Somnigroup International (SGI) investor relations material

Executive summary

• Q3 net sales rose 10.8% YoY to a record $2,350.8M; adjusted EPS increased 9.5% to a record $1.04 and adjusted EBITDA was $447.5M, while GAAP operating income, net income and diluted EPS declined.

• Leggett & Platt closed August 26, 2026, contributing $372.6M of Q3 sales for the post-acquisition stub period.

• Dreams’ ERP transition disrupted operations; estimated impact was $50M of sales and $25M of adjusted EBITDA versus prior year, with recovery expected in early Q1 2027, subject to market conditions.

Financial highlights

• Q3 net income was $163.5M, down 7.8% YoY; adjusted net income was $228.9M, up 13.7%.

• Q3 EBITDA was $375.2M versus $379.0M; adjusted EBITDA was $447.5M versus $418.9M.

• Q3 gross margin was 42.0% versus 44.9%; adjusted gross margin was 43.0% versus 45.6%.

• Q3 included $82M of pro forma adjustments, mainly Leggett transaction and transition costs; $35.5M of transaction costs and $13.0M debt-extinguishment loss were among adjusted-result exclusions.

• Mattress Firm synergies delivered $25M of net benefit in Q3; ~$20M of tariff refunds offset Dreams’ unexpected performance, for a neutral enterprise-wide effect from those one-time items.

Outlook and guidance

• FY2026 adjusted EPS guidance is $2.85–$2.95, with net sales of ~$8.65B and adjusted EBITDA of $1.4B at the midpoint.

• Guidance assumes the global bedding industry declines mid-single digits in 2H’26; Tempur Sealy North America and International like-for-like sales are flattish, while Mattress Firm is down low single digits.

• FY2026 adjusted gross margin is expected slightly above 41%; advertising investment is expected to be ~$680M.

• 2027 adjusted EPS run-rate target is $3.40, comprising the $2.90 FY2026 midpoint plus $0.25 Leggett accretion and $0.25 of synergies; $5.15 for 2028 remains aspirational.

• 2027 adjusted EPS growth drivers include Dreams recovery, share gains, product launches, store growth and ~$125M of incremental adjusted EBITDA synergies for 2027 and beyond.