SGI

Somnigroup (the renamed Tempur Sealy) closed its transformative Mattress Firm acquisition on February 5, 2025, vertically integrating the leading U.S. bedding manufacturer with the largest U.S. specialty mattress retailer. The deal dominates the financials: revenue surged 51.6% to $7.48B (after holding flat near $4.9B for four straight years), gross profit jumped 57.0% to $3.18B, and total assets nearly doubled (+94.0%) to $11.6B. The company now operates 2,852 owned stores across three segments and reaches consumers in over 100 countries with Tempur-Pedic, Sealy and Stearns & Foster — a genuinely stronger competitive position and an omni-channel moat in a fragmented industry.

But the bottom line has not followed the top line. Net income was essentially flat at $384M (-0.1%) and diluted EPS actually fell 14.8% to $1.84, as the equity issued and debt taken on to fund the deal, plus integration costs and a 44.2% jump in D&A to $291M, ate the added revenue. The balance sheet is now materially more levered: long-term debt rose 22.7% to $4.61B, liabilities/equity climbed to 2.73x, current liabilities ($1.57B) exceed current assets ($1.29B), and cash collapsed 92.1% to $135M. Operating cash flow of $800M (+20.0%) covers the dividend ($127M, +37.4%) and interest, but financial flexibility is much tighter than before.