second quarter 2026
Filed Aug 6, 2026SOMNIGROUP INTERNATIONAL INC. REPORTS SECOND QUARTER 2026 RESULTS
Net sales decreased 3.0%, while gross margin expanded and GAAP operating income, net income and EPS increased.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total net salesGAAP | $1,823.5 million | – | (3.0) % |
| Gross marginGAAP | 44.8% | – | – |
| Adjusted gross marginnon-GAAP | 45.1% | – | – |
| Operating incomeGAAP | $201.7 million | – | 12.1% |
| Adjusted operating incomenon-GAAP | $216.6 million | – | decreased 3.5% |
| Net incomeGAAP | $110.9 million | – | 12.0% |
| Adjusted net incomenon-GAAP | $122.6 million | – | 8.4% |
| EPSGAAP | $0.52 | – | 10.6% |
| Adjusted EPSnon-GAAP | $0.58 | – | 9.4% |
| Cash flows from operationsother | $236 Million | – | – |
| Total debtother | $4.4 billion | – | – |
| Consolidated indebtedness less netted cashnon-GAAP | $4.3 billion | – | – |
| Leverage based on the ratio of consolidated indebtedness less netted cash to adjusted EBITDAnon-GAAP | 2.99 times | – | – |
| Mattress Firm gross marginGAAP | 33.3% | – | – |
| Mattress Firm adjusted gross marginnon-GAAP | 33.3% | – | declined 240 basis points |
| Mattress Firm operating marginGAAP | 6.4% | – | – |
| Mattress Firm adjusted operating marginnon-GAAP | 6.5% | – | declined 130 basis points |
| Tempur Sealy North America gross marginGAAP | 61.1% | – | – |
| Tempur Sealy North America adjusted gross marginnon-GAAP | 61.8% | – | improved 680 basis points |
| Tempur Sealy North America operating marginGAAP | 25.9% | – | – |
| Tempur Sealy North America adjusted operating marginnon-GAAP | 26.7% | – | improved 400 basis points |
| Tempur Sealy International gross marginGAAP | 47.4% | – | declined 80 basis points |
| Tempur Sealy International operating marginGAAP | 12.4% | – | declined 120 basis points |
| Corporate operating expenseGAAP | $50.8 million | – | decreased |
| Adjusted operating expensenon-GAAP | $41.0 million | – | – |
| Tempur Sealy North America net sales to Mattress FirmGAAP | $294.0 million | – | 11.6% |
| Tempur Sealy North America wholesale-channel reported net salesGAAP | $504.4 million | – | decreased $29.6 million, or 5.5% |
| Tempur Sealy North America direct-channel reported net salesGAAP | $97.4 million | – | decreased $7.0 million, or 6.7% |
| Tempur Sealy International direct-channel net salesGAAP | $182.7 million | – | decreased $2.2 million, or 1.2% |
| Tempur Sealy International wholesale-channel net salesGAAP | $116.8 million | – | increased $8.1 million, or 7.5% |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Mattress FirmPrimarily driven by store closures. Mattress Firm same store sales were up slightly as compared to the second quarter of 2025. | $922.2 million | – | decreased 2.8% |
| Tempur Sealy North AmericaReported net sales were impacted by market conditions. The direct-channel decline was primarily driven by a decrease in sales from the divestiture of Sleep Outfitters in the second quarter of 2025. | $601.8 million | – | decreased 5.7% |
| Tempur Sealy InternationalOn a constant currency basis, International net sales increased 1.3% as compared to the second quarter of 2025. Wholesale-channel sales increased while direct-channel sales decreased. | $299.5 million | – | increased 2.0% |
full year 2026 outlook
- NoteAdjusted EPS (non-GAAP): $2.85 to $3.15
- NoteApproximate 11% increase from 2025 adjusted EPS (non-GAAP) at the mid-point of the range
Capital returns
- Quarterly cash dividend of $0.17 per share, payable on September 3, 2026 to shareholders of record at the close of business on August 20, 2026.
What drove it
- Tempur Sealy North America gross-margin improvements were primarily driven by synergies from the Mattress Firm acquisition, operational efficiencies and mix.
- Mattress Firm sales decline was primarily driven by store closures, while same store sales were up slightly.
- International wholesale-channel net sales increased $8.1 million, or 7.5%.
- Corporate operating expense decreased primarily because of decreased costs related to the Mattress Firm acquisition.
- The Company implemented price increases subsequent to quarter end designed to reflect increases in key input costs of production in North America and International.
Concerns
- Total net sales decreased 3.0%.
- Mattress Firm adjusted gross margin declined 240 basis points and adjusted operating margin declined 130 basis points, driven by product mix, consumer financing costs, investments in Mattress Firm's stores and deleverage.
- International gross margin declined 80 basis points and operating margin declined 120 basis points, primarily due to commodity cost inflation before pricing actions.
- Adjusted operating income decreased 3.5%.
- The full-year outlook is subject to possible new or retaliatory tariffs, global and geo-political events, pricing, sales and material supply effects, labor costs, changes in trade policy and macroeconomic uncertainty.
What to watch
- Execution of the full year 2026 adjusted EPS guidance range of $2.85 to $3.15.
- Effect of price increases implemented subsequent to quarter end on commodity cost inflation in North America and International.
- Progress of the proposed Leggett & Platt acquisition, which the Company expects to close by the end of the third quarter of 2026, subject to closing conditions.
- North American launch of the new Stearns & Foster collection.
- Mattress Firm store closures, same store sales and margin recovery.
Balance sheet and cash flow
- Record second quarter cash flows from operations of $236 Million.
- Total debt of $4.4 billion.
- Consolidated indebtedness less netted cash of $4.3 billion.
- Leverage of 2.99 times for the trailing twelve months ended June 30, 2026, compared to 3.56 times for the trailing twelve months ended June 30, 2025.
Analysis
Somnigroup reported a mixed second quarter. Total net sales decreased 3.0% to $1,823.5 million, but gross margin increased to 44.8% from 44.0%. GAAP operating income increased 12.1% to $201.7 million, net income increased 12.0% to $110.9 million and EPS increased 10.6% to $0.52. Adjusted operating income moved in the opposite direction, decreasing 3.5% to $216.6 million, while adjusted EPS increased 9.4% to $0.58.
Mattress Firm remained a sales and margin headwind. Net sales decreased 2.8% to $922.2 million, primarily driven by store closures, although same store sales were up slightly. Its gross margin fell to 33.3% from 35.6%, and adjusted operating margin declined to 6.5% from 7.8%. The Company cited product mix, consumer financing costs, store investments and deleverage for the gross-margin pressure.
Tempur Sealy North America delivered the strongest margin performance. Reported net sales decreased 5.7% to $601.8 million amid market conditions, but gross margin increased to 61.1% from 54.5% and adjusted operating margin increased to 26.7% from 22.7%. Synergies from the Mattress Firm acquisition, operational efficiencies and mix drove the improvement, partly offset by commodity cost inflation before pricing actions. International net sales increased 2.0% to $299.5 million, but its gross and operating margins declined as commodity cost inflation outweighed operational efficiencies.
Cash flows from operations reached a record second-quarter $236 Million. The Company ended the period with total debt of $4.4 billion and consolidated indebtedness less netted cash of $4.3 billion, while leverage was 2.99 times versus 3.56 times in the trailing twelve months ended June 30, 2025. The Board declared a quarterly cash dividend of $0.17 per share.
For full year 2026, the Company revised expectations for adjusted EPS to $2.85 to $3.15. The guide is framed against tariff risk, global and geo-political events, potential effects on pricing, sales and supply, labor costs, trade policy and macroeconomic uncertainty. The Company also expects its proposed all-stock acquisition of Leggett & Platt to close by the end of the third quarter of 2026, subject to customary conditions.
Management, verbatim
Our second-quarter performance demonstrates our global team's ability to execute in a dynamic environment. We delivered solid results while continuing to fully invest in our iconic brands, advancing our international growth strategy, preparing for the North American launch of our new Stearns & Foster collection and strengthening our multiple distribution platforms. The progress we are making across the business reinforces our confidence in our long-term strategy and our ability to create sustainable value.
Scott Thompson, Company Chairman and CEO
Not in the filing
stated, not guessed- Previous-release outlook for comparison with actual results
- Prior-quarter comparisons for reported metrics
- Free cash flow
- Cash and cash equivalents balance
- Share repurchases
- Operating cash flow comparison with the prior-year period
- GAAP EPS guidance
- Revenue, gross-margin, operating-expense and tax-rate guidance
- Prior-year amounts for reported channel net sales
- Prior-year amounts for cash flows from operations
- Full financial statements and non-GAAP reconciliation schedules beyond the provided filing text
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.