Latest news with #Somnigroup
Yahoo
2 days ago
- Business
- Yahoo
SGI Q1 Earnings Call: Revenue Miss, Guidance Cut, and Tariff Mitigation Plans Detailed
Bedding manufacturer Somnigroup (NYSE:SGI) missed Wall Street's revenue expectations in Q1 CY2025, but sales rose 34.9% year on year to $1.6 billion. Its non-GAAP EPS of $0.49 per share was 5.1% above analysts' consensus estimates. Is now the time to buy SGI? Find out in our full research report (it's free). Revenue: $1.6 billion (34.9% year-on-year growth) Adjusted EPS: $0.49 vs analyst estimates of $0.47 (5.1% beat) Adjusted Operating Income: $182.8 million vs analyst estimates of $185.4 million (11.4% margin, 1.4% miss) Management lowered its full-year Adjusted EPS guidance to $2.47 at the midpoint, a 11.6% decrease Operating Margin: 0.8%, down from 11.1% in the same quarter last year Market Capitalization: $13.6 billion Somnigroup's first quarter performance was shaped by the initial integration of Mattress Firm and the ongoing launch of new product lines, particularly the Sealy Posturepedic collection in North America. CEO Scott Thompson cited 'continued strong performance in our international business' and highlighted solid mid-single-digit sales growth in key markets, despite the impact of foreign exchange. Management also addressed weaker-than-expected U.S. consumer demand over the President's Day period and a challenging market backdrop. The company's operational focus included expanding distribution, accelerating private label initiatives, and streamlining logistics, all of which were intended to counteract industry headwinds and drive market share gains. Looking forward, Somnigroup's revised outlook reflects lowered expectations for the U.S. bedding market, with management now projecting a mid-single-digit industry decline for the year. CFO Bhaskar Rao attributed the guidance cut primarily to a 'rapid change in consumer confidence or sentiment in the U.S.,' describing it as volatile and policy-driven. The company plans to offset new tariff costs by combining supplier negotiations and price increases, which are set to take effect in the third quarter. Management emphasized upcoming marketing campaigns and the ongoing rollout of the Sealy collection as potential drivers for a modest second-half improvement, though they cautioned that overall industry demand is likely to remain subdued. Management discussed the integration of Mattress Firm, evolving market conditions, and the company's response to tariff developments as major themes impacting the quarter. International business momentum: The international segment, led by the Tempur brand, delivered mid-single-digit sales growth on a reported basis and high single digits in constant currency. Management highlighted the success of new Tempur products and an expanded price range that increased distribution opportunities and market reach. Sealy Posturepedic launch progress: The comprehensive rebranding and rollout of the Sealy Posturepedic collection in North America was a major operational focus. Early locations showed encouraging results, and the product is expected to be widely available by Memorial Day, supported by a national advertising campaign. Mattress Firm integration and synergies: Somnigroup completed the first phase of integrating Mattress Firm, focusing on leadership alignment, cost reduction, and logistics optimization. The company increased its near-term synergy target for 2025 to $15 million and is leveraging Mattress Firm's home delivery network for enhanced operational efficiency. Tariff mitigation strategy: Facing new tariffs, Somnigroup acted to reduce exposure through supplier changes and cost-sharing arrangements. The remaining impact will be addressed by a 2% price increase in North America, effective in the third quarter, with management expecting the combination of actions to fully offset the tariff cost. Advertising and merchandising changes: Somnigroup is doubling down on advertising scale, aiming for more effective campaigns by aligning messaging and leveraging buying power. Mattress Firm is also expanding its assortment through new vendor partnerships and increasing the share of Tempur Sealy-manufactured products, including an expanded private label offering. Somnigroup's updated outlook centers on cautious U.S. consumer sentiment, cost pressures from tariffs, and the pace of synergy realization from the Mattress Firm acquisition. Consumer confidence uncertainty: Management attributed the lower guidance to a double-digit decline in U.S. consumer confidence, which it sees as the main determinant of short-term demand. While this index is considered highly volatile and policy-sensitive, any recovery in sentiment could improve sales trends. Tariff pass-through and cost management: The company expects to manage increased tariff-related costs by shifting suppliers and raising prices. While these actions are intended to neutralize the margin impact, there is a lag in implementation, leading to a temporary headwind in the second quarter. New product and marketing initiatives: The ongoing rollout of the Sealy Posturepedic collection and the reimagined Mattress Firm advertising campaign are expected to drive incremental demand in the second half. Management is also focused on merchandising changes and expanded vendor partnerships to enhance store traffic and average order value. In the coming quarters, the StockStory team will be watching (1) the pace of synergy realization and operational improvements following the Mattress Firm acquisition, (2) the market response to new product launches and expanded vendor partnerships, and (3) the effectiveness of tariff mitigation and price increase strategies. Progress on these fronts, as well as shifts in U.S. consumer confidence, will be key indicators of future performance. Somnigroup currently trades at a forward P/E ratio of 22.7×. Should you double down or take your chips? See for yourself in our full research report (it's free). Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
Yahoo
27-05-2025
- Business
- Yahoo
Somnigroup (SGI): Buy, Sell, or Hold Post Q1 Earnings?
Somnigroup currently trades at $65.70 and has been a dream stock for shareholders. It's returned 293% since May 2020, more than tripling the S&P 500's 90.8% gain. The company has also beaten the index over the past six months as its stock price is up 17.7%. Is there a buying opportunity in Somnigroup, or does it present a risk to your portfolio? Dive into our full research report to see our analyst team's opinion, it's free. We're happy investors have made money, but we're swiping left on Somnigroup for now. Here are three reasons why there are better opportunities than SGI and a stock we'd rather own. A company's long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Somnigroup grew its sales at a 10.6% annual rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the consumer discretionary sector, which enjoys a number of secular tailwinds. ROIC, or return on invested capital, is a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity). We like to invest in businesses with high returns, but the trend in a company's ROIC is what often surprises the market and moves the stock price. Over the last few years, Somnigroup's ROIC has unfortunately decreased significantly. We like what management has done in the past, but its declining returns are perhaps a symptom of fewer profitable growth opportunities. Debt is a tool that can boost company returns but presents risks if used irresponsibly. As long-term investors, we aim to avoid companies taking excessive advantage of this instrument because it could lead to insolvency. Somnigroup's $5.03 billion of debt exceeds the $111.1 million of cash on its balance sheet. Furthermore, its 5× net-debt-to-EBITDA ratio (based on its EBITDA of $973.5 million over the last 12 months) shows the company is overleveraged. At this level of debt, incremental borrowing becomes increasingly expensive and credit agencies could downgrade the company's rating if profitability falls. Somnigroup could also be backed into a corner if the market turns unexpectedly – a situation we seek to avoid as investors in high-quality companies. We hope Somnigroup can improve its balance sheet and remain cautious until it increases its profitability or pays down its debt. Somnigroup's business quality ultimately falls short of our standards. With its shares topping the market in recent months, the stock trades at 22.2× forward P/E (or $65.70 per share). Investors with a higher risk tolerance might like the company, but we think the potential downside is too great. We're pretty confident there are superior stocks to buy right now. Let us point you toward the Amazon and PayPal of Latin America. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
12-05-2025
- Business
- Yahoo
Somnigroup Announces Launch of Secondary Offering of Common Stock
DALLAS, May 12, 2025 /PRNewswire/ -- Somnigroup International Inc. (NYSE: SGI, "Company" or "Somnigroup") today announced the launch of a secondary offering (the "Offering") of 15,376,743 shares of its common stock, par value $0.01 per share, by the former majority shareholder of Mattress Firm Group Inc., which shareholder is a subsidiary of IBEX Topco B.V. (the "Selling Stockholder"). All of the shares of common stock are being sold by the Selling Stockholder, and Somnigroup will not receive any of the proceeds from the Offering. Goldman Sachs & Co. LLC is acting as the sole underwriter for the Offering. The shares of common stock are being offered pursuant to the Company's automatically effective shelf registration statement (and prospectus) on Form S-3 previously filed with the U.S. Securities and Exchange Commission (the "SEC"). The Offering will be made only by means of a preliminary prospectus supplement and the accompanying prospectus. Before you invest, you should read the preliminary prospectus supplement and the accompanying prospectus in that registration statement and other documents the Company has filed with the SEC for more complete information about the Company and the Offering. You may obtain these documents for free by visiting EDGAR on the SEC website at Alternatively, a copy of the preliminary prospectus supplement and accompanying prospectus may be obtained by contacting: Goldman Sachs & Co. LLC, Prospectus Department, 200 West Street, New York, NY 10282, telephone: 1-866-471-2526, facsimile: 212-902-9316 or by emailing Prospectus-ny@ This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities law of any such state or jurisdiction. 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 Offering, the Company's expectations regarding the Mattress Firm acquisition, expectations regarding post-closing supply agreements, future performance, integration of acquired companies with our business, 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 conflict in the Middle East), the imposition of new tariffs or retaliatory tariffs, increases in existing tariffs and other changes in trade policy and regulations, 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 2025 and subsequent periods and the Company's expectations for sales and adjusted EPS 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 Mattress Firm's ongoing operations; the ability to successfully integrate Mattress Firm into the Company's operations and realize synergies from the transaction; the possibility that the expected benefits of the acquisition 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; 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, 2024 and Quarterly Report on Form 10-Q for the quarter ended March 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 Somnigroup (NYSE: SGI) is the world's largest bedding company, dedicated to improving people's lives through better sleep. 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®, Sealy®, Stearns & Foster®, and Sleepy's®, 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. Somnigroup Investor Relations Contact Aubrey MooreInvestor RelationsSomnigroup International View original content: SOURCE Somnigroup International
Yahoo
09-05-2025
- Business
- Yahoo
David Abrams' Strategic Moves: Energy Transfer LP Sees Significant Reduction
David Abrams (Trades, Portfolio) recently submitted the 13F filing for the first quarter of 2025, providing insights into his investment moves during this period. David Abrams (Trades, Portfolio) founded Abrams Capital Management in 1999, where he is the CEO and portfolio manager. Before establishing the Boston-based firm, he worked with Bauposts Seth Klarman (Trades, Portfolio) for 10 years. Describing itself as "opportunistic," Abrams Capital Management follows a fundamental, value-oriented approach to investing. The firm relies on a value approach that emphasizes a company's fundamentals to stocks. It typically invests for the long term in a concentrated number of holdings, spreading its assets across stocks, debt instruments, distressed debt, and illiquid investments, among other classes. Warning! GuruFocus has detected 4 Warning Sign with LOAR. David Abrams (Trades, Portfolio) also increased stakes in a total of 2 stocks, among them: The most notable increase was Somnigroup International Inc (NYSE:SGI), with an additional 2,245,246 shares, bringing the total to 5,845,246 shares. This adjustment represents a significant 62.37% increase in share count, a 2.39% impact on the current portfolio, with a total value of $350,013,330. The second largest increase was Lithia Motors Inc (NYSE:LAD), with an additional 53,490 shares, bringing the total to 2,444,678. This adjustment represents a significant 2.24% increase in share count, with a total value of $717,610,780. David Abrams (Trades, Portfolio) also reduced positions in 2 stocks. The most significant changes include: Reduced Energy Transfer LP (NYSE:ET) by 11,628,545 shares, resulting in a -65.2% decrease in shares and a -3.66% impact on the portfolio. The stock traded at an average price of $19.48 during the quarter and has returned -11.99% over the past 3 months and -9.01% year-to-date. Reduced Meta Platforms Inc (NASDAQ:META) by 162,997 shares, resulting in a -29.22% reduction in shares and a -1.53% impact on the portfolio. The stock traded at an average price of $645.17 during the quarter and has returned -17.00% over the past 3 months and 1.28% year-to-date. At the first quarter of 2025, David Abrams (Trades, Portfolio)'s portfolio included 13 stocks, with top holdings including 46.92% in Loar Holdings Inc (NYSE:LOAR), 12.73% in Lithia Motors Inc (NYSE:LAD), 8.26% in Asbury Automotive Group Inc (NYSE:ABG), 6.21% in Somnigroup International Inc (NYSE:SGI), and 5.83% in Alphabet Inc (NASDAQ:GOOGL). The holdings are mainly concentrated in 7 of all the 11 industries: Industrials, Consumer Cyclical, Communication Services, Financial Services, Energy, Technology, and Healthcare. This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein. This article first appeared on GuruFocus.
Yahoo
08-05-2025
- Business
- Yahoo
Somnigroup (NYSE:SGI) Misses Q1 Sales Targets, Stock Drops
Bedding manufacturer Somnigroup (NYSE:SGI) missed Wall Street's revenue expectations in Q1 CY2025, but sales rose 34.9% year on year to $1.60 billion. Its non-GAAP profit of $0.49 per share was 5.1% above analysts' consensus estimates. Is now the time to buy Somnigroup? Find out in our full research report. Revenue: $1.60 billion vs analyst estimates of $1.63 billion (34.9% year-on-year growth, 1.8% miss) Adjusted EPS: $0.49 vs analyst estimates of $0.47 (5.1% beat) Adjusted EBITDA: $247.9 million vs analyst estimates of $255.6 million (15.4% margin, 3% miss) Management lowered its full-year Adjusted EPS guidance to $2.47 at the midpoint, a 11.6% decrease Operating Margin: 0.8%, down from 11.1% in the same quarter last year Free Cash Flow Margin: 5.1%, down from 8.3% in the same quarter last year Market Capitalization: $12.64 billion Company Chairman and CEO Scott Thompson commented, "Our results this quarter both reflect the transformational acquisition of Mattress Firm and highlight our ability to navigate a weak global market. All of our business units, domestically and internationally, successfully made progress on their growth opportunities as we leverage the core strengths of our business, including scale, operational flexibility and manufacturing capabilities. I continue to be impressed by our people, all around the world, as they focus on execution and taking care of our customers to deliver share gains and efficient cost management across the Somnigroup enterprise. Everyone in the organization has stepped up to quickly advance our near and longer term initiatives to continue delivering value to shareholders." Established through the merger of Tempur-Pedic and Sealy in 2012, Somnigroup (NYSE:SGI) is a bedding manufacturer known for its innovative memory foam mattresses and sleep products A company's long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Somnigroup grew its sales at a 10.6% annual rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the consumer discretionary sector, which enjoys a number of secular tailwinds. We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Somnigroup's recent performance shows its demand has slowed as its annualized revenue growth of 4.6% over the last two years was below its five-year trend. We can better understand the company's revenue dynamics by analyzing its most important segments, Wholesale and Direct, which are 43.5% and 56.5% of revenue. Over the last two years, Somnigroup's Wholesale revenue (sales to retailers) averaged 3.4% year-on-year declines. On the other hand, its Direct revenue (sales made directly to consumers) averaged 29.2% growth. This quarter, Somnigroup pulled off a wonderful 34.9% year-on-year revenue growth rate, but its $1.60 billion of revenue fell short of Wall Street's rosy estimates. Looking ahead, sell-side analysts expect revenue to grow 48.8% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and implies its newer products and services will spur better top-line performance. Software is eating the world and there is virtually no industry left that has been untouched by it. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming. Click here to access a free report on our 3 favorite stocks to play this generational megatrend. Somnigroup's operating margin has shrunk over the last 12 months, but it still averaged 10.8% over the last two years, decent for a consumer discretionary business. This shows it generally does a decent job managing its expenses. This quarter, Somnigroup's breakeven margin was down 10.2 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue. We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company's growth is profitable. Somnigroup's EPS grew at a remarkable 16.2% compounded annual growth rate over the last five years, higher than its 10.6% annualized revenue growth. However, this alone doesn't tell us much about its business quality because its operating margin didn't expand. In Q1, Somnigroup reported EPS at $0.49, down from $0.50 in the same quarter last year. Despite falling year on year, this print beat analysts' estimates by 5.1%. Over the next 12 months, Wall Street expects Somnigroup's full-year EPS of $2.54 to grow 13%. It was encouraging to see Somnigroup beat analysts' EPS expectations this quarter. On the other hand, its full-year EPS guidance missed significantly and its revenue fell short of Wall Street's estimates. Overall, this quarter could have been better. The stock traded down 5.9% to $57.03 immediately following the results. Somnigroup didn't show it's best hand this quarter, but does that create an opportunity to buy the stock right now? If you're making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it's free. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
