025, up from 42.0% in Q2 2024, with adjusted gross margin improving to 44.2% [13][14] - North America operating margin improved to 20.4%, with adjusted operating margin increasing to 22.7% [9][14] - Corporate operating expenses rose to $53.2 million, primarily due to business combination charges related to the Mattress Firm acquisition [12][14] Debt and Financial Guidance - As of June 30, 2025, total debt stood at $5.0 billion, with consolidated indebtedness less netted cash at $4.9 billion [15][48] - The leverage ratio based on consolidated indebtedness less netted cash to adjusted EBITDA was 3.56 times for the trailing twelve months [15][48] - The company anticipates approximately 11 months of expected Mattress Firm operations in its financial outlook for 2025 [16] Dividend Declaration - The Board of Directors declared a quarterly cash dividend of $0.15 per share, payable on September 5, 2025 [18]