Somnigroup International Inc. Achieves Exceptional Third Quarter Financial Performance

Somnigroup International Inc. Forges Ahead with Record Results in Q3 2025

Somnigroup International Inc. (NYSE: SGI) reported remarkable results for the third quarter ending September 30, 2025, showcasing substantial growth across various financial metrics. The company attributed these achievements to strategic operational execution and significant contributions from its newly acquired Mattress Firm segment.

Financial Highlights

In Q3 2025, Somnigroup's total net sales soared to $2.12 billion, marking a staggering 63.3% increase compared to $1.30 billion in Q3 2024. This jump in revenue was greatly influenced by the addition of $1.07 billion in sales from Mattress Firm, even after accounting for the elimination of $314 million from inter-segment sales. Notably, direct sales accounted for 65.2% of total net sales, a significant rise from 24.5% in the prior year, underscoring the impact of direct-to-consumer strategies.

The gross margin also improved to 44.9%, rising from 42.4% in the same period last year, while the adjusted gross margin witnessed an even higher increase to 45.6% compared to 43.2% the previous year.

Operating income jumped by 55.9% to $314.7 million, up from $201.8 million in Q3 2024. Adjusted operating income also reflected a healthy rise, reaching $343.7 million, significantly benefiting from synergies realized from the Mattress Firm acquisition.

Somnigroup's net income grew by 36.5% to $177.4 million, while adjusted net income surged to $201.4 million, a 37.5% improvement from the prior year's figures. Earnings per share (EPS) rose by 13.7%, amounting to $0.83, with adjusted EPS reaching $0.95, up 15.9% year-over-year.

Strategic Positioning and Future Outlook

Chairman and CEO Scott Thompson expressed his enthusiasm regarding the financial results, attributing the success to strategic operational execution across all business units. The company is optimistic, noting slight improvements within the bedding industry, and is well-positioned to leverage its strong manufacturing capabilities, trusted brands, and vast omni-channel distribution systems.

Mattress Firm, acquired on February 5, 2025, made notable contributions to the company's robust sales figures. For Q3 2025, Mattress Firm generated $1.07 billion through its direct sales channel, with a gross margin of 34.4%. The operating margin for Mattress Firm stood at 7.6%, with an adjusted operating margin of 9.4%.

In contrast, the Tempur Sealy North America segment experienced fluctuations as it accounted for $313.7 million in sales to Mattress Firm, which influenced its sales dynamics. However, there was a reported net sales decrease of $279.2 million due to these accounting eliminations and a decline in direct sales by nearly 20%.

On the international front, Tempur Sealy International saw a 10.9% rise in net sales to $315.7 million, benefiting from expanded distribution efforts. The gross margin, however, saw a slight decrease, indicating challenges amidst the global market landscape.

Financial Guidance and Dividends

Looking forward, Somnigroup raised its financial guidance for the full year 2025, adjusting the expected range for adjusted EPS to between $2.60 and $2.75. This recalibrated outlook considers anticipated Mattress Firm operations, as well as the recent divestiture of Sleep Outfitters.

Additionally, the company's Board of Directors declared a quarterly cash dividend of $0.15 per share, to be payable on December 4, 2025, to those shareholders on record as of November 20, 2025.

As Somnigroup navigates through evolving market conditions and leverages its recent acquisition, the company acknowledges the inherent risk factors that could affect future performance, including trade policy changes and broader macroeconomic uncertainties.

Conclusion

The strong Q3 results from Somnigroup International Inc. not only underscore the effectiveness of their recent strategic moves but also position the company favorably within the competitive bedding market as it looks forward to further opportunities for growth and expansion.