SOMNIGROUP INTERNATIONAL INC.
For the period ended Sep 30, 2025. Filed Nov 7, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 7, 2025
SGI$64.17-5.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-08.
0001206264-25-000168
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-07.
0001206264-25-000194
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 155 previous paragraphs and 155 current paragraphs.
86 unchanged; 64 reworded; 5 added; 4 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 27 previous and 27 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
•Net income increased 36.5% to $177.4 million as compared to $130.0 million in the third quarter of 2024. Adjusted net income, which is a non-GAAP financial measure, increased 37.5% to $201.4 million as compared to $146.5 million in the third quarter of 2024.
Current report
•Corporate operating expenses decreased $5.3 million, or 12.3%. The decrease in operating expenses was primarily driven by decreased costs related to the Mattress Firm Acquisition.
Current report
•Mattress Firm operating income was $81.2 million and operating margin was 7.6% for the three months ended September 30, 2025.
Current report
NINE MONTHS ENDED SEPTEMBER 30, 2024
Current report
•Corporate operating expenses increased $46.3 million, or 35.7%. The increase in operating expenses was primarily driven by increased costs related to the Mattress Firm Acquisition.
Removed paragraphs (4)
Previous report
•Net income decreased 6.7% to $99.0 million as compared to $106.1 million in the second quarter of 2024. Adjusted net income, which is a non-GAAP financial measure, increased 1.3% to $113.1 million as compared to $111.7 million in the second quarter of 2024.
Previous report
•Corporate operating expenses increased $14.3 million, or 36.8%. The increase in operating expenses was primarily driven by business combination charges related to the Mattress Firm Acquisition.
Previous report
SIX MONTHS ENDED JUNE 30, 2024
Previous report
•Corporate operating expenses increased $51.6 million, or 59.6%. The increase in operating expenses was primarily driven by business combination charges related to the Mattress Firm Acquisition.
Reworded paragraphs (64)
Previous wording
In this discussion and analysis, we discuss and explain the consolidated financial condition and results of operations for the three and six months ended June 30, 2025, including the following topics:
Current wording
In this discussion and analysis, we discuss and explain the consolidated financial condition and results of operations for the three and nine months ended September 30, 2025, including the following topics:
Previous wording
We believe the bedding industry is structured for sustained growth, driven by product innovation, sleep technology advancements, consumer confidence, housing formations and population growth. The industry is no longer engaged in uneconomical retail store expansion, startups have shifted from uneconomical strategies to becoming profitable and legacy retailers and manufacturers have become skilled in producing profitable online sales.
Current wording
We believe the bedding industry is structured for sustained growth, driven by product innovation, sleep technology advancements, consumer confidence, housing formations and population growth. In our opinion, the industry is no longer engaged in uneconomical retail store expansion, startups have shifted from uneconomical strategies to becoming profitable and legacy retailers and manufacturers have become skilled in producing profitable online sales.
Previous wording
The global bedding industry was challenged in 2024 due to certain macroeconomic pressures on the consumer, and we expect these pressures to continue throughout 2025. Ongoing geopolitical conflicts, including trade disputes and the imposition of tariffs, may also introduce further uncertainty for the consumer. We have taken actions to mitigate the impact of proposed tariffs, and we implemented pricing actions to mitigate the remaining impact. The majority of our products sold are also manufactured in the U.S. Accordingly, we believe proposed tariffs will not have a material impact on our results of operations in 2025. However, the duration and extent of tariffs remain uncertain, and we are continuing to evaluate the potential future impacts of the imposition of tariffs. We expect to outperform the bedding industry as a result of our investments in new product launches and continued investments in innovation, quality, advertising and customer service.
Current wording
The global bedding industry was challenged in 2024 due to certain macroeconomic pressures on the consumer, which have continued during 2025. Ongoing geopolitical conflicts, including trade disputes and the imposition of tariffs, along with the U.S. government shutdown, may also introduce further uncertainty for the consumer. We have taken actions to mitigate the impact of proposed tariffs, and we implemented pricing actions to mitigate the remaining impact. The majority of our products sold are also manufactured in the U.S. Accordingly, we believe proposed tariffs will not have a material impact on our results of operations in 2025. However, the duration and extent of tariffs remain uncertain, and we are continuing to evaluate the potential future impacts of the imposition of tariffs. We expect to outperform the bedding industry as a result of our investments in new product launches and continued investments in innovation, quality, advertising and customer service.
Previous wording
Mattress Firm operates as a separate business segment. Mattress Firm's financial results for the periods from April 1, 2025 through June 30, 2025 and February 5, 2025 through June 30, 2025 (the "stub period") are included in the Company's Condensed Consolidated Financial Statements for the three and six months ended June 30, 2025, respectively.
Current wording
Mattress Firm operates as a separate business segment. Mattress Firm's financial results for the periods from July 1, 2025 through September 30, 2025 and February 5, 2025 through September 30, 2025 (the "stub period") are included in the Company's Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2025, respectively.
Previous wording
On May 1, 2025, we completed the previously announced divestiture of 73 Mattress Firm retail locations and our Sleep Outfitters subsidiary, which includes 103 specialty mattress retail locations and seven distribution centers, to MW SO Holdings Company, LLC ("Mattress Warehouse"). In the three months ended June 30, 2025, the Company recorded a $13.9 million loss on disposal of business associated with the divestiture, net of proceeds of $9.0 million. We do not expect the divestiture to have a material impact on our results of operations for the twelve months ended December 31, 2025.
Current wording
On May 1, 2025, we completed the previously announced divestiture of 73 Mattress Firm retail locations and our Sleep Outfitters subsidiary, which includes 103 specialty mattress retail locations and seven distribution centers, to MW SO Holdings Company, LLC ("Mattress Warehouse"). In the nine months ended September 30, 2025, the Company recorded a $13.9 million loss on disposal of business associated with the divestiture, net of proceeds of $9.0 million. We do not expect the divestiture to have a material impact on our results of operations for the twelve months ended December 31, 2025.
Previous wording
•Total net sales increased 52.5% to $1,880.8 million as compared to $1,233.6 million in the second quarter of 2024, primarily driven by the inclusion of $948.8 million of Mattress Firm sales for the quarter, offset by the elimination of $263.5 million of sales from the Tempur Sealy North America segment to the Mattress Firm segment.
Current wording
•Total net sales increased 63.3% to $2,122.6 million as compared to $1,300.0 million in the third quarter of 2024, primarily driven by the inclusion of $1,070.8 million of Mattress Firm sales for the quarter, offset by the elimination of $313.7 million of sales from the Tempur Sealy North America segment to the Mattress Firm segment.
Previous wording
•Gross margin was 44.0% as compared to 42.0% in the second quarter of 2024. Adjusted gross margin, which is a non-GAAP financial measure, was 44.2% as compared to 42.0% in the second quarter of 2024.
Current wording
•Gross margin was 44.9% as compared to 42.4% in the third quarter of 2024. Adjusted gross margin, which is a non-GAAP financial measure, was 45.6% as compared to 43.2% in the third quarter of 2024.
Previous wording
•Operating income increased 3.8% to $179.9 million as compared to $173.3 million in the second quarter of 2024. Adjusted operating income, which is a non-GAAP financial measure, increased 24.3% to $224.4 million as compared to $180.6 million in the second quarter of 2024, primarily driven by the inclusion of Mattress Firm.
Current wording
•Operating income increased 55.9% to $314.7 million as compared to $201.8 million in the third quarter of 2024. Adjusted operating income, which is a non-GAAP financial measure, increased 53.6% to $343.7 million as compared to $223.7 million in the third quarter of 2024. Both were primarily driven by the inclusion of Mattress Firm.
Previous wording
•Earnings per diluted share ("EPS") decreased 21.7% to $0.47 as compared to $0.60 in the second quarter of 2024. Adjusted EPS, which is a non-GAAP financial measure, decreased 15.9% to $0.53 as compared to $0.63 in the second quarter of 2024.
Current wording
•Earnings per diluted share ("EPS") increased 13.7% to $0.83 as compared to $0.73 in the third quarter of 2024. Adjusted EPS, which is a non-GAAP financial measure, increased 15.9% to $0.95 as compared to $0.82 in the third quarter of 2024.
Previous wording
Net sales increased 52.5%, and on a constant currency basis increased 51.7%. The change in net sales was driven by the following:
Current wording
Net sales increased 63.3%, and on a constant currency basis increased 62.5%. The change in net sales was driven by the following:
Previous wording
•Tempur Sealy North America net sales decreased $340.0 million, or 34.8%. Net sales in the Wholesale channel decreased $320.8 million, primarily driven by a 30.8% decline from the elimination of intercompany sales to Mattress Firm of $263.5 million, and a 6.7% decrease in sales of $57.3 million, primarily driven by a customer's acquisition which foreclosed distribution to this customer. Net sales in the Direct channel decreased $19.2 million, or 15.5%, primarily driven by a decrease in sales due to the divestiture of Sleep Outfitters.
Current wording
•Tempur Sealy North America net sales decreased $279.2 million, or 27.5%. Net sales in the Wholesale channel decreased $252.0 million, primarily driven by a 35.7% decline from the elimination of intercompany sales to Mattress Firm of $313.7 million, offset by a 7.0% increase in net sales of $61.7 million, primarily driven by growth at third-party retailers. Net sales in the Direct channel decreased $27.2 million, or 19.9%, primarily driven by a decrease in sales from the divestiture of Sleep Outfitters.
Previous wording
•Tempur Sealy International net sales increased $38.4 million, or 15.0%, primarily driven by the success of new product launches. On a constant currency basis, International net sales increased 10.0%. Net sales in the Wholesale channel increased 10.2% on a constant currency basis. Net sales in the Direct channel increased 9.8% on a constant currency basis.
Current wording
•Tempur Sealy International net sales increased $31.0 million, or 10.9%, primarily driven by expanded distribution. On a constant currency basis, International net sales increased 7.2%. Net sales in the Wholesale channel increased 6.1% on a constant currency basis. Net sales in the Direct channel increased 7.8% on a constant currency basis.
Previous wording
•Mattress Firmnet sales were $948.8 million for the three months ended June 30, 2025.
Current wording
•Mattress Firmnet sales were $1,070.8 million for the three months ended September 30, 2025.
Previous wording
Gross margin improved 200 basis points. The primary drivers of changes in gross margin by segment are discussed below:
Current wording
Gross margin improved 250 basis points. The primary drivers of changes in gross margin by segment are discussed below:
Previous wording
•Tempur Sealy North America gross margin improved 1,430 basis points. The improvement in gross margin was primarily driven by the elimination of sales to Mattress Firm of 1,590 basis points and operational efficiencies of 60 basis points. These improvements were partially offset by expense deleverage of 130 basis points and product launch costs.
Current wording
•Tempur Sealy North America gross margin improved 1,800 basis points. The improvement in gross margin was primarily driven by the elimination of sales to Mattress Firm of 1,740 basis points, operational efficiencies of 50 basis points and fixed cost absorption. These improvements were partially offset by unfavorable mix of 80 basis points.
Previous wording
•Tempur Sealy International gross margin declined 40 basis points. The decline in gross margin was primarily driven by commodity cost inflation.
Current wording
•Tempur Sealy International gross margin declined 40 basis points. The decline in gross margin was primarily driven by unfavorable mix of 60 basis points, partially offset by operational efficiencies.
Previous wording
•Mattress Firm gross margin was 35.6% for the three months ended June 30, 2025.
Current wording
•Mattress Firm gross margin was 34.4% for the three months ended September 30, 2025.
Previous wording
Operating expenses increased $289.0 million, or 83.2%, and increased 560 basis points as a percentage of net sales. The primary drivers of changes in operating expenses by segment are explained below:
Current wording
Operating expenses increased $289.0 million, or 82.1%, and increased 310 basis points as a percentage of net sales. The primary drivers of changes in operating expenses by segment are explained below:
Previous wording
•Tempur Sealy North America operating expenses decreased $5.0 million, or 2.3%, and increased 1,080 basis points as a percentage of net sales. The decrease in operating expenses was primarily driven by decreases in other selling and marketing and general, administrative and other expenses, partially offset by investments in advertising.
Current wording
•Tempur Sealy North America operating expenses decreased $2.1 million, or 1.0%, and increased 780 basis points as a percentage of net sales. The decrease in operating expenses was primarily driven by decreases in general, administrative and other expenses and other selling and marketing, partially offset by investments in advertising.
Previous wording
•Tempur Sealy International operating expenses increased $9.6 million, or 10.1%, and decreased 160 basis points as a percentage of net sales. The increase in operating expenses was primarily driven by investments in growth initiatives.
Current wording
•Tempur Sealy International operating expenses increased $9.5 million, or 10.4%, and decreased 10 basis points as a percentage of net sales. The increase in operating expenses was primarily driven by investments in growth initiatives.
Previous wording
•Mattress Firm operating expenses were $270.1 million for the three months ended June 30, 2025.
Current wording
•Mattress Firm operating expenses were $286.9 million for the three months ended September 30, 2025.
Previous wording
Research and development expenses for the three months ended June 30, 2025 were $7.8 million, compared to $7.7 million for the three months ended June 30, 2024.
Current wording
Research and development expenses for the three months ended September 30, 2025 were $8.8 million, compared to $7.0 million for the three months ended September 30, 2024, an increase of $1.8 million, or 25.7%.
Previous wording
Operating income increased $6.6 million and operating margin declined 440 basis points. The primary drivers of changes in operating income and operating margin by segment are discussed below:
Current wording
Operating income increased $112.9 million and operating margin declined 70 basis points. The primary drivers of changes in operating income and operating margin by segment are discussed below:
Previous wording
•Tempur Sealy North America operating income decreased $144.4 million and operating margin declined 400 basis points. The decline in operating margin was primarily driven by operating expense deleverage of 820 basis points, offset by the improvement in gross margin of 480 basis points. Additionally, we incurred a $9.8 million loss on disposal of business associated with the divestiture of Sleep Outfitters.
Current wording
•Tempur Sealy North America operating income increased $21.1 million and operating margin improved 1,010 basis points. The improvement in operating margin was primarily driven by the improvement in gross margin of 1,800 basis points, partially offset by operating expense deleverage of 780 basis points.
Previous wording
•Tempur Sealy International operating income increased $8.0 million and operating margin improved 110 basis points. The improvement in operating margin was driven by operating expense leverage of 160 basis points, partially offset by the decline in gross margin of 40 basis points and Asia joint venture performance.
Current wording
•Tempur Sealy International operating income increased $5.3 million and operating margin declined 10 basis points. The decline in operating margin was driven by decline in gross margin of 40 basis points, offset by operating expense leverage.
Previous wording
•Corporate operating expenses increased $51.6 million, which negatively impacted our consolidated operating margin.
Current wording
•Corporate operating expenses decreased $5.3 million, which positively impacted our consolidated operating margin.
Previous wording
Interest expense, net, increased $39.1 million, or 117.1%. The increase in interest expense, net, was primarily driven by increased average levels of outstanding variable rate debt.
Current wording
Interest expense, net, increased $39.1 million, or 126.9%. The increase in interest expense, net, was primarily driven by increased average levels of outstanding variable rate debt.
Previous wording
Our income tax provision decreased $30.8 million driven by certain discrete items, as discussed below, and a decrease in income before income taxes. Our effective tax rate for the three months ended June 30, 2025 as compared to the prior year declined by 2,110 basis points. The effective tax rate as compared to the U.S. federal statutory rate for the three months ended June 30, 2025 included the favorable impact of the deductibility of stock compensation in the U.S. and a net unfavorable impact of other discrete items. The effective tax rate as compared to the U.S. federal statutory rate for the three months ended June 30, 2024 included a net favorable impact of other discrete items.
Current wording
Our income tax provision increased $15.4 million due to an increase in income before income taxes. Our effective tax rate for the three months ended September 30, 2025 as compared to the prior year increased by 10 basis points. The effective tax rates as compared to the U.S. federal statutory rate for the three months ended September 30, 2025 and 2024 included a net favorable impact of other discrete items.
Previous wording
SIX MONTHS ENDED JUNE 30, 2025 COMPARED TO THE
Current wording
NINE MONTHS ENDED SEPTEMBER 30, 2025 COMPARED TO THE
Previous wording
Net sales increased 43.9%, and on a constant currency basis increased 44.0%. The change in net sales was driven by the following:
Current wording
Net sales increased 50.6%, and on a constant currency basis increased 50.4%. The change in net sales was driven by the following:
Previous wording
•Tempur Sealy North America net sales decreased $534.9 million, or 28.5%. Net sales in the Wholesale channel decreased $513.2 million, or 31.5%, primarily driven by a 24.2% decline from the elimination of intercompany sales to Mattress Firm of $393.6 million, and a 7.3% decrease in sales of $119.6 million, primarily driven by a customer's acquisition which foreclosed distribution to this customer. Net sales in the Direct channel decreased $21.7 million, or 8.8%, primarily driven by a decrease in sales from the divestiture of Sleep Outfitters.
Current wording
•Tempur Sealy North America net sales decreased $814.1 million, or 28.1%. Net sales in the Wholesale channel decreased $765.2 million, or 30.5%, primarily driven by a 28.2% decline from the elimination of intercompany sales to Mattress Firm of $707.3 million, and a 2.3% decrease in net sales of $57.9 million, primarily driven by foreclosed distribution. Net sales in the Direct channel decreased $48.9 million, or 12.7%, primarily driven by a decrease in sales from the divestiture of Sleep Outfitters.
Previous wording
•Tempur Sealy International net sales increased $54.9 million, or 10.1%, primarily driven by the success of new product launches. On a constant currency basis, International net sales increased $47.8 million, or 8.8%. Net sales in the Wholesale channel increased 9.3% on a constant currency basis. Net sales in the Direct channel increased 8.5% on a constant currency basis.
Current wording
•Tempur Sealy International net sales increased $85.9 million, or 10.4%, primarily driven by the success of new product launches and expanded distribution. On a constant currency basis, International net sales increased $67.9 million, or 8.2%. Net sales in the Wholesale channel increased 8.1% on a constant currency basis. Net sales in the Direct channel increased 8.2% on a constant currency basis.
Previous wording
•Mattress Firmnet sales were $1,542.5 million for the stub period.
Current wording
•Mattress Firmnet sales were $2,613.3 million for the stub period.
Previous wording
Gross margin declined 50 basis points. The primary drivers of changes in gross margin by segment are discussed below:
Current wording
Gross margin improved 60 basis points. The primary drivers of changes in gross margin by segment are discussed below:
Previous wording
•Tempur Sealy North America gross margin improved 480 basis points. The improvement in gross margin was primarily driven by elimination of intercompany sales to Mattress Firm of 990 basis points, operational efficiencies of 90 basis points and favorable mix. These improvements were partially offset by expense deleverage of 130 basis points, commodity cost inflation and product launch costs. Additionally, we incurred $78.0 million of one-time business combination accounting adjustments related to the Mattress Firm Acquisition.
Current wording
•Tempur Sealy North America gross margin improved 950 basis points. The improvement in gross margin was primarily driven by elimination of intercompany sales to Mattress Firm of 1,240 basis points and operational efficiencies of 80 basis points. These improvements were partially offset by expense deleverage of 80 basis points. Additionally, we incurred $78.0 million of one-time business combination accounting adjustments related to the Mattress Firm Acquisition.
Previous wording
•Tempur Sealy International gross margin improved 50 basis points. The improvement in gross margin was primarily driven by decreased product launch costs.
Current wording
•Tempur Sealy International gross margin improved 20 basis points. The improvement in gross margin was primarily driven by operational efficiencies.
Previous wording
Operating expenses increased $513.4 million, or 73.9%, and increased 600 basis points as a percentage of net sales. The primary drivers of changes in operating expenses by segment are explained below:
Current wording
Operating expenses increased $802.4 million, or 76.6%, and increased 490 basis points as a percentage of net sales. The primary drivers of changes in operating expenses by segment are explained below:
Previous wording
•Tempur Sealy North America operating expenses decreased $7.6 million, or 1.8%, and increased 820 basis points as a percentage of net sales. The decrease in operating expenses was primarily driven by decreases in other selling and marketing and general, administrative and other expenses, partially offset by investments in advertising.
Current wording
•Tempur Sealy North America operating expenses decreased $9.7 million, or 1.5%, and increased 810 basis points as a percentage of net sales. The decrease in operating expenses was primarily driven by decreases in general, administrative and other expenses and other selling and marketing, partially offset by investments in advertising.
Previous wording
•Tempur Sealy International operating expenses increased $14.9 million, or 7.7%, and decreased 80 basis points as a percentage of net sales. The increase in operating expenses was primarily driven by investments in growth initiatives.
Current wording
•Tempur Sealy International operating expenses increased $24.4 million, or 8.6%, and decreased 60 basis points as a percentage of net sales. The increase in operating expenses was primarily driven by investments in growth initiatives.
Previous wording
•Mattress Firm operating expenses were $454.5 million for the stub period.
Current wording
•Mattress Firm operating expenses were $741.4 million for the stub period.
Showing the first 40 of 64 pairs. Open the source sections for the rest.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
•Mattress Firm operating income was $63.2 million and operating margin was 6.7% for the three months ended June 30, 2025. Additionally, we incurred a $4.1 million loss on disposal of business associated with the divestiture of 73 retail stores.