# SOMNIGROUP INTERNATIONAL INC. (SGI) Informational only - not investment advice. CIK: 0001206264 SIC: 2510 Household Furniture SIC breadcrumb: [Manufacturing](/division/D/) > [SIC Major Group 25](/major-group/25/) > [SIC 2510 Household Furniture](/industry/2510/) Latest 10-K filed: 2026-02-27 SEC page: https://www.sec.gov/edgar/browse/?CIK=1206264 Filing source: https://www.sec.gov/Archives/edgar/data/1206264/000120626426000015/sgi-20251231.htm ## At a glance FY2025 · period end 2025-12-31 · filed 2026-02-27 · accession 0001206264-26-000015 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001206264.json | Metric | Value | FY | Provenance | | --- | ---: | ---: | --- | | Revenue | 7,476,500,000 USD | 2025 | verified | | Net income | 384,100,000 USD | 2025 | verified | | Assets | 11,600,700,000 USD | 2025 | verified | | Free cash flow | 633,200,000 USD | 2025 | computed | | Net margin | 5.14% | 2025 | computed | | Operating margin | 10.10% | 2025 | computed | | Revenue YoY | +51.63% | 2025 | computed | | ROE | 12.36% | 2025 | computed | Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Operating margin = operating income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity. No market price, no rating, no forecast on this site. Not investment advice. ### Peer percentile fingerprint | Ratio | SGI | Peer median | Percentile | N | | --- | ---: | ---: | ---: | ---: | | Net margin | 5.1% | 2.4% | 80 | 11 | | Operating margin | 10.1% | 4.8% | 100 | 10 | | Revenue growth | 51.6% | 1.6% | 100 | 11 | | FCF margin | 8.5% | 6.0% | 100 | 11 | | ROE | 12.4% | 6.8% | 90 | 11 | | ROA | 3.3% | 2.3% | 60 | 11 | | Liabilities / equity | 2.73 | 1.31 | 90 | 11 | | Current ratio | 0.83 | 1.89 | 0 | 11 | Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC major-group 25 SIC Major Group 25, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking. ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 7476500000 | USD | 2025 | 2026-02-27 | | Net income | 384100000 | USD | 2025 | 2026-02-27 | | Assets | 11600700000 | USD | 2025 | 2026-02-27 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-27. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001206264.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts. | Metric | 2008 | 2009 | 2010 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | | | | | | 3,079,700,000 | 2,700,600,000 | 2,702,900,000 | 3,106,000,000 | 3,676,900,000 | 4,930,800,000 | 4,921,200,000 | 4,925,400,000 | 4,930,900,000 | 7,476,500,000 | | Net income | | | | | | 190,600,000 | 151,400,000 | 100,500,000 | 189,500,000 | 348,800,000 | 624,500,000 | 455,700,000 | 368,100,000 | 384,300,000 | 384,100,000 | | Operating income | | | | | | 413,400,000 | 295,500,000 | 256,300,000 | 346,700,000 | 532,100,000 | 912,300,000 | 680,600,000 | 607,200,000 | 634,200,000 | 754,900,000 | | Gross profit | | | | | | 1,289,500,000 | 1,121,000,000 | 1,120,700,000 | 1,342,200,000 | 1,638,400,000 | 2,158,700,000 | 2,049,600,000 | 1,986,200,000 | 2,027,900,000 | 3,183,200,000 | | Diluted EPS | | | | | | 3.19 | 2.77 | 0.46 | 0.86 | 1.64 | 3.06 | 2.53 | 2.08 | 2.16 | 1.84 | | Operating cash flow | | | | 225,200,000 | 234,200,000 | 165,500,000 | 222,900,000 | | | 654,700,000 | 723,100,000 | 378,800,000 | 570,300,000 | 666,500,000 | 800,100,000 | | Capital expenditures | | | | | | 61,900,000 | 66,600,000 | 73,600,000 | 88,200,000 | 111,300,000 | 123,300,000 | 306,500,000 | 185,400,000 | 97,300,000 | 166,900,000 | | Dividends paid | 17,933,000 | 0.00 | 0.00 | | | | | | 0.00 | 0.00 | 63,100,000 | 70,500,000 | 77,700,000 | 92,700,000 | 127,400,000 | | Assets | | | | | | 2,698,800,000 | 2,694,000,000 | 2,715,400,000 | 3,061,800,000 | 3,308,600,000 | 4,323,400,000 | 4,359,800,000 | 4,553,900,000 | 5,980,400,000 | 11,600,700,000 | | Liabilities | | | | | | 2,733,100,000 | 2,579,300,000 | 2,497,900,000 | 2,701,400,000 | 2,795,100,000 | 4,028,400,000 | 4,372,100,000 | 4,220,500,000 | 5,412,100,000 | 8,483,800,000 | | Stockholders' equity | | | | | | -41,900,000 | 112,500,000 | 217,500,000 | 360,400,000 | 504,600,000 | 285,800,000 | -22,100,000 | 323,400,000 | 559,000,000 | 3,108,000,000 | | Free cash flow | | | | | | 103,600,000 | 156,300,000 | | | 543,400,000 | 599,800,000 | 72,300,000 | 384,900,000 | 569,200,000 | 633,200,000 | ### Ratios ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported. | Metric | 2008 | 2009 | 2010 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Net margin | | | | | | 6.19% | 5.61% | 3.72% | 6.10% | 9.49% | 12.67% | 9.26% | 7.47% | 7.79% | 5.14% | | Operating margin | | | | | | 13.42% | 10.94% | 9.48% | 11.16% | 14.47% | 18.50% | 13.83% | 12.33% | 12.86% | 10.10% | | Return on equity | | | | | | | 134.58% | 46.21% | 52.58% | 69.12% | 218.51% | | 113.82% | 68.75% | 12.36% | | Return on assets | | | | | | 7.06% | 5.62% | 3.70% | 6.19% | 10.54% | 14.44% | 10.45% | 8.08% | 6.43% | 3.31% | | Liabilities / equity | | | | | | | 22.93 | 11.48 | 7.50 | 5.54 | 14.10 | | 13.05 | 9.68 | 2.73 | | Current ratio | | | | | | 1.19 | 1.05 | 1.20 | 1.16 | 0.99 | 1.21 | 1.22 | 1.21 | 1.11 | 0.83 | ## As-reported value updates 7 tracked differences above grepcent's stated thresholds were found between the earliest XBRL-filed value and the value currently on file for the same fiscal period. Ledger: /company/SGI/revisions/ ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-08-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001206264.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q3 | 2022-09-30 | | | 0.75 | reported discrete quarter | | 2023-Q1 | 2023-03-31 | | | 0.48 | reported discrete quarter | | 2023-Q2 | 2023-06-30 | | | 0.52 | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 1,277,100,000 | 113,300,000 | 0.64 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 1,170,500,000 | 77,100,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 1,189,400,000 | 76,300,000 | 0.43 | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 1,233,600,000 | 106,100,000 | 0.60 | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 1,300,000,000 | 130,000,000 | 0.73 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 1,207,900,000 | 71,900,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 1,604,700,000 | -33,100,000 | -0.17 | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 1,880,800,000 | 99,000,000 | 0.47 | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 2,122,600,000 | 177,400,000 | 0.83 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 1,868,400,000 | 140,800,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 1,801,500,000 | 104,200,000 | 0.49 | reported discrete quarter | | 2026-Q2 | 2026-06-30 | 1,823,500,000 | 110,900,000 | 0.52 | reported discrete quarter | ## Filed narrative (10-K & 10-Q) ## Business Verbatim Item 1 Business section from SGI's latest 10-K: [/company/SGI/business/](/company/SGI/business/). ## Risk Factors Verbatim Item 1A Risk Factors from SGI's latest 10-K: [/company/SGI/risk-factors/](/company/SGI/risk-factors/). ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1206264/000120626426000113/sgi-20260630.htm Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Published MD&A gate trimmed front/tail over-capture. Confidence: high Filing date: 2026-08-07 Report date: 2026-06-30 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with the 2025 Annual Report, including "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in ITEM 7 of Part II of the 2025 Annual Report, and the accompanying Condensed Consolidated Financial Statements and notes thereto included in this Report. Unless otherwise noted, all of the financial information in this Report is consolidated financial information for the Company. The forward-looking statements in this discussion regarding the mattress and pillow industries, our expectations regarding our future performance, liquidity and capital resources and other non-historical statements in this discussion are subject to numerous risks and uncertainties. See "Special Note Regarding Forward-Looking Statements" elsewhere in this Report and in the 2025 Annual Report, the section titled "Risk Factors" contained in ITEM 1A of Part I of the 2025 Annual Report. Our actual results may differ materially from those contained in any forward-looking statements. In this discussion and analysis, we discuss and explain the consolidated financial condition and results of operations for the three and six months ended June 30, 2026, including the following topics: •an overview of our business and strategy; •results of operations, including our net sales and costs in the periods presented as well as changes between periods; •expected sources of liquidity for future operations; and •our use of certain non-GAAP financial measures. Business Overview General We are the world's leading bedding company, dedicated to transforming how the world sleeps. With superior capabilities in design, manufacturing, distribution and retail, we deliver breakthrough sleep solutions and serve the evolving needs of consumers in more than 100 countries worldwide through our fully-owned businesses, Tempur Sealy, Mattress Firm and Dreams. We operate in three segments: Mattress Firm, Tempur Sealy North America and Tempur Sealy International. These segments are strategic business units that are managed separately. Our Mattress Firm segment consists of retail stores and distribution centers located in the U.S. Our Tempur Sealy North America segment consists of manufacturing, distribution and retail subsidiaries and licensees located in the U.S., Canada and Mexico (other than Mattress Firm retail and distribution locations). Our Tempur Sealy International segment consists of manufacturing, distribution and retail subsidiaries, joint ventures and licensees located in Europe, Asia-Pacific and Latin America (other than Mexico). Corporate operating expenses are not included in any of the segments and are presented separately as a reconciling item to consolidated results. We evaluate segment performance based on net sales, gross profit and operating income. For additional information refer to Note 12, "Business Segment Information," included in Part I, ITEM 1 of this Report. Our portfolio includes the most highly recognized brands in the industry, including Tempur-Pedic®, Sealy® and Stearns & Foster® and our global omni-channel platform enables us to meet consumers wherever they shop, offering a personal connection and innovation to provide a unique retail experience and tailored sleep solutions. As of June 30, 2026, we operated 2,842 company-owned stores, including 2,155 Mattress Firm stores, Tempur Sealy owned stores, Dreams stores and joint venture stores. Our distribution model operates through an omni-channel strategy. The Mattress Firm segment sells products through one channel: Direct. The Tempur Sealy North America and Tempur Sealy International operating business segments sell products through two channels: Direct and Wholesale. Our Direct channel includes product sales through company-owned stores, online and call centers. Our Wholesale channel includes all product sales to third-party retailers, including third-party distribution, hospitality and healthcare. 25 Table of Contents General Business and Economic Conditions Over the last decade, consumers have made the connection between a good night's sleep and overall health and wellness. As consumers make this connection, they are willing to invest more in their bedding purchases. We believe the bedding industry is structured for sustained long-term growth, driven by product innovation, sleep technology advancements, consumer confidence, housing formations and population growth. Due to our dedication to product innovation and other competitive advantages, we believe Somnigroup is well-positioned to take advantage of the industry’s long-term growth potential. The global bedding industry was challenged in 2025 due to certain macroeconomic pressures on the consumer, which continued during the first half of 2026. Ongoing geopolitical conflicts, including trade disputes and the imposition of tariffs, along with the U.S. government shutdowns, may also introduce further uncertainty for the consumer. We have taken actions to mitigate the impact of proposed tariffs, and we implemented pricing actions to mitigate the remaining impact. The majority of our products sold in the U.S. are also manufactured in the U.S. Accordingly, we believe proposed tariffs will not have a material impact on our results of operations in 2026. However, the duration and extent of tariffs remain uncertain, and we are continuing to evaluate the potential future impacts of the imposition of tariffs. We expect to outperform the bedding industry as a result of our investments in new product launches and continued investments in innovation, quality, advertising and customer service. Definitive Agreement with Leggett & Platt, Incorporated On April 13, 2026, Somnigroup International and Leggett & Platt, Incorporated ("Leggett & Platt") entered into a definitive agreement (the "Merger Agreement") for a proposed business acquisition in which Somnigroup International, through a wholly-owned subsidiary, will acquire Leggett & Platt in an all-stock transaction valued at approximately $2.5 billion based on the closing price of Somnigroup International's common stock as of April 10, 2026 and inclusive of Leggett & Platt's existing indebtedness. The transaction is currently anticipated to close by the end of the third quarter of 2026, subject to the satisfaction of customary closing conditions, including approval by Leggett & Platt’s shareholders and receipt of applicable regulatory approvals. The transaction does not require Somnigroup International shareholder approval. Following the close of the transaction, Leggett & Platt is expected to operate as a separate business unit within Somnigroup and to maintain its offices in Carthage, Missouri. Acquisition of Mattress Firm On February 5, 2025, we completed the Mattress Firm Acquisition for an aggregate purchase price of approximately $5.1 billion, net of cash acquired of $0.3 billion. The aggregate purchase price consisted of $3.1 billion in cash and approximately 34.2 million shares of common stock valued at $65.65 per share, which represents the simple average of the opening and closing price per share of our common stock on the NYSE on the trading day immediately prior to the date of acquisition, with the value of any fractional shares paid in cash. Mattress Firm operates as a separate business segment. Mattress Firm's financial results for the period April 1, 2025 through June 30, 2025 and February 5, 2025 through June 30, 2025 (the "stub period") are included in our Condensed Consolidated Financial Statements for the three and six months ended June 30, 2025, respectively. On May 1, 2025, we completed the previously announced divestiture of 73 Mattress Firm retail locations and our Sleep Outfitters subsidiary, which includes 103 specialty mattress retail locations and seven distribution centers, to MW SO Holdings Company, LLC ("Mattress Warehouse"). Product Launches In 2026, we plan to launch an all new collection of Stearns & Foster products in North America. This new line is designed to further elevate our high‑end traditional innerspring brand by introducing incremental technologies, expanding our range of hybrid offerings and providing a refreshed aesthetic. 26 Table of Contents Results of Operations A summary of our results for the three months ended June 30, 2026 include: •Total net sales decreased 3.0% to $1,823.5 million as compared to $1,880.8 million in the second quarter of 2025. •Gross margin was 44.8% as compared to 44.0% in the second quarter of 2025. Adjusted gross margin, which is a non-GAAP financial measure, was 45.1% as compared to 44.2% in the second quarter of 2025. •Operating income increased 12.1% to $201.7 million as compared to $179.9 million in the second quarter of 2025. Adjusted operating income, which is a non-GAAP financial measure, decreased 3.5% to $216.6 million as compared to $224.4 million in the second quarter of 2025. Both were primarily driven by realized sales and cost synergies. •Net income increased 12.0% to $110.9 million as compared to $99.0 million in the second quarter of 2025. Adjusted net income, which is a non-GAAP financial measure, increased 8.4% to $122.6 million as compared to $113.1 million in the second quarter of 2025. •Earnings per diluted share ("EPS") increased 10.6% to $0.52 as compared to $0.47 in the second quarter of 2025. Adjusted EPS, which is a non-GAAP financial measure, increased 9.4% to $0.58 as compared to $0.53 in the second quarter of 2025. For a discussion and reconciliation of non-GAAP financial measures as discussed above to the corresponding GAAP financial results, refer to the non-GAAP financial information set forth below under the heading "Non-GAAP Financial Information." We may refer to net sales, earnings or other historical financial information on a "constant currency basis," which is a non-GAAP financial measure. These references to constant currency basis do not include operational impacts that could result from fluctuations in foreign currency rates. To provide information on a constant currency basis, the applicable financial results are adjusted based on a simple mathematical model that translates current period results in local currency using the comparable prior corresponding period's currency conversion rate. This approach is used for countries where the functional currency is the local country currency. This information is provided so that certain financial results can be viewed without the impact of fluctuations in foreign currency rates, thereby facilitating period-to-period comparisons of business performance. Constant currency information is not recognized under GAAP, and it is not intended as an alternative to GAAP measures. Refer to Part I, ITEM 3 of this Report for a discussion of our foreign currency exchange rate risk. 27 Table of Contents THREE MONTHS ENDED JUNE 30, 2026 COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2025 The following table sets forth the various components of our Condensed Consolidated Statements of Income and expresses each component as a percentage of net sales: [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A (excerpt) Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/1206264/000120626426000015/sgi-20251231.htm Complete FY 2025 MD&A: /company/SGI/mda/fy2025/ Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high Filing date: 2026-02-27 Report date: 2025-12-31 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with the audited Consolidated Financial Statements and accompanying notes thereto included elsewhere in this Report. Unless otherwise noted, all of the financial information in this Report is consolidated financial information for the Company, including Mattress Firm's financial results for the period February 5, 2025 through December 31, 2025 (the "stub period"). The forward-looking statements in this discussion regarding the mattress and pillow industries, our expectations regarding our future performance, liquidity and capital resources and other non-historical statements in this discussion are subject to numerous risks and uncertainties. See "Special Note Regarding Forward-Looking Statements" and Part I, ITEM 1A of this Report. Our actual results may differ materially from those contained in any forward-looking statements. For results of operations comparisons relating to years ending December 31, 2024 and 2023, refer to our annual report on Form 10-K, Part II, ITEM 7: Management's Discussion and Analysis of Financial Condition and Results of Operations filed with the Securities and Exchange Commission on February 28, 2025. In this discussion and analysis, we discuss and explain the consolidated financial condition and results of operations for the years ended December 31, 2025 and 2024, including the following topics: •an overview of our business and strategy; •results of operations, including our net sales and costs in the periods presented as well as changes between periods; •expected sources of liquidity for future operations; and •our use of certain non-GAAP financial measures. Business Overview General We are the world's largest bedding company, dedicated to transforming how the world sleeps. With superior capabilities in design, manufacturing, distribution and retail, we deliver breakthrough sleep solutions and serve the evolving needs of consumers in over 100 countries worldwide through our fully-owned businesses, Tempur Sealy, Mattress Firm and Dreams. We operate in three segments: Mattress Firm, Tempur Sealy North America and Tempur Sealy International. These segments are strategic business units that are managed separately. Our Mattress Firm segment consists of retail stores and distribution centers located in the U.S. Our Tempur Sealy North America segment consists of manufacturing, distribution and retail subsidiaries and licensees located in the U.S., Canada and Mexico (other than Mattress Firm retail and distribution locations). Our Tempur Sealy International segment consists of manufacturing, distribution and retail subsidiaries, joint ventures and licensees located in Europe, Asia-Pacific and Latin America (other than Mexico). Corporate operating expenses are not included in any of the segments and are presented separately as a reconciling item to consolidated results. We evaluate segment performance based on net sales, gross profit and operating income. For additional information refer to Note 15, "Business Segment Information," included in Part II, ITEM 8 "Financial Statements and Supplementary Data," of this Report. Our portfolio includes the most highly recognized brands in the industry, including Tempur-Pedic®, Sealy® and Stearns & Foster®, and our global omni-channel platform enables us to meet consumers wherever they shop, offering a personal connection and innovation to provide a unique retail experience and tailored solutions. 17 Table of Contents As of December 31, 2025, Somnigroup operated 2,852 company-owned stores, including 2,174 Mattress Firm stores, Tempur Sealy owned stores, Dreams stores and joint venture stores. Our distribution model operates through an omni-channel strategy. The Mattress Firm segment sells products through one channel: Direct. The Tempur Sealy North America and Tempur Sealy International segments sell products through two channels: Direct and Wholesale. The Direct channel includes product sales through company-owned stores, e-commerce and call centers. The Wholesale channel includes all product sales to third-party retailers, including third-party distribution, hospitality and healthcare. General Business and Economic Conditions We believe the bedding industry is structured for sustained growth, driven by product innovation, sleep technology advancements, consumer confidence, housing formations and population growth. In our opinion, the industry is no longer engaged in uneconomical retail store expansion, startups have shifted from uneconomical strategies to becoming profitable and legacy retailers and manufacturers have become skilled in producing profitable online sales. Over the last decade, consumers have made the connection between a good night's sleep and overall health and wellness. As consumers make this connection, they are willing to invest more in their bedding purchases, which positions us well for long-term growth. The global bedding industry was challenged in 2025 due to certain macroeconomic pressures on the consumer. Ongoing geopolitical conflicts, including trade disputes and the imposition of tariffs, along with the potential for U.S. government shutdowns, may also introduce further uncertainty for the consumer. We have taken actions to mitigate the impact of proposed tariffs, and we implemented pricing actions to mitigate the remaining impact. The majority of our products sold in the U.S. are also manufactured in the U.S. Accordingly, we believe proposed tariffs will not have a material impact on our results of operations in 2026. However, the duration and extent of tariffs remain uncertain, and we are continuing to evaluate the potential future impacts of the imposition of tariffs. We expect to outperform the bedding industry as a result of our investments in new product launches and continued investments in innovation, quality, advertising and customer service. Acquisition of Mattress Firm On February 5, 2025, we completed the acquisition of Mattress Firm for an aggregate purchase price of approximately $5.1 billion, net of cash acquired of $0.3 billion. The aggregate purchase price consisted of $3.1 billion in cash and approximately 34.2 million shares of our common stock valued at $65.65 per share, which represents the simple average of the opening and closing price per share of our common stock on the NYSE on the trading day immediately prior to the date of acquisition, with the value of any fractional shares paid in cash. In connection with the consummation of the merger, we borrowed $625.0 million on the Delayed Draw Term A Loan and $679.5 million of revolving commitments under our senior credit facility. In addition, approximately $1,592.0 million of proceeds in respect of the Term B Loan were released from escrow. The proceeds of this financing were collectively used to fund a portion of the cash consideration, the repayment of Mattress Firm's debt and the payment of certain fees and expenses related to the merger. Mattress Firm operates as a separate business segment. Mattress Firm's financial results for the stub period are included in our Condensed Consolidated Financial Statements for the year ended December 31 2025. On May 1, 2025, we completed the previously announced divestiture of 73 Mattress Firm retail locations and our Sleep Outfitters subsidiary, which included 103 specialty mattress retail locations and seven distribution centers to MW SO Holdings Company, LLC ("Mattress Warehouse"). In the year ended December 31, 2025, we recorded a $13.9 million loss on disposal of business associated with the divestiture, net of proceeds of $9.0 million, which did not have a material impact on our results of operations. 18 Table of Contents Product Launches In 2025, we launched an all-new collection of Sealy Posturepedic® products in North America. This reinvention of the Sealy Posturepedic® brand is strategically aimed at reigniting growth in the mid-to-entry level market, which has experienced outsized pressures relative to other price points in recent years. The new collection incorporates innovative technologies, including our proprietary PrecisionFit™ coils which were expertly designed to provide superior support. In 2026, we plan to launch an all new collection of Stearns & Foster products in North America. This new line is designed to further elevate our high‑end traditional innerspring brand by introducing incremental technologies, expanding our range of hybrid offerings, and providing a refreshed aesthetic. Omni-Channel Distribution We employ a balanced omni-channel strategy, which we believe enhances the overall global sales potential and profitability of Somnigroup. Our direct channel is led by over 2,100 Mattress Firm retail stores and e-commerce in the U.S. and over 200 Dreams locations and e-commerce in the U.K, with additional brick and mortar stores and e-commerce channels in many other key markets around the world. We see opportunity to continue to drive sales growth on a per store basis across our existing footprint. There may be opportunities to open a new store or relocate a store to further optimize economics in the U.S. and U.K., and we foresee meaningful opportunity to continue to expand our brick-and-mortar presence in other key markets worldwide. We also have opportunity to continue to drive sales through our e-commerce channels globally. Our wholesale distribution is comprised of a diverse group of strong retail partners with more than 20,000 doors, primarily concentrated in the U.S. While we are well represented at third-party retailers in the U.S. today, there are opportunities to both increase the presence of our brands with retail partners and to sell into certain key retailers that do not have our products on their floors today. We also have significant opportunity to expand our third-party retail distribution in our international business. In addition to offering a portfolio of some of the most highly recognized brands in the industry, we also offer non-branded products through our OEM business. These offerings include mattresses, pillows and other bedding products and components, at a wide range of price points. Our non-branded offerings complement our suite of branded products, expanding our capability to service third-party retailers and creating opportunity to capture manufacturing profits from bedding brands outside our own. We target obtaining a meaningful share of the OEM market in the long-term. We have been focused on building our direct channel, both online and company-owned retail stores. The development of our online business has been particularly important as consumers have grown more comfortable shopping for bedding products online. Following the acquisition of Mattress Firm, over 60% of our global sales are direct-to-consumer and no customer represents more than 5% of global sales. Our expanded direct channel distribution complements our wholesale business, and we believe this balanced approach enhances the overall global sales potential and profitability of Somnigroup. 2025 Results of Operations A summary of our results for the year ended December 31, 2025 include: •Total net sales increased 51.6% to $7,476.5 million as compared to $4,930.9 million in 2024, primarily driven by the inclusion of $3,505.4 million of Mattress Firm sales for the stub period, offset by the elimination of $976.2 million of sales from the Tempur Sealy North America segment to the Mattress Firm segment for the stub period. •Gross margin was 42.6% as compared to 41.1% in 2024. Adjusted gross margin, which is a non-GAAP financial measure, was 44.4% as compared to 41.9% in 2024. •Operating income increased 19.0% to $754.9 million as compared to $634.2 million in 2024. Adjusted operating income, which is a non-GAAP financial measure, increased 41.2% to $1,018.7 million a [Excerpt truncated for page length; the complete text is on the linked full-MD&A page.] Read the full FY 2025 MD&A: /company/SGI/mda/fy2025/ All MD&A years: /company/SGI/mda/ ## MD&A history Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page. - [FY 2024 MD&A](/company/SGI/mda/fy2024/): filed 2025-02-28; accession 0001206264-25-000058 (https://www.sec.gov/Archives/edgar/data/1206264/000120626425000058/sgi-20241231.htm) - [FY 2023 MD&A](/company/SGI/mda/fy2023/): filed 2024-02-16; accession 0001206264-24-000050 (https://www.sec.gov/Archives/edgar/data/1206264/000120626424000050/tpx-20231231.htm) - [FY 2022 MD&A](/company/SGI/mda/fy2022/): filed 2023-02-17; accession 0001206264-23-000060 (https://www.sec.gov/Archives/edgar/data/1206264/000120626423000060/tpx-20221231.htm) - [FY 2021 MD&A](/company/SGI/mda/fy2021/): filed 2022-02-22; accession 0001206264-22-000057 (https://www.sec.gov/Archives/edgar/data/1206264/000120626422000057/tpx-20211231.htm) ## Macro cross-references Indicators mapped to this company's SIC classification (industry 2510 Household Furniture) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim. - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm Macro-to-micro threads including this sector: [Inflation (CPI / PCE / PPI)](/thread/inflation-cpi-pce-ppi/), [US labor market](/thread/us-labor-market/), [Growth & output](/thread/growth-output/), [Money & trade](/thread/money-trade/), [Government finances](/thread/government-finances/), [Sector employment](/thread/sector-employment/), [Industrial orders & inventories](/thread/industrial-orders/), [Trade & external](/thread/trade-external/). All macro indicators: /indicators/ ## For LLMs & downloads Markdown twin: /company/SGI.md · JSON record: /company/SGI.json · verified financials: /company/SGI/financials.json / /company/SGI/financials.csv · machine TOC for the whole site: /llms.txt