Somnigroup misses Q3 sales estimates, revises 2026 EPS forecast
Somnigroup posted third-quarter adjusted EPS of $1.04, below the $1.06 consensus estimate, and net sales of $2.35 billion, below the $2.45 billion consensus estimate.
Key takeaways
- Somnigroup (SGI) reported third-quarter adjusted EPS of $1.04, below the $1.06 consensus estimate, and net sales of $2.35 billion, below the $2.45 billion estimate. It revised its 2026 adjusted EPS forecast to $2.85 to $2.95. The company also declared a quarterly dividend of 17 cents per share.
Somnigroup (SGI) reported third-quarter adjusted earnings of $1.04 per share, below the $1.06 consensus estimate. Net sales of $2.35 billion missed the $2.45 billion consensus estimate. The quarter included Leggett & Platt from Aug. 26, when the company completed the acquisition.
Shares rose 1.7% at 9:38 a.m. ET, from a $64.17 close.
Here's how the company did:
- Net sales: $2.35 billion vs. $2.12 billion a year earlier, below the $2.45 billion expected
- Adjusted EPS: $1.04 vs. $0.95 a year earlier, below the $1.06 expected
- GAAP EPS: 74 cents vs. 83 cents a year earlier
- Operating income: $297.4 million vs. $314.7 million a year earlier
Net sales rose 10.8% from a year earlier, driven by $372.6 million of Leggett & Platt net sales for the stub period, from Aug. 26 through Sept. 30.
Acquisition costs and leverage
Operating income fell 5.5% to $297.4 million, driven by acquisition costs. Transaction costs were $35.5 million, mainly legal and professional fees tied to the Leggett & Platt deal.
The company also recorded a $13.0 million loss on extinguishment of debt, tied to the refinancing of its senior secured credit facilities.
Total debt was $5.6 billion at quarter end. Leverage was 2.69 times for the trailing 12 months, compared with 3.28 times a year earlier.
Segment results
Mattress Firm net sales fell 5.8% to $1.01 billion, driven by softer online sales. Same store sales were down slightly.
Tempur Sealy North America net sales fell 5.8% to $693.1 million, primarily on market conditions. Its adjusted operating margin improved 450 basis points to 34.0%.
Tempur Sealy International net sales fell 12.3% to $276.8 million. Dreams sales fell 34.7% after a new ERP system caused operational disruption through the quarter.
Corporate operating expense rose to $74.2 million from $37.9 million, primarily driven by Leggett & Platt acquisition costs.
2026 guidance and dividend
The company revised its 2026 adjusted EPS expectation to a range of $2.85 to $2.95, about a 7% increase from 2025 adjusted EPS at the mid-point. The outlook is subject to tariffs, geopolitical events including the war in Ukraine and the war in the Middle East, and broader macroeconomic conditions.
The board declared a quarterly cash dividend of 17 cents per share, payable Dec. 7 to shareholders of record as of Nov. 23.