Somnigroup International Inc. Reports Record Third Quarter Results

Core Insights - Somnigroup International Inc. reported record financial results for Q3 2025, with significant increases in net sales and income, driven by strong operational execution and the acquisition of Mattress Firm [3][12][22] - The company raised its financial guidance for the full year 2025, anticipating adjusted EPS between $2.60 and $2.75 [14] Financial Summary - Net sales for Q3 2025 reached $2,122.6 million, a 63.3% increase from $1,300.0 million in Q3 2024 [3][12] - Net income increased by 36.5% to $177.4 million compared to $130.0 million in the same quarter last year [12] - Adjusted net income rose 37.5% to $201.4 million from $146.5 million year-over-year [12] - Earnings per share (EPS) grew 13.7% to $0.83, while adjusted EPS increased 15.9% to $0.95 [12] Business Segment Highlights - Mattress Firm generated net sales of $1,070.8 million in Q3 2025, all through the direct channel [4] - Tempur Sealy North America's net sales decreased to $736.1 million, impacted by the accounting elimination of $313.7 million of sales to Mattress Firm [6] - Tempur Sealy International's net sales increased by 10.9% to $315.7 million, driven by expanded distribution [9] Margin Analysis - Mattress Firm's gross margin was 34.4%, with an adjusted gross margin of 35.6% for Q3 2025 [5] - North America gross margin improved to 58.4% from 40.4% in Q3 2024, while adjusted gross margin rose to 58.6% [7] - International gross margin slightly declined to 49.1% from 49.5% in the previous year [10] Operating Performance - Consolidated operating income increased by 55.9% to $314.7 million compared to $201.8 million in Q3 2024 [12] - Adjusted operating income rose 53.6% to $343.7 million from $223.7 million year-over-year [12] - Corporate operating expenses decreased to $37.9 million from $43.2 million in Q3 2024 [11] Cash Flow and Debt - The company reported record cash flow from operations of $408 million [12] - Total debt at the end of Q3 2025 was $4.7 billion, with a leverage ratio of 3.28 times based on adjusted EBITDA [13] Dividend Declaration - The Board of Directors declared a quarterly cash dividend of $0.15 per share, payable on December 4, 2025 [16]