Somnigroup International Inc Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Susan Maklari - Goldman Sachs - Analyst : Thank you. Good morning, everyone.

Question: Susan Maklari - Goldman Sachs - Analyst : Good morning, Scott. I want to start with your expectations for some normalization in the industry this year. I guess, can you talk a bit more about what is driving that outlook, given the macro environment that we're coming into the year with and the state of the consumer, and then just talk a bit about your ability to execute against that and how we should think about first half versus second half.

Question: Rafe Jadrosich - BofA Securities - Analyst : Hi, good morning. Thanks for taking my question. I just wanted to follow up on the long term guidance that you provided, the $485. Can you give a little bit more color on how much of that is accretion maybe relative to core TPX? And is that assuming $100 million of synergies, or is that just getting operating leverage on Mattress Firm? And then just, so I know it's a long question, but then the mid-single digit growth you're assuming is that industry or is that TPX and then industry something below that. Thank you.

Question: Bobby Griffin - Raymond James - Analyst : Good morning, everybody. Thanks for taking my questions and congrats on getting the deal done.

Question: Bobby Griffin - Raymond James - Analyst : So I guess I want to first hit on just the core Tempur Sealy, manufacturing efficiencies and kind of your view of the gross margins that we saw in fiscal year '24. Is that a fair starting base? Where do you think things are? Is the business over earning on some aspects, under earning on others? Just kind of level set us then. And then my second part I'm going to do a two part question that Scott loves the 260 low end of guidance versus reporting 255, can you maybe just connect that? Is that just industry down again in '25 just, that basically flat despite having mattress from in there just curious on the on the low end of guidance the drivers behind that.

Question: Peter Keith - Piper Sandler Companies - Analyst : Hey, thanks. Good morning. Nice finish to the year. Congrats on the acquisition. If we just think about that EPS range for the full year of $2.60 to $2.80, is there a way you could break out how you're contemplating the EPS accretion from that mattress from acquisition?

Question: Keith Hughes - Truist Securities - Analyst : Yeah I can hear you now. Sorry about that. So building on the last question, I know you haven't been able to, as you said, talk really talk to mattress so much during the trial. At what point do you think you will have a better view of what other things you could do together is that something at the beginning of next year? How long do you think it will take?

Question: Seth Basham - Wedbush Securities Inc. - Analyst : Thanks a lot. Good morning and congratulations. Just on the long term guide, Scott, in terms of 20% EPS growth, maybe you could break that down for us, and tell us how much you expect from deleveraging. In other words, how much growth do you expect over the time period in EBITDA versus EPS? Thank you.

Question: Bradley Thomas - KeyBanc Capital Markets Inc. - Analyst : Hi, good morning. Congrats again on closing the deal here. My question was just, Scott, if you could talk a little bit about the recent trends that you've been seeing at Mattress Firm, and if you could talk a little bit how you're thinking about same store sales for the business in 2025 and then maybe lastly if you could just address the leadership transition underway and thanks.

Question: Jonathan Matuszewski - Jefferies - Analyst : Great, good morning, and thanks for taking my question. It was a follow up on synergies, recognizing kind of those hard walls are just coming down now, but just curious about kind of the cadence of that realization, obviously $10 million in the second half, that'll ramp in '26 and '27. But just try understand how the buckets will evolve over time in terms of, what that $10 million is initially coming from, whether it's logistics or manufacturing efficiencies or life cycle management, et cetera. And kind of how those buckets evolve as those synergies ramp in '26 and '27. Thanks so much.

Question: Laura Champine - Loop Capital - Analyst : Thanks for taking my question and sorry if it's duplicative. I'm juggling calls this morning, but once you digest Mattress Firm, what's your outlook for retail location growth? Call it '26 and beyond in across your platforms US and UK.

Question: Phillip Blee - William Blair - Analyst : Hi, good morning. Appreciate your time. Can you talk a bit more about the upcoming Sealy launch? How do you think about that brand's growth potential this year compared to Tempur Sealy over the past few years during their product launches, and what kind of contribution that can have this year? And then Bhaskar on the margins side, I know that there's a lot going on with gross margin this year, but how should we think about any headwinds related to, brand mix going forward? Thank you.

Question: William Rutter - BofA Global Research - Analyst : Hi, I just have one. I was wondering if you'd given any thought to the new potential reciprocal tariffs that, may be put into place, and if you've done any work around what that, could mean if the, policies that were announced last Thursday, so February 13, were put in place in terms of margin headway. That's it. Thanks.