SOMNIGROUP INTERNATIONAL INC. Q4 FY2025 earnings call

• 2025 achievements: Successful execution of Mattress Firm combination and transition to Somnigroup International, with expected $225,000,000 in total EBITDA synergies ($125,000,000 cost synergies, $100,000,000 sales synergies). Strong operating model enabling share gains across segments. US Tempur - Sealy business outperformance with new product launches and advertising. Mattress Firm's full - year performance outpacing broader US market with refined merchandising, supplier relations, and in - store execution. International business saw impressive sales growth, with Tempur International and Dreams showing strong performance.

In 2025, consolidated net sales were $1,900,000,000. Adjusted EBITDA was $349,000,000, up ~59% year over year. Adjusted EPS was $0.72, up 20% year over year. North American Tempur Sealy: Like - for - like net sales through wholesale channel increased ~6% in Q4; direct channel net sales declined 7% in Q4. North American adjusted gross margin increased 2,000 basis points to 59.5%, adjusted operating margin improved 1,300 basis points to 27.6%. International: Net sales grew 13% reported and 9% constant currency. International gross margins increased 40 basis points to 51.1%, operating margin increased 110 basis points to 22.4%.

Adjusted earnings per share expected between $3.00 and $3.40 for 2026. Global bedding industry expected to be slightly up. Tempur Sealy North America sales expected to grow mid single digits like - for - like. Reported sales impacted by intercompany eliminations. International business expected to grow mid to high single digits. Reported gross margin slightly above 45%. 2028 target EPS raised to $5.15, targeting mid - single digit annual sales growth and double - digit annual adjusted EBITDA growth.

Q: Outlook for demand, specifically on consumer state and Tempur North America sales guide.

A: Scott mentioned fourth quarter was light from industry perspective, but start of first quarter sales at Mattress Firm are positive. Mentioned weather - related store closings in early February but strong sales after that.

Q: Elaboration on 2028 target EPS raise.

A: Some drivers are synergies and confidence in competitive position.

Q: Elasticity of demand and price increase impact on volume.

A: Scott said they took price increases in past years with no significant volume impact as industry is efficient in passing cost increases.

Q: Lack of product launches in first half and gross margin guide.

A: Product launches have mixed margin impact. Gross margin guide of 100 basis points has first half and back half phasing but net full year impact is neutral.

Q: Changes at Mattress Firm from consumer and operational perspective.

A: Mattress Firm continues to take share, merchandising changes well - received, with various brands showing growth.

Q: Marketing step - up from partners and competitive dynamics with Mattress Firm.

A: Other manufacturers are giving incremental support for advertising, and other retailers' sales of Tempur Sealy products are outperforming general market.

Q: International growth split between new door growth and throughput.

A: International growth has been principally at existing distribution with velocity improvement, and next leg may involve expanding outside historic footprint.