Mattress Giant Somnigroup's Sales Soar, Profits Fluffier

Somnigroup International Inc. (NYSE:SGI) reported its third-quarter results on Thursday, which topped Wall Street expectations.

Somnigroup is a global bedding company operating in more than 100 countries through its businesses Tempur Sealy, Mattress Firm, and Dreams.

The company posted earnings of 95 cents per share, up from 82 cents a year earlier, and above analysts’ estimate of 86 cents. Net sales for the quarter rose 63.3% to $2.12 billion, beating estimates of $2.06 billion.

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Adjusted gross margin was 45.6%, up from 43.2% in the third quarter of 2024. Adjusted operating income rose 53.6% to $343.7 million, and Adjusted EBITDA rose to $418.9 million, up from $274.8 million in the prior-year period.

The company reported a record operating cash flow of $408 million for the period. Cash and cash equivalents totaled $100.2 million at the end of the period.

The company’s board of directors declared a quarterly cash dividend of 15 cents per share, payable on Dec. 4, 2025, to shareholders of record as of the close of business on Nov. 20, 2025.

Segment Performance

Somnigroup International’s Mattress Firm segment delivered net sales of $1.07 billion with an adjusted gross margin of 35.6% and an adjusted operating margin of 9.4%.

Tempur Sealy North America posted $736.1 million in sales, down from last year due to intercompany eliminations and divestitures, but margins improved sharply with an adjusted operating margin of 29.5%. Adjusted gross margin improved by 1,710 basis points to 58.6%.

Tempur Sealy International reported $315.7 million in sales, up 10.9%, up 7.2% on a constant-currency basis. Gross margin slipped 40 basis points to 49.1%, while operating margin edged down 10 basis points to 18.1%.

Corporate expenses declined to $37.9 million as compared to $43.2 million a year ago, primarily driven by decreased costs related to the Mattress Firm acquisition.

Outlook

The company raised its full-year 2025 adjusted EPS guidance to $2.60-$2.75, up from the prior range of $2.40-$2.70, compared with the analyst estimate of $2.57.

CEO Commentary

Company Chairman and CEO Scott Thompson commented, “We are pleased to report record sales, profits and operating cash flow in the third quarter, driven by strong operational execution across all of Somnigroup’s business units, augmented by progress on our acquisition-related sales and cost synergy initiatives.”

Price Action: SGI shares were trading higher by 9.94% to $87.51 at last check Thursday.

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