Somnigroup International (TPD) Q2 2026 Earnings Report

The call was predominantly positive. Somnigroup reported record adjusted EPS, strong North American margin expansion, record cash flow, substantial debt reduction, continued international share gains, and progress toward closing the Leggett & Platt combination ahead of schedule. These strengths outweighed the weaker industry backdrop, Mattress Firm margin declines, commodity inflation, Dreams' ERP and U.K. challenges, and the weak July 4 promotional period.

For 2026, Somnigroup expects adjusted EPS to be between $2.85 and $3.15, with sales at the midpoint of approximately $7.6 billion after intercompany eliminations, which are expected to represent approximately 24% of global Tempur Sealy 2026 sales; the global bedding industry is expected to be down mid-single digits year-over-year, Tempur Sealy North America like-for-like sales growing low single digits, International business growing low single digits, and like-for-like Mattress Firm sales down slightly. Reported gross margins are expected to be slightly above 45%, including 100 basis points of net margin expansion from operational efficiencies, adjusted EBITDA is estimated at approximately $1.39 billion at the midpoint, Tempur Sealy brands and private labels are assumed to be in the mid-60s% of Mattress Firm total sales, representing an incremental $65 million of adjusted EBITDA benefit for 2026 versus 2025, with approximately $690 million of advertising investment. CapEx is expected to be approximately $225 million, including $75 million under Mattress Firm store refreshes and brand wall program, CapEx is expected to normalize to $200 million in future years, and at least 50% of free cash flow in 2026 is expected to go toward quarterly dividends and share repurchases; full-year D&A is expected to be approximately $310 million, interest expense approximately $230 million, the tax rate 25%, and diluted share count 213 million shares.