Somnigroup Revises 2026 Adjusted EPS Outlook After Leggett Close

The Tip Desk · November 9, 2026 · 3 min read

The bedding company posted record third-quarter net sales of $2.35 billion and set full-year adjusted EPS at $2.85–$2.95.

Somnigroup International Inc. (SGI) completed its Leggett & Platt acquisition on August 26, 2026, and the stub period through September 30 lifted third-quarter net sales to a record $2,350.8 million, up 10.8% from a year earlier. The world’s leading bedding company said the deal added $372.6 million of sales in that period.

GAAP results moved the other way. Diluted earnings fell 10.8% to $0.74 a share from $0.83, and net income declined 7.8% to $163.5 million. Adjusted earnings per share rose 9.5% to a record $1.04 from $0.95, and adjusted net income increased 13.7% to a record $228.9 million. Operating income decreased 5.5% to $297.4 million, which the company attributed primarily to costs incurred during the quarter related to the Leggett & Platt acquisition. Adjusted operating income increased 6.0% to a record $364.2 million. Gross margin compressed to 42.0% from 44.9%; adjusted gross margin fell to 43.0% from 45.6%.

Mattress Firm, the largest remaining reportable segment, posted net sales of $1,008.3 million, down 5.8%, which the company said was primarily driven by softer online sales. Same-store sales were down slightly. Gross margin held at 34.4%. Operating margin rose to 9.4% from 7.6%, and adjusted operating margin improved 20 basis points to 9.6%. The company said those improvements were primarily driven by favorable co-operative advertising expense, partially offset by the decline in adjusted gross margin.

Tempur Sealy North America net sales decreased 5.8% to $693.1 million, which the company said was primarily driven by market conditions. Wholesale bedding and furnishings fell 7.2% to $581.5 million; direct bedding rose 1.7% to $111.6 million. North America gross margin expanded to 64.7% from 58.4%, and adjusted gross margin improved 690 basis points to 65.5%. The company said those improvements were primarily driven by tariff refunds and synergies from the Mattress Firm acquisition, partially offset by inflation. Operating margin rose to 33.2% from 29.1%.

Tempur Sealy International net sales decreased 12.3% to $276.8 million. The company said the decline was primarily driven by a 34.7% drop at Dreams following implementation of a new ERP system, leading to operational disruption throughout the third quarter, amid challenging market conditions. International excluding Dreams grew high single digits. On a constant-currency basis, International net sales decreased 11.7%. International gross margin declined 360 basis points to 45.5%, which the company said was primarily driven by temporary deleverage at Dreams and mix. Operating margin declined 870 basis points to 9.4%.

Leggett & Platt contributed $372.6 million of stub-period net sales, with $271.3 million in wholesale bedding and furnishings and $101.3 million in specialized products. Stub-period gross margin was 17.7% and operating margin was 5.6%. Corporate operating expense increased to $74.2 million from $37.9 million, primarily from Leggett & Platt acquisition costs.

Cash flows from operations were $349 million in the third quarter. Leverage based on consolidated indebtedness less netted cash to adjusted EBITDA was 2.69 times for the trailing twelve months ended September 30, 2026, compared with 3.28 times a year earlier. Total debt was $5.6 billion at quarter-end.

For the full year 2026, the company revised its expectations for adjusted EPS to a range of $2.85 to $2.95, which it said represents an approximate 7% increase from 2025 adjusted EPS at the midpoint of the range. Chairman and CEO Scott Thompson said the company completed the Leggett & Platt acquisition, improving leverage, enhancing the supply chain and accelerating product development. The board declared a quarterly cash dividend of $0.17 a share, payable December 7, 2026.