Somnigroup International Reports $33.1M Net Loss Despite 34.9% Sales Surge from Mattress Firm Acquisition

Somnigroup International Inc. reported significant financial changes in its latest quarterly filing, revealing a net loss of $33.1 million for the three months ending March 31, 2025, compared to a net income of $76.3 million during the same period in 2024. The company's total net sales surged by 34.9% to $1.604 billion, primarily driven by the inclusion of $593.7 million in sales from Mattress Firm, which was acquired on February 5, 2025. However, the gross margin decreased to 36.2% from 39.9% year-over-year, attributed to increased costs associated with the acquisition and ongoing macroeconomic pressures.

The acquisition of Mattress Firm, valued at approximately $5.2 billion, marked a pivotal strategic development for Somnigroup. The deal was financed through a combination of cash and the issuance of approximately 34.2 million shares of common stock. The integration of Mattress Firm is expected to enhance Somnigroup's omni-channel strategy, allowing for a more seamless consumer experience across its retail and e-commerce platforms. Additionally, the company completed the divestiture of 73 Mattress Firm retail locations and its Sleep Outfitters subsidiary to Mattress Warehouse, which is not anticipated to materially impact its financial results.

Operationally, Somnigroup's total assets increased to $11.33 billion as of March 31, 2025, up from $5.98 billion at the end of 2024, largely due to the acquisition. The company reported a working capital deficit of $268.9 million, a shift from a working capital surplus of $105.1 million, primarily driven by increased short-term operating lease obligations. The total debt also rose to $5.07 billion, reflecting the financing of the Mattress Firm acquisition. Despite these changes, the company remains compliant with its debt covenants.

Looking ahead, Somnigroup anticipates continued challenges in the bedding industry due to macroeconomic pressures and geopolitical uncertainties. However, the company expects to outperform the industry through strategic investments in product innovation and marketing. The management has indicated a focus on leveraging the Mattress Firm acquisition to drive growth and improve operational efficiencies. The company plans to maintain its capital allocation strategy, balancing investments in growth with shareholder returns, including a declared dividend of $0.15 per share for the second quarter of 2025.