Somnigroup International (SGI) Q2 2026 earnings summary

Executive summary

• Achieved Q2 2026 adjusted EPS of $0.58 (up 9.4% YoY), net income of $110.9 million (up 12%), and net sales of $1.82 billion (down 3% YoY), with gross margin improving to 44.8% due to synergies and operational efficiencies.

• Mattress Firm contributed $922.2 million in revenue and $52.7 million in net income, outperforming the broader US market and expanding luxury offerings.

• International business delivered solid results, with Tempur-Pedic and acquisitions like Dreams, SOVA, and SENG gaining share.

• Announced $2.5 billion all-stock acquisition of Leggett & Platt, expected to close by Q3 2026, enhancing vertical integration and innovation.

• Record operating cash flow of $236 million, with leverage ratio at 2.99x and net debt reduced by $500 million over 12 months.

Financial highlights

• Q2 2026 net sales: $1,823.5 million (down 3.0% YoY); adjusted EPS: $0.58 (up 9.4%); adjusted EBITDA: $297 million; gross margin: 44.8%.

• Mattress Firm net sales: $922.2 million (down 2.8% YoY); gross margin: 33.3%; operating margin: 6.4%.

• Tempur Sealy North America net sales: $601.8 million (down 5.7% YoY); gross margin: 61.1%; operating margin: 25.9%.

• International net sales: $299.5 million (up 2.0% YoY); gross margin: 47.4%; operating margin: 12.4%.

• Trailing twelve months adjusted EBITDA: $1,360.7 million; leverage ratio: 2.99x.

Outlook and guidance

• 2026 adjusted EPS guidance: $2.85–$3.15; sales midpoint: $7.6 billion; adjusted EBITDA: ~$1.39 billion; CapEx: $225 million, including $75 million for Mattress Firm store refreshes.

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

• Reported gross margins expected slightly above 45%, with 100 bps net margin expansion from efficiencies and synergies.

• Management expects to outperform the bedding industry through investments in innovation, advertising, and customer service.

• Guidance reflects ongoing macroeconomic and geopolitical risks, including tariffs and global conflicts.