- First Quarter 2026 Net Sales Increased 12% to $1.8 Billion
- EPS Growth of 388% and Adjusted EPS(1) Growth of 20%
- Record First Quarter Cash Flows from Operations of $246 Million
DALLAS, May 7, 2026 /PRNewswire/ -- Somnigroup International Inc. (NYSE: SGI, "Company") announced financial results for the first quarter ended March 31, 2026 and reaffirmed financial guidance for the full year 2026.
FIRST QUARTER 2026 FINANCIAL SUMMARY
-- Total net sales increased 12.3% to $1,801.5 million as compared to
$1,604.7 million in the first quarter of 2025, primarily driven by the
inclusion of Mattress Firm sales for a full quarter as compared to the
first quarter of 2025, which included Mattress Firm for the period of
February 5, 2025 through March 31, 2025.
-- Gross margin was 43.1% as compared to 36.2% in the first quarter of 2025.
Adjusted gross margin(1) was 43.6% as compared to 42.2% in the first
quarter of 2025.
-- Operating income increased 1,317.4% to $187.1 million as compared to
$13.2 million in the first quarter of 2025, which was negatively impacted
by one-time transaction costs related to the Mattress Firm acquisition.
Adjusted operating income(1) increased 17.4% to $214.6 million as
compared to $182.8 million in the first quarter of 2025.
-- Net income increased 414.8% to $104.2 million as compared to net loss of
$(33.1) million in the first quarter of 2025, which was negatively
impacted by one-time transaction costs related to the Mattress Firm
acquisition. Adjusted net income(1) increased 28.4% to $124.5 million as
compared to $97.0 million in the first quarter of 2025.
-- Earnings per diluted share ("EPS") increased 388.2% to $0.49 as compared
to loss per diluted share of $(0.17) in the first quarter of 2025, which
was negatively impacted by one-time transaction costs related to the
Mattress Firm acquisition. Adjusted EPS(1) increased 20.4% to $0.59 as
compared to $0.49 in the first quarter of 2025.
KEY HIGHLIGHTS
Three Months Ended
-------------------------------------- ---------
(in millions, except %
percentages and per March 31, March 31, Reported
common share amounts) 2026 2025 Change
------------------ ------------------ ---------
Net sales $ 1,801.5 $ 1,604.7 12.3 %
Net income (loss) $ 104.2 $ (33.1) 414.8 %
Adjusted net income (1) $ 124.5 $ 97.0 28.4 %
Earnings (loss) per
share $ 0.49 $ (0.17) 388.2 %
Adjusted EPS (1) $ 0.59 $ 0.49 20.4 %
Company Chairman and CEO Scott Thompson commented, "While navigating challenging market conditions, we delivered solid financial results this quarter, including a robust 20% increase in adjusted EPS. Our performance in this muted market environment reflects the strength of our business and our continued focus on operational discipline and supporting our customers. Our scale, trusted brands, and omnichannel capabilities provide a solid foundation to succeed and support long--term value creation."
Business Segment Highlights
The Company's business segments include Mattress Firm (acquired on February 5, 2025), Tempur Sealy North America and Tempur Sealy International. Corporate operating expenses are not included in any of the business segments and are presented separately as a reconciling item to consolidated results.
Mattress Firm net sales increased 49.2% to $885.9 million as compared to $593.7 million in the first quarter of 2025, primarily driven by the inclusion of net sales for a full quarter as compared to the first quarter of 2025, which included Mattress Firm for the period of February 5, 2025 through March 31, 2025. All Mattress Firm sales are reported through the direct channel.
Mattress Firm gross margin was 30.8% as compared to 32.2% in the first quarter of 2025. Adjusted gross margin(1) declined 360 basis points to 31.5% as compared to 35.1% in the first quarter of 2025. These declines were primarily driven by investments in promotional expenses, product mix and fixed cost deleverage.
Mattress Firm operating margin was 3.8% as compared to 1.1% in the first quarter of 2025. Adjusted operating margin(1) declined 230 basis points to 4.9% as compared to 7.2% in the first quarter of 2025, primarily driven by the decline in gross margin and the inclusion of operating income for a full quarter as compared to the first quarter of 2025, which included Mattress Firm for the period of February 5, 2025 through March 31, 2025. These declines were partially offset by favorable co-operative advertising expense.
Tempur Sealy North America net sales decreased 20.2% to $563.5 million as compared to $706.2 million in the first quarter of 2025, primarily driven by the accounting elimination of sales to Mattress Firm. Net sales through the wholesale channel decreased $111.0 million, or 19.0%, to $473.5 million as compared to the first quarter of 2025, primarily driven by the accounting elimination of sales to Mattress Firm for a full quarter in 2026 as compared to the first quarter of 2025, which eliminated sales to Mattress Firm for the period of February 5, 2025 through March 31, 2025. Net sales through the direct channel decreased $31.7 million, or 26.0%, to $90.0 million as compared to the first quarter of 2025, primarily driven by a decrease in sales from the divestiture of Sleep Outfitters in the second quarter of 2025.
North America gross margin was 57.9% as compared to 34.0% in the first quarter of 2025. Adjusted gross margin(1) improved 1,300 basis points to 58.3% as compared to 45.3% in the first quarter of 2025. These improvements were primarily driven by the achievement of synergies, the elimination of sales to Mattress Firm, lower product launch costs and operational efficiencies.
North America operating margin was 23.4% as compared to 5.7% in the first quarter of 2025. Adjusted operating margin(1) improved 710 basis points to 24.3% as compared to 17.2% in the first quarter of 2025. These improvements were primarily driven by the improvement in gross margin and the impact of the Mattress Firm acquisition, partially offset by investments in co-operative advertising expense.
Tempur Sealy International net sales increased 15.5% to $352.1 million as compared to $304.8 million in the first quarter of 2025, primarily driven by strong performance in key markets. On a constant currency basis(1) , International net sales increased 7.2% as compared to the first quarter of 2025. Net sales through the direct channel increased $29.8 million, or 15.6%, to $220.4 million as compared to the first quarter of 2025. Net sales through the wholesale channel increased $17.5 million, or 15.3%, to $131.7 million as compared to the first quarter of 2025.
International gross margin improved 140 basis points to 50.4% as compared to 49.0% in the first quarter of 2025. The improvement was primarily driven by favorable mix and operational efficiencies.
International operating margin improved 160 basis points to 18.4% as compared to 16.8% in the first quarter of 2025. The improvement was primarily driven by the improvement in gross margin and operating expense leverage.
Corporate operating expense decreased to $42.9 million as compared to $85.0 million in the first quarter of 2025, primarily driven by decreased costs related to the Mattress Firm acquisition. Adjusted operating expense(1) was $30.6 million as compared to $32.8 million in the first quarter of 2025.
Consolidated Financial Position
Consolidated net income increased 414.8% to $104.2 million as compared to net loss of $(33.1) million in the first quarter of 2025. Adjusted net income(1) increased 28.4% to $124.5 million as compared to $97.0 million in the first quarter of 2025. EPS increased 388.2% to $0.49 as compared to loss per share of $(0.17) in the first quarter of 2025. Adjusted EPS(1) increased 20.4% to $0.59 as compared to $0.49 in the first quarter of 2025.
The Company ended the first quarter of 2026 with total debt of $4.6 billion and consolidated indebtedness less netted cash(1) of $4.5 billion. Leverage based on the ratio of consolidated indebtedness less netted cash(1) to adjusted EBITDA(1) was 3.07 times for the quarter ended March 31, 2026.
Financial Guidance
For the full year 2026, the Company currently expects adjusted EPS(1) to be between $3.00 to $3.40, which represents an approximate 19% increase from 2025 adjusted EPS(1) at the mid-point of the range.
The Company noted that its expectations are based on information available at the time of this release, and are subject to changing conditions and risks, many of which are outside the Company's control, including the possible imposition of new tariffs or retaliatory tariffs, a potential U.S. government shutdown and its effect on sales and supply of materials, increases in existing tariffs and other changes in trade policy and regulations and the resulting uncertainty of the macroeconomic environment. The Company is unable to reconcile forward--looking adjusted EPS, a non--GAAP financial measure, to EPS, its most directly comparable forward--looking GAAP financial measure, without unreasonable efforts, because the Company is currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact EPS in 2026.
(1) This is a non-GAAP financial measure. Please refer to "Non-GAAP Financial
Measures and Constant Currency Information" below.
Proposed Acquisition of Leggett & Platt
On April 13, 2026, the Company announced it has signed a definitive agreement to acquire Leggett & Platt, Incorporated ("Leggett & Platt"), a diversified component manufacturer, 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 Company expects the transaction to close by year-end 2026, subject to the satisfaction of customary closing conditions, including approval by Leggett & Platt's shareholders and receipt of applicable regulatory approvals. A separate press release related to the announcement of this transaction can be found on the Company's investor relations website at investor.somnigroup.com.
Dividend Declared
Today, the Company announced that its Board of Directors declared a quarterly cash dividend of $0.17 per share, payable on June 4, 2026 to shareholders of record at the close of business on May 21, 2026.
Conference Call Information
Somnigroup International Inc. will host a live conference call to discuss financial results today, May 7, 2026, at 8:00 a.m. Eastern Time. The call will be webcast and can be accessed on the Company's investor relations website at investor.somnigroup.com. After the conference call, a webcast replay will remain available on the investor relations section of the Company's website for 30 days.
Non-GAAP Financial Measures and Constant Currency Information
For additional information regarding EBITDA, adjusted EBITDA, adjusted EPS, adjusted net income, adjusted gross profit, adjusted gross margin, adjusted operating income (expense), adjusted operating margin, consolidated indebtedness and consolidated indebtedness less netted cash (all of which are non-GAAP financial measures), please refer to the reconciliations and other information included in the attached schedules. For information on the methodology used to present information on a constant currency basis, please refer to "Constant Currency Information" included in the attached schedules.
Forward-Looking Statements
This press release contains statements that may be characterized as "forward-looking," within the meaning of the federal securities laws. Such statements might include information concerning one or more of the Company's plans, guidance, objectives, goals, strategies and other information that is not historical information. When used in this release, the words "assumes," "estimates," "expects," "guidance," "anticipates," "might," "projects," "plans," "proposed," "targets," "intends," "believes," "will," "contemplates" and variations of such words or similar expressions are intended to identify forward-looking statements. These forward-looking statements include, without limitation, statements relating to the Company's expectations regarding the Mattress Firm acquisition and the pending Leggett & Platt acquisition, expectations regarding post-closing supply agreements, future performance, synergies, integration of acquired companies with our business, including the Mattress Firm acquisition and the pending Leggett & Platt acquisition, the Company's expected quarterly results, full year guidance and outperformance relative to the broader industry, the Company's quarterly cash dividend, the Company's expectations regarding geopolitical events (including the war in Ukraine and the war in the Middle East) and any related effect on pricing, sales and supply of materials, the imposition of new tariffs or retaliatory tariffs, increases in existing tariffs and other changes in trade policy and regulations, changes in tax laws generally, including the H.R. 1 bill, a potential U.S. government shutdown and its effect on sales and supply of materials, loss of suppliers and disruptions in the supply of raw materials, the macroeconomic environment including its impact on consumer behavior, foreign exchange rates and fluctuations in such rates, the bedding industry, financial infrastructure, adjusted EPS for 2026 and subsequent periods and the Company's expectations for sales and adjusted EPS growth, including the Company's long-term expectations with respect to projected compound annual growth rate of sales and adjusted EPS through 2028 and broader market growth, product launches, expected hiring and advertising, capital project timelines, channel growth, acquisitions and commodities outlook. Any forward-looking statements contained herein are based upon current expectations and beliefs and various assumptions. There can be no assurance that the Company will realize these expectations, meet its guidance or that these beliefs will prove correct.
Numerous factors, many of which are beyond the Company's control, could cause actual results to differ materially from any that may be expressed herein as forward-looking statements. These potential risks include the ability to close the pending Leggett & Platt acquisition, which depends on the satisfaction of customary closing conditions, including approval by Leggett & Platt's shareholders and receipt of applicable regulatory approvals; the ability to successfully integrate Mattress Firm and Leggett & Platt into the Company's operations and realize synergies from the transactions; the possibility that the expected benefits of the Mattress Firm and Leggett & Platt acquisitions are not realized when expected or at all; general economic, financial and industry conditions, particularly conditions relating to the financial performance and related credit issues present in the retail sector, as well as consumer confidence and the availability of consumer financing; the impact of the macroeconomic environment in both the U.S. and internationally on the Company; uncertainties arising from national and global events and any related effect on pricing, sales and supply of materials; industry competition; the effects of consolidation of retailers on revenues and costs; and consumer acceptance and changes in demand for the Company's products and the factors discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2025. There may be other factors that may cause the Company's actual results to differ materially from the forward-looking statements. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.
About Somnigroup International Inc.
Somnigroup $(SGI)$ is 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. Our portfolio includes the most highly recognized brands in the industry, including Tempur-Pedic$(R)$, Sealy(R), Stearns & Foster(R), and Sleepy's(R), 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.
Investor Relations Contact:
Lauren Avritt
Investor Relations
Somnigroup International Inc.
Investor.relations@somnigroup.com
SOMNIGROUP INTERNATIONAL INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Loss)
(in millions, except percentages and per common share amounts)
(unaudited)
Three Months Ended
March 31, Chg %
---------------------------- ---------
2026 2025
------------- -------------
Net sales $ 1,801.5 $ 1,604.7 12.3 %
Cost of sales 1,024.6 1,024.2
------------- -------------
Gross profit 776.9 580.5 33.8 %
Selling and marketing expenses 428.5 362.6
General, administrative and other
expenses 166.9 209.5
Equity income in earnings of
unconsolidated affiliates (5.6) (4.8)
------------- -------------
Operating income 187.1 13.2 1,317.4 %
Other expense, net:
Interest expense, net 60.0 61.3
Other (income) expense, net (10.2) 1.2
------------- -------------
Total other expense, net 49.8 62.5
Income (loss) before income taxes 137.3 (49.3) 378.5 %
Income tax (provision) benefit (33.4) 16.5
Net income (loss) before
non-controlling interest 103.9 (32.8) 416.8 %
Less: Net (loss) income
attributable to non-controlling
interest (0.3) 0.3
------------- -------------
Net income (loss) attributable to
Somnigroup International Inc. $ 104.2 $ (33.1) 414.8 %
============= =============
Earnings (loss) per common share:
Basic $ 0.50 $ (0.17) 394.1 %
============= =============
Diluted $ 0.49 $ (0.17) 388.2 %
============= =============
Weighted average common shares
outstanding:
Basic 210.3 194.9
============= =============
Diluted 212.6 198.9
============= =============
SOMNIGROUP INTERNATIONAL INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in millions)
March 31, 2026 December 31, 2025
------------------------------ ---------------------------
ASSETS (unaudited)
Current Assets:
Cash and cash
equivalents $ 110.8 $ 134.9
Accounts
receivable,
net 339.1 358.5
Inventories 631.0 630.0
Prepaid
expenses and
other current
assets 164.8 170.7
Total Current
Assets 1,245.7 1,294.1
Property, plant
and equipment,
net 1,009.8 1,019.2
Goodwill 4,586.9 4,595.9
Trade name and
other
intangible
assets, net 2,582.6 2,587.1
Operating lease
right-of-use
assets 1,876.4 1,878.8
Deferred income
taxes 18.3 18.5
Other
non-current
assets 219.9 207.1
------------------------------ ---------------------------
Total Assets $ 11,539.6 $ 11,600.7
============================== ===========================
LIABILITIES AND
STOCKHOLDERS'
EQUITY
Current
Liabilities:
Accounts
payable $ 465.1 $ 401.6
Accrued
expenses and
other current
liabilities 610.1 636.5
Short-term
operating
lease
obligations 400.7 399.6
Current portion
of long-term
debt 112.1 112.4
Income taxes
payable 18.2 15.1
Total Current
Liabilities 1,606.2 1,565.2
Long-term debt,
net 4,436.4 4,573.3
Long-term
operating
lease
obligations 1,585.3 1,589.8
Deferred income
taxes 625.7 624.9
Other
non-current
liabilities 130.7 130.6
------------------------------ ---------------------------
Total
Liabilities 8,384.3 8,483.8
Redeemable
non-controlling
interest 7.9 8.9
Total
Stockholders'
Equity 3,147.4 3,108.0
------------------------------ ---------------------------
Total
Liabilities,
Redeemable
Non-Controlling
Interest and
Stockholders'
Equity $ 11,539.6 $ 11,600.7
============================== ===========================
SOMNIGROUP INTERNATIONAL INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in millions)
(unaudited)
Three Months Ended
March 31,
-----------------------------------------------------
2026 2025
------------------------- --------------------------
CASH FLOWS FROM
OPERATING
ACTIVITIES:
Net income (loss)
before
non-controlling
interest $ 103.9 $ (32.8)
Adjustments to
reconcile net income
(loss) to net cash
provided by
operating
activities:
Depreciation and
amortization 60.9 57.7
Amortization of
stock-based
compensation 11.6 8.4
Amortization of
deferred financing
costs 1.7 1.7
Bad debt expense 1.9 4.7
Deferred income
taxes 1.7 --
Dividends received
from unconsolidated
affiliates 5.3 5.5
Equity income in
earnings of
unconsolidated
affiliates (5.6) (4.8)
Foreign currency
adjustments and
other 2.6 0.8
Changes in operating
assets and
liabilities, net of
effect of business
acquisitions 62.5 65.2
Net cash provided by
operating
activities 246.5 106.4
CASH FLOWS FROM
INVESTING
ACTIVITIES:
Purchases of
property, plant and
equipment (60.5) (24.0)
Acquisitions, net of
cash acquired -- (2,835.0)
Purchases of
investments (0.3) --
Other 0.1 0.1
------------------------- --------------------------
Net cash used in
investing
activities (60.7) (2,858.9)
CASH FLOWS FROM
FINANCING
ACTIVITIES:
Proceeds from
borrowings under
long-term debt
obligations 1,164.9 1,880.4
Repayments of
borrowings under
long-term debt
obligations (1,299.3) (663.1)
Proceeds from
exercise of stock
options -- 1.0
Treasury stock
repurchased (26.2) (37.5)
Dividends paid (36.7) (32.9)
Repayments of
finance lease
obligations and
other (7.4) (5.8)
------------------------- --------------------------
Net cash (used in)
provided by
financing
activities (204.7) 1,142.1
NET EFFECT OF
EXCHANGE RATE
CHANGES ON CASH,
CASH EQUIVALENTS
AND RESTRICTED
CASH (5.2) 11.8
------------------------- --------------------------
Decrease in cash,
cash equivalents and
restricted cash (24.1) (1,598.6)
CASH, CASH
EQUIVALENTS AND
RESTRICTED CASH,
beginning of period 134.9 1,709.7
------------------------- --------------------------
CASH, CASH
EQUIVALENTS AND
RESTRICTED CASH, end
of period $ 110.8 $ 111.1
========================= ==========================
Summary of Channel Sales
The following table highlights net sales information, by channel and by business segment, for the three months ended March 31, 2026 and 2025:
Three Months Ended March 31,
Tempur Sealy North
(in millions) Consolidated Mattress Firm America Tempur Sealy International
--------------------------------- ---------------------------------- ----------------------------------- ----------------------------------
2026 2025 2026 2025 2026 2025 2026 2025
Direct (a) $ 1,196.3 $ 906.0 $ 885.9 $ 593.7 $ 90.0 $ 121.7 $ 220.4 $ 190.6
Wholesale (b) 605.2 698.7 -- -- 473.5 584.5 131.7 114.2
--------------- ---------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
$ 1,801.5 $ 1,604.7 $ 885.9 $ 593.7 $ 563.5 $ 706.2 $ 352.1 $ 304.8
=============== ================ ================ ================ ================= ================ ================ ================
(a) The Direct channel includes company-owned stores, online and call
centers.
(b) The Wholesale channel includes all third party retailers, including third
party distribution, hospitality and healthcare.
SOMNIGROUP INTERNATIONAL INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(in millions, except percentages, ratios and per common share amounts)
The Company provides information regarding adjusted net income, EBITDA, adjusted EBITDA, adjusted EPS, adjusted gross profit, adjusted gross margin, adjusted operating income (expense), adjusted operating margin, consolidated indebtedness and consolidated indebtedness less netted cash, which are not recognized terms under GAAP and do not purport to be alternatives to net income, earnings per share, gross profit, gross margin, operating income (expense) and operating margin as a measure of operating performance, or an alternative to total debt as a measure of liquidity. The Company believes these non-GAAP financial measures provide investors with performance measures that better reflect the Company's underlying operations and trends, providing a perspective not immediately apparent from net income, gross profit, gross margin, operating income (expense) and operating margin. The adjustments management makes to derive the non-GAAP financial measures include adjustments to exclude items that may cause short-term fluctuations in the nearest GAAP financial measure, but which management does not consider to be the fundamental attributes or primary drivers of the Company's business.
The Company believes that exclusion of these items assists in providing a more complete understanding of the Company's underlying results from operations and trends, and management uses these measures along with the corresponding GAAP financial measures to manage the Company's business, to evaluate its consolidated and business segment performance compared to prior periods and the marketplace, to establish operational goals and to provide continuity to investors for comparability purposes. Limitations associated with the use of these non-GAAP financial measures include that these measures do not present all of the amounts associated with the Company's results as determined in accordance with GAAP. These non-GAAP financial measures should be considered supplemental in nature and should not be construed as more significant than comparable financial measures defined by GAAP. Because not all companies use identical calculations, these presentations may not be comparable to other similarly titled measures of other companies. For more information about these non-GAAP financial measures and a reconciliation to the nearest GAAP financial measure, please refer to the reconciliations on the following pages.
Constant Currency Information
In this press release the Company refers to, and in other press releases and other communications with investors the Company 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.
Adjusted Net Income and Adjusted EPS
A reconciliation of reported net income to adjusted net income and the calculation of adjusted EPS are provided below. Management believes that the use of these non-GAAP financial measures provides investors with additional useful information with respect to the impact of various adjustments as described in the footnotes at the end of this release.
The following table sets forth the reconciliation of the Company's reported net income to adjusted net income and the calculation of adjusted EPS for the three months ended March 31, 2026 and 2025:
Three Months Ended
----------------------------------------------------------------
(in millions, except
per share amounts) March 31, 2026 March 31, 2025
------------------------------- -------------------------------
Net income (loss) $ 104.2 $ (33.1)
Business combination
charges (1) 13.9 --
Legal and other
charges (2) 8.6 --
Transaction costs
(3) 3.6 51.9
Acquisition-related
costs (4) -- 114.2
Transaction-related
interest expense,
net (5) -- 6.8
Supply chain
transition costs
(6) -- 3.5
Adjusted income tax
provision (7) (5.8) (46.3)
------------------------------- -------------------------------
Adjusted net income $ 124.5 $ 97.0
=============================== ===============================
Adjusted earnings per
common share,
diluted $ 0.59 $ 0.49
=============================== ===============================
Diluted shares
outstanding 212.6 198.9
=============================== ===============================
Please refer to Footnotes at the end of this release.
Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income (Expense) and Adjusted Operating Margin
A reconciliation of gross profit and gross margin to adjusted gross profit and adjusted gross margin, respectively, and operating income (expense) and operating margin to adjusted operating income (expense) and adjusted operating margin, respectively, are provided below. Management believes that the use of these non-GAAP financial measures provides investors with additional useful information with respect to the impact of various adjustments as described in the footnotes at the end of this release.
The following table sets forth the reconciliation of the Company's reported gross profit and operating income (expense) to the calculation of adjusted gross profit and adjusted operating income (expense) for the three months ended March 31, 2026.
1Q 2026
(in millions, Tempur Tempur
except Sealy North Sealy
percentages) Consolidated Margin Mattress Firm Margin America Margin International Margin Corporate
--------------- ------- ---------------- ------ --------------- ------- ---------------- ------- ----------------
Net sales $ 1,801.5 $ 885.9 $ 563.5 $ 352.1 $ --
Gross profit $ 776.9 43.1 % $ 272.9 30.8 % $ 326.4 57.9 % $ 177.6 50.4 % $ --
Adjustments:
Business
combination
charges (1) 8.7 6.5 2.2 -- --
Total
adjustments 8.7 6.5 2.2 -- --
Adjusted gross
profit $ 785.6 43.6 % $ 279.4 31.5 % $ 328.6 58.3 % $ 177.6 50.4 % $ --
=============== ================ =============== ================ ================
Operating
income
(expense) $ 187.1 10.4 % $ 33.4 3.8 % $ 131.7 23.4 % $ 64.9 18.4 % $ (42.9)
Adjustments:
Business
combination
charges (1) 15.3 9.8 2.9 -- 2.6
Legal and
other
charges (2) 8.6 -- 2.5 -- 6.1
Transaction
costs (3) 3.6 -- -- -- 3.6
Total
adjustments 27.5 9.8 5.4 -- 12.3
Adjusted
operating
income
(expense) $ 214.6 11.9 % $ 43.2 4.9 % $ 137.1 24.3 % $ 64.9 18.4 % $ (30.6)
=============== ================ =============== ================ ================
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