Somnigroup International (SGI) Q1 2026 earnings summary

Executive summary

• Net sales rose 12.3% year-over-year to $1.8 billion in Q1 2026, driven by the full-quarter inclusion of Mattress Firm sales and strong international performance.

• Net income reached $104.2 million, a significant turnaround from a prior-year net loss, with adjusted net income up 28.4%.

• Adjusted EBITDA was $297 million, up nearly 20% year-over-year; adjusted EPS rose 20.4% to $0.59.

• Record first-quarter operating cash flow of $246 million was achieved and used for debt reduction, ending Q1 at a leverage ratio of 3.07x.

• Performance was strong despite global bedding demand declining mid-single digits, with the company extending its industry leadership.

Financial highlights

• Consolidated Q1 sales reached $1.8 billion; adjusted EPS was $0.59, up 20% year-over-year.

• Mattress Firm contributed $885.9 million in net sales; same-store sales were flat, outperforming a market down mid-single digits.

• North America adjusted gross margin increased to 58.3%; international gross margin rose to 50.4%.

• Gross margin expanded to 43.1% from 36.2% year-over-year; adjusted gross margin was 43.6%.

• Record Q1 operating cash flow of $247 million and free cash flow of $186 million; net debt reduced by nearly $500 million over the past 12 months.

Outlook and guidance

• Full-year 2026 adjusted EPS expected between $3.00 and $3.40, with sales midpoint at $7.8 billion after intercompany eliminations.

• Projected adjusted EBITDA of $1.45 billion at midpoint; gross margin expected slightly above 45%.

• At least 50% of 2026 free cash flow to be returned to shareholders via dividends and buybacks.

• CapEx for 2026 projected at $225 million, including $75 million for Mattress Firm store refreshes and brand wall installations.

• Guidance reaffirmed despite challenging market and macroeconomic risks.