What changed in this filing

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Item 1. Business

2026-02-27 compared with 2025-02-28 · 91 added, 102 removed, 157 unchanged (55% of the section changed)

Somnigroup is the world's largest bedding company, dedicated to enriching people's lives through the power of a good night's sleep.

Somnigroup is the world's largest bedding company, dedicated to enriching people's lives through the power of a good night's sleep and transforming how the world sleeps.

With superior capabilities in design, manufacturing, distribution and retail, we deliver breakthrough sleep solutions and serve the evolving needs of consumers in over 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® and Stearns & Foster®, 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.

We seek to deliver long-term value for our shareholders through prudent capital allocation, including managing investments in our businesses.

We are guided by our core value of Doing the Right Thing and committed to our global responsibility to protect the environment and the communities in which we operate.

Somnigroup has a strong competitive presence in the bedding marketplace with a leadership position that comes from product and service quality, culture, strategy and people, backed with financial strength and a disciplined approach to returning value to shareholders.

On February 5, 2025, we completed the previously announced acquisition of Mattress Firm, the nation's largest mattress specialty retailer.

The total purchase price was approximately $5.1 billion.

The transaction was funded by approximately $2.8 billion of cash consideration (subject to adjustments, including the repayment of Mattress Firm's debt and other customary items) and 34.2 million shares of common stock.

The cash payment was funded using a combination of cash on hand and proceeds from existing borrowings.

Mattress Firm was founded in 1986 and operates over 2,200 brick and mortar retail locations and a growing e-commerce platform.

Mattress Firm's highly trained retail sales associates provide personalized service to help consumers choose the ideal bedding products across their robust assortment of market-leading brands.

Due to the close proximity of the Mattress Firm acquisition to the filing of this Report, our assessment of the newly acquired business remains ongoing as of the date of this Report.

We will incorporate information on the Mattress Firm business as required beginning in the first quarter of 2025.

The total purchase price was approximately $5.1 billion, net of cash acquired of $0.3 billion.

The aggregate purchase price consisted of $3.1 billion in cash and approximately 34.2 million shares of common stock valued at $65.65 per share, which represents the simple average of the opening and closing price per share of our common stock on the NYSE on the trading day immediately prior to the date of acquisition, with the value of any fractional shares paid in cash.

In connection with the closing of the Mattress Firm Acquisition, we amended our Certificate of Incorporation to change our name to "Somnigroup International Inc." effective February 18, 2025.

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Somnigroup's purpose is to drive long-term shareholder returns through sustainable competitive advantages and disciplined capital allocation as we oversee our investments in the $120 billion global sleep industry.

To comply with commitments made in securing approval for our acquisition of Mattress Firm, we set our merchandising plan to provide 43% of horizontal premium ($1,500+) floor slots, on average across all our open Mattress Firm stores, for the placement of third-party premium mattresses as assessed at calendar year end.

To monitor the Company's fulfillment of the merchandising plan, the Company has designed and instituted certain protocols in conjunction with an independent consulting firm.

Based on these protocols, management determined that the Company was in compliance with the floor slot commitment as assessed on December 31, 2025.

Our powerful distribution and retail model operates through an omni-channel strategy.

Somnigroup's combined global footprint includes approximately 2,800 retail stores, 30 e-commerce platforms, 71 manufacturing facilities and four state-of-the-art research and development facilities worldwide.

As of December 31, 2025, Somnigroup's combined global footprint included over 2,800 retail stores, approximately 30 e-commerce platforms, over 70 manufacturing facilities and four state-of-the-art research and development facilities worldwide.

Our combined operations are supported by more than 20,000 employees with a collective focus on providing breakthrough sleep solutions to consumers.

Our long-term strategy is to drive earnings growth with high return on invested capital and strong free cash flow, which is a non-GAAP financial measure.

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When doing so, we seek to balance our assessment of the industry environment, our business outlook and the potential for further strategic expansion, while also prudently managing our business.

In 2024, we operated in two segments:

North America and International.

Corporate operating expenses are not included in either of the segments and are presented separately as a reconciling item to consolidated results.

The North America and International segments are strategic business units that are managed separately based on geography.

Our North America segment consists of manufacturing, distribution and retail subsidiaries and licensees located in the U.S., Canada and Mexico.

Our International segment consists of manufacturing, distribution and retail subsidiaries, joint ventures and licensees located in Europe, Asia-Pacific and Latin America (other than Mexico).

Following the acquisition of Mattress Firm and beginning in the first quarter of 2025, we will operate in three segments:

Tempur Sealy North America, Tempur Sealy International and Mattress Firm.

Our principal executive office is located at 1000 Tempur Way, Lexington, Kentucky 40511 and our telephone number is (800) 878-8889.

Following the completion of the Mattress Firm Acquisition in the first quarter of 2025, we have operated in three segments:

Mattress Firm, Tempur Sealy North America and Tempur Sealy International.

These segments are strategic business units that are managed separately.

Our Mattress Firm segment consists of retail stores and distribution centers located in the

Our Tempur Sealy North America segment consists of manufacturing, distribution and retail subsidiaries and licensees located in the U.S., Canada and Mexico (other than Mattress Firm retail and distribution locations).

Our Tempur Sealy International segment consists of manufacturing, distribution and retail subsidiaries, joint ventures and licensees located in Europe, Asia-Pacific and Latin America (other than Mexico).

Corporate operating expenses are not included in any of the segments and are presented separately as a reconciling item to consolidated results.

Our principal executive office is located at 100 Crescent Ct.

Suite 700, Dallas, Texas 75201 and our telephone number is (800) 878-8889.

Somnigroup International Inc.

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We have a comprehensive offering of products that appeal to a broad range of consumers, some of which are covered by one or more patents and/or patent applications.

We also routinely introduce new mattress models, launch new products and update our existing mattress products in each of our segments.

In order to achieve our goal of enriching the lives and improving the health of people worldwide through the power of a good night's sleep, one of our strategic initiatives is to leverage and strengthen our comprehensive portfolio of iconic brands and products.

We also routinely introduce new bedding products and update our existing bedding products in each of our segments.

In order to deliver on our mission to be every consumer's choice for better sleep by advancing innovation and expertise in the bedding industry, one of our strategic initiatives is to leverage and strengthen our comprehensive portfolio of iconic brands and products.

Our portfolio of product brands includes many highly recognized brands, including Tempur-Pedic®, Sealy® and Stearns & Foster®, which are described below:

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Our proprietary Tempur material precisely adapts to the shape, weight and temperature of the consumer and creates fewer pressure points, reduces motion transfer and provides personalized comfort and support.

Tempur-Pedic was awarded #1 in Customer Satisfaction for both the in-store and online mattress segments in the J.D.

Power 2024 Mattress Satisfaction Report.

This is the fourth consecutive year winning the online mattress category and the sixth consecutive year winning at least one J.D.

• Stearns & Foster ® - The Stearns & Foster brand offers our consumers high quality mattresses built by certified craftsmen who have been specially trained.

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The Sealy Posturepedic® brand, introduced in 1950, was engineered to provide all-over support and body alignment to allow full relaxation and deliver a comfortable night's sleep.

Sealy was voted America's most-trusted mattress brand by American shoppers in the 2021 American Brand Trust Study.

Sealy was also the #1 best-selling mattress brand according to Furniture Today's 2021 Top 20 U.S.

Bedding Producers methodology, which includes Stearns & Foster®.

• Sleepy's ® - The Sleepy's brand is our private label brand offering at our Mattress Firm stores and online at www.mattressfirm.com.

Sleepy's competes in a space where customers look for quality and value and is positioned to provide high-quality mattresses, made from a wide range of materials, for the right price.

• Non-Branded - Our non-branded product offerings include private label and OEM products, including mattresses, pillows and other bedding products and components at a wide range of price points.

Sleepy's is well-positioned to compete in a space where consumers prioritize quality and value.

• Non-Branded - We offer non-branded products through our OEM business, including mattresses, pillows and other bedding products and components at a wide range of price points.

The addition of non-branded offerings expands our capabilities to service third-party retailers to capture manufacturing profits from bedding brands outside our own.

Our portfolio of retail brands includes Mattress Firm®, Dreams®, Tempur-Pedic® retail stores, SOVA and a variety of other retail brands internationally, which operate in various countries.

In 2026, we plan to launch an all-new collection of Stearns & Foster products in North America.

This new line is designed to further elevate our high‑end traditional innerspring brand by introducing incremental technologies, expanding our range of hybrid offerings, and providing a refreshed aesthetic.

Our portfolio of retail brands includes Mattress Firm®, Dreams®, Tempur-Pedic® retail stores, SOVA retail stores in Sweden and a variety of other retail brands internationally, which operate in various countries.

The retail brands named above are described below:

• Mattress Firm ® - Mattress Firm is the leading multi-branded mattress specialty retailer in the U.S., helping to make better sleep a reality by matching consumers to their perfect mattress through its highly trained team of Sleep Experts® across its 2,200 stores and robust online operations.

Mattress Firm is a leading retailer of brands including Tempur-Pedic®, Sealy®, Stearns & Foster®, Sleepy's®, Beautyrest®, Serta®, Simmons®, Purple® and other leading mattress brands.

• Mattress Firm ® - Mattress Firm is the largest multi-branded mattress specialty retailer in the U.S., helping to make better sleep a reality by matching consumers to their perfect mattress through its highly trained team of Sleep Experts® across its over 2,100 stores and robust online operations.

Mattress Firm is a leading retailer of brands such as Tempur-Pedic®, Sealy®, Stearns & Foster®, Purple®, Sleepy's®, Beautyrest®, Nectar®, Serta®, Simmons®, Tuft & Needle® and tulo®.

• Dreams ® - Dreams is the leading specialty bedding retailer in the United Kingdom ("U.K.").

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• Tempur-Pedic ® retail stores - Tempur-Pedic® retail stores are designed for the consumers that prefer to purchase directly from the manufacturer, and for those seeking a more personalized and educational sales experience.

These retail boutiques are strategically located in high traffic, premium retail centers with customer demographics that closely align to the Tempur-Pedic® customer profile.

These retail boutiques are strategically located in high traffic, premium retail centers that attract customers whose interests and purchasing behaviors align with our brand.

• SOVA - SOVA is a highly respected and well-established premium bedding chain in Sweden.

Our stores are connected to the urban areas of Stockholm, Gothenburg and Malmö.

The assortment primarily focuses on premium to ultra-premium brands and well trained sales staff targeting to sell quality beds with a very high average selling price.

In 2025, we are launching an all-new collection of Sealy Posturepedic® products in North America.

This reinvention of the Sealy Posturepedic® brand is strategically aimed at reigniting growth in the mid-to-entry level market, which has experienced outsize pressures relative to other price points in recent years.

The new collection incorporates innovative technologies, including our proprietary PrecisionFit™ coils that deliver superior support and exceptional comfort.

The assortment primarily focuses on premium to ultra-premium brands and well-trained sales staff targeting to sell quality beds with a strong average selling price.

Omni-Channel Distribution

Our primary selling channels are Wholesale and Direct.

Our primary selling channels are Direct and Wholesale.

These channels align to the operating margin characteristics of our business and our marketplace.

We drive growth in our Wholesale business by growing our share with existing customers, gaining new business, expanding into new channels of distribution and driving slot velocity.

In 2024, we continued to drive this initiative, as we expanded with new third-party retail partners and expanded our company-owned store footprint around the world.

We are continuing to expand our Direct channel to strengthen our distribution footprint and provide alternatives to allow the customer to shop on their preferred terms — whether online or in-store.

Our Direct channel includes company-owned stores, online and call centers and represented 24.9% of net sales in 2024.

Following the acquisition of Mattress Firm, we expect over 60% of our global sales will be direct-to-consumer and no customer will represent more than 5% of global sales.

Our expanded direct channel distribution complements our wholesale business, and we believe this balanced approach enhances the overall global sales potential and profitability of Somnigroup.

For consumers that prefer to purchase directly from the manufacturer and are seeking a more personalized and educational sales experience, we have over 2,800 retail stores worldwide, including our retail stores owned through our international joint venture operations, after giving effect to the anticipated divestitures in the second quarter of 2025 described below.

We operate Tempur-Pedic® retail stores worldwide that provide a low-pressure environment to explore the comprehensive line up of our Tempur-Pedic® products.

Each showroom features knowledgeable Brand Ambassadors who educate potential customers on Tempur-Pedic® products in a relaxed, comfortable environment.

Going forward, we expect our strategy for opening additional locations of Tempur-Pedic® retail stores to continue targeting high traffic, premium locations that complement our existing distribution.

In addition to our high-end Tempur-Pedic® retail stores, we operate Sleep Outfitters®, a specialty mattress retailer that serves consumers across all price points with its extensive selection of Tempur-Pedic®, Sealy® and Stearns & Foster® products.

We expect to complete the previously announced divestiture of Sleep Outfitters®, which includes 103 specialty mattress retail locations and seven distribution centers, to MW SO Holdings Company, LLC ("Mattress Warehouse") in the second quarter of 2025.

We also operate Dreams®, which has developed a successful multi-channel sales strategy, with over 200 brick and mortar retail locations in the U.K., an industry-leading online channel, as well as manufacturing and delivery assets.

Mattress Firm is the leading multi-branded mattress specialty retailer in the U.S., helping to make better sleep a reality by matching consumers to their perfect mattress through its highly trained team of Sleep Experts® across its 2,200 stores and robust online operations.

Direct channel sales represented 63.5% of net sales in 2025, compared to 24.9% in 2024, primarily driven by the acquisition of Mattress Firm.

Our wholesale distribution complements our broad direct channel distribution, and we believe this balanced approach enhances the overall global sales potential and profitability of Somnigroup.

Our Direct channel includes over 2,800 company-owned retail stores and our e-commerce platforms and call centers worldwide.

Growth opportunities for our Direct channel include improving conversion, average order value and traffic, and through opening new brick and mortar stores and e-commerce channels.

Our Wholesale channel includes sales of product to third-party retailers, hospitality businesses and healthcare customers.

Growth opportunities for our Wholesale business include driving slot velocity, increasing our slot placements with existing customers and expanding distribution through new retail partners and alternative distribution channels.

Our third-party retailers, Mattress Firm®, Tempur-Pedic® retail stores, Dreams® and our other company-owned store concepts reach the vast majority of consumers who still prefer to touch and feel a mattress and speak to a retail sales associate prior to making a purchase decision.

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For customers that prefer the convenience of making purchases online and having their bedding products delivered right to their front door, we have evolved our distribution model to include multiple online options to reach those that want to purchase our products without the need to go into a brick-and-mortar store.

Our overall marketing strategy is to drive consumer demand through the use of effective marketing.

We invest across multiple media platforms to build brand awareness and drive consumer interest in our products.

The majority of our advertising programs are created on a centralized basis through our in-house marketing team.

We plan to drive net sales through continued investments in new products, marketing and other initiatives.

We advertise nationally on television, in digital media and through consumer and trade print.

In addition, we participate in cooperative advertising on a shared basis with some of our retail customers.

Throughout the year, we invested in a series of strategic marketing initiatives, which included new product introductions, advertising and in-store marketing investments.

Our overall marketing strategy is to drive consumer demand for our brands by distinguishing them in the marketplace.

To accomplish this, we target each brand to a particular and complementary audience, and tailor our product design/development, distribution and advertising accordingly.

To maximize awareness and purchase intent for our brands, we invest at industry-leading levels in national television, radio, search-engine marketing, social media and other media channels.

We also complement our own direct-to-consumer marketing activities and investments with marketing activity conducted in cooperation with our retail partners.

This activity includes investments in co-operative advertising, new product launches and the deployment of in-store point-of-sale material and training programs designed to enhance the visibility of, and advocacy, for our brands.

We believe that sales of products to furniture and bedding stores are typically subject to modest seasonality inherent in the bedding industry, with sales expected to be generally lower in the second and fourth quarters.

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bedding industry generally experiences increases in sales around holidays and promotional periods.

Manufacturing and Distribution

In 2023, we opened our newest and largest state-of-the-art manufacturing facility in Crawfordsville, Indiana.

The facility has the capabilities to manufacture a wide variety of bedding products and components for branded and non-branded operations.

The facility's Midwest location enables us to balance manufacturing and distribution in the region, allowing us to more efficiently service our customers and capture the projected long-term demand to support our OEM business.

Mattress Firm

Manufacturers ship merchandise directly to our national network of 62 distribution centers that serve our over 2,100 retail stores and e-commerce operations.

Our merchandise is received, inspected and processed at our distribution centers and then delivered to customers’ homes or to stores through third-party delivery services.

Our products are currently manufactured and distributed through our global network of facilities.

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We also purchase a significant portion of our Sealy foundation parts from third-party sources.

Our Mattress Firm segment sources finished goods from various bedding manufacturers, including our Tempur Sealy North America segment.

Additionally, we source our adjustable bed bases and foundations from third-party manufacturers.

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Industry and Competition

We compete in the global bedding industry.

The bedding industry is comprised of mattresses and foundations, pillows and accessories.

We compete in the global bedding industry, comprised of mattresses and foundations, pillows and accessories.

The mattress category is comprised of traditional innerspring mattresses and non-innerspring mattresses, which includes visco-elastic and foam mattresses, innerspring/foam hybrid mattresses, airbeds and latex mattresses.

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Additionally, the pillow market is comprised of traditional foam and feather pillows, as well as pillows made of visco-elastic, latex, foam, gel, rubber and down.

The primary distribution channels for bedding products are retail furniture and bedding stores, big-box retailers and online.

We encounter competition from a number of bedding manufacturers.

The domestic market is highly concentrated, while the international market is highly fragmented and served by a large number of manufacturers, primarily operating on a regional and local basis.

The primary distribution channels for bedding products are retail furniture and bedding stores, big-box retailers and e-commerce channels.

We encounter competition from other bedding manufacturers and retailers.

The domestic market for manufacturers is concentrated and the domestic market for retailers is fragmented.

The international market for both manufacturers and retailers is highly fragmented, with a large number of competitors primarily operating on a regional and local basis.

Participants in the global bedding industry offer a broad range of mattress, bed base and pillow products and compete primarily on price, quality, brand name recognition, product availability and product performance.

Manufacturers and retailers in the global bedding industry are seeking to increase their channels of distribution and are looking for new ways to reach the consumer, including the expansion in the number of U.S.

Manufacturers and retailers in the global bedding industry are seeking to increase their channels of distribution and are looking for new ways to reach the consumer, resulting in an increase in the number of U.S.

and international companies pursuing online direct-to-consumer models for mattresses.

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Patents, Trademarks and Licensing

We hold over one thousand U.S.

As of December 31, 2025, we hold over one thousand U.S.

and foreign patents and patent applications regarding certain elements of the design and function of many of our mattress and pillow products.

As of December 31, 2025, we held thousands of trademark registrations worldwide, which we believe have significant value and are important to the marketing of our products to retailers and consumers.

Tempur®, Tempur-Pedic®, Sealy®, Sealy Posturpedic® and Stearns & Foster® are our primary trademarks registered with the U.S.

Tempur®, Tempur-Pedic®, Sealy®, Sealy Posturpedic®, Stearns & Foster®, Sleepy's® and Mattress Firm® are our primary trademarks registered with the U.S.

Patent and Trademark Office and various foreign trademark offices, as are many other of our registered trademarks and pending applications.

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We also provide our licensees with product specifications, research and development, statistical services and marketing programs.

For the year ended December 31, 2024, our licensing activities as a whole generated royalties of approximately $31.5 million.

We license the Mattress Firm® trademark to our retail franchisees for use in retail store operations in certain U.S.

jurisdictions in exchange for royalty fees.

For the year ended December 31, 2025, our licensing activities generated royalty and franchise revenue of $39.5 million.

Governmental Regulation

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The regulations generally impose requirements as to the proper labeling of bedding merchandise, restrictions regarding the identification of merchandise as "new" or otherwise, controls as to chemical and other substances, hygiene and other aspects of product safety, handling, marketing and sale and penalties for violations.

New regulations can require us to change the way in which our products are labelled and marketed.

For example, the European Union's new General Product Safety Regulation, which came into force on December 13, 2024, required us to make changes to the way in which our products are labelled and to add product safety and manufacturer information to all of our online product listings.

government has recently introduced a new draft framework law on product regulation which may have a similar impact.

New regulations can require us to change the way in which our products are labeled and marketed.

For example, the European Union's General Product Safety Regulation, which came into force on December 13, 2024, required us to make changes to the way in which our products are labeled and to add product safety and manufacturer information to all of our online product listings.

In July 2025, the U.K.

government published a new framework law on product regulation, the Product Regulation and Metrology Act 2025, which provides for further detailed regulations to be enacted which may have a similar impact.

Consumer Product Safety Commission ("CPSC") has adopted rules relating to fire retardancy standards for the mattress industry.

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For example, the U.K.

is considering new regulations which would include measures to reduce the use of chemical fire retardants.

is in the process of a major reform of furniture fire safety regulations which would include measures to reduce the use of chemical fire retardants.

We are also subject to environmental and health and safety requirements with regard to the manufacture of our products and the conduct of our operations and facilities.

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We are subject to similar requirements in Canada, the EU and other jurisdictions, with further waste management and prevention, and other environmental protection regulations coming into effect both this year and over the next few years.

Additionally, California, Connecticut, Oregon and Rhode Island have all enacted laws requiring the collection of fees to help facilitate the recycling of mattresses discarded in their states.

We believe that we are in compliance with all applicable international, federal, state and local environmental statutes and regulations.

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states have adopted legislation offering similar protections for resident citizens, such as the California Privacy Rights Act (which amends the California Consumer Privacy Act ("CCPA")).

Eighteen other states have introduced similar privacy laws.

Numerous other states have introduced similar privacy laws.

state privacy laws grant consumers new rights over their personal information, such as access to and deletion of their personal information, placing strict data collection requirements on businesses, including ours.

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Sustainability and Corporate Social Values

We recognize that as a corporate citizen we have a responsibility to protect our communities and environment.

Our executive leadership and board members believe that our success as an organization must be inclusive of our impact on our communities, employees, customers and environment.

We believe that sound environmental, sustainability and corporate governance ("ESG") practices can help identify, manage and mitigate risks while contributing to the financial success of our business.

Additional details on our approach to sustainability can be found in our Corporate Social Values located on the Somnigroup Investor website at http://investor.somnigroup.com under the "Sustainability" tab.

Our Board of Directors and executive management team believe that our commitment to robust sustainability practices unlocks shareholder value and contributes to our long-term financial growth by helping us to identify and manage associated risks and opportunities most relevant to our business.

Additional details on our approach to sustainability can be found in our annual Corporate Social Values reports located on the Somnigroup website at http://somnigroup.com under the "Sustainability" tab.

Our website and its contents are not incorporated by reference into this Report.

In 2024, we shifted our annual sustainability reporting period to be aligned with our fiscal year.

We anticipate publishing the report covering the 2024 fiscal year period in late 2025.

The impact of any acquisitions will generally be integrated into our Sustainability and Corporate Responsibility disclosures and initiatives approximately 24 months after closing.

Our latest Sustainability report, published in 2025, covers our 2024 operations.

Sustainability Governance

The Nominating and Corporate Governance ("NCG") Committee, on behalf of the Company's Board of Directors (the "Board"), is responsible for reviewing the Company's practices and positions relating to ESG issues that may affect the Company's business and key stakeholders and for overseeing ESG matters.

The NCG Committee regularly reviews the effectiveness of management's strategies, programs and policy implementation with respect to responsible sourcing, climate change, waste management, energy initiatives, corporate governance practices and procedures and stakeholder management.

The Human Resources/Capital and Talent Committee has primary responsibility for oversight of risk related to compensation, equal opportunity employment initiatives and human rights considerations.

The Audit Committee reviews and discusses with management and internal audit the Company's risk management processes and system of internal control over the Company's disclosures surrounding its ESG efforts.

Our ESG Working Group is a cross-functional group tasked to operationalize ESG by working with subject matter experts across the Company.

This group is advised by a third party that brings external sustainability insights to help inform our strategic objectives and is overseen by the Chief Financial Officer.

Somnigroup's Nominating and Corporate Governance ("NCG") Committee has primary responsibility for oversight of risk associated with leadership structure, corporate governance matters and the Company's sustainability practices and positions.

The NCG Committee reviews our practices and positions relating to sustainability, technology (including artificial intelligence) and social issues that may affect the Company's business and key stakeholders and exercises oversight on such matters.

As part of this oversight, the NCG Committee reviews the effectiveness of management's strategies and programs in progressing towards the Company's goals, including with respect to responsible sourcing and waste management.

The NCG Committee is supported in its oversight of our key sustainability topics by our Human Resources/Capital and Talent Committee and our Audit Committee.

The Human Resources/Capital and Talent Committee oversees risks related to compensation and initiatives related to talent management.

The Audit Committee has primary responsibility for independent, objective oversight with respect to our accounting and financial reporting functions;

internal and external audit functions and systems of internal controls over financial reporting and oversight regarding the Company's legal, ethical and regulatory compliance, including safety and health, data privacy and cybersecurity risks;

and compliance with the Foreign Corrupt Practices Act of the United States, the Bribery Act of 2010 of the United Kingdom and similar laws and regulations.

At a management level, our Sustainability Working Group is a cross-functional team overseen by our Chief Financial Officer that plays a critical role in shaping and executing our sustainability strategy.

Through partnering with internal subject matter experts and external advisors, the group helps to identify emerging sustainability-related risks and opportunities, informs strategic objectives and accelerates initiatives that advance our sustainability commitments.

The Sustainability Working Group provides regular updates to the Board on sustainability initiatives, emerging opportunities and potential risks to help mitigate business impacts.

Note on Sustainability Discussion and Mattress Firm

The impact of any acquisitions will generally be integrated into our Sustainability and Corporate Responsibility disclosures and initiatives approximately 24 months after closing.

We plan to formally incorporate Mattress Firm into our next sustainability report to be published in 2026 covering our activities in fiscal year 2025.

While we anticipate that we will apply the same or similar strategies to managing these focus areas with Mattress Firm as a part of our company, the following descriptions regarding the Company's approach to Environment and Human Capital Management pertain to the Company immediately prior to the Mattress Firm Acquisition.

Because of the acquisition, we also plan to revisit, and update if needed, our key sustainability-related targets, including our goal to achieve carbon neutrality by 2040 discussed below.

Somnigroup's approach to managing our environmental impact is focused on three pillars:

resource conservation, product and packaging and waste management.

This approach helps to ensure compliance with relevant regulation, better position our products to meet evolving consumer expectations and drive cost savings through efficiency gains.

Our approach is grounded in our environmental management system ("EMS"), and we continue to pursue third-party validation of our EMS to ensure the effectiveness of our approach and create consistency across our manufacturing and logistics management systems.

This approach helps to ensure compliance with relevant regulations, better positions our products to meet evolving consumer expectations and drives cost savings through efficiency gains.

Resource Conservation.

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We are committed to reducing waste from our operations and improving the recyclability of our products.

We seek to achieve zero waste-to-landfill status across our global operations which not only can help reduce costs related to waste management but also reinforces our efforts to improve resource efficiency throughout our production and distribution processes.

We seek to achieve zero waste-to-landfill status across our global operations which not only helps reduce costs related to waste management but also reinforces our efforts to improve resource efficiency throughout our production and distribution processes.

Human Capital Management

As a global organization, our workforce is important to us.

As of December 31, 2025, we had over 19,000 full-time employees.

Our joint ventures also employ over 1,500 full-time employees.

We believe a key driver of long-term success is the strength of our workforce and we are committed to investing in our workforce.

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Equal Opportunity Employment

We have a diverse global workforce that includes a range of skill sets, perspectives, backgrounds, ethnicity, genders and qualifications.

We are committed to fostering a culture that is inclusive and representative of the communities where we operate.

We have a diverse global workforce that includes a range of skill sets, perspectives, backgrounds and qualifications.

As an Equal Employment Opportunity Employer, we are committed to providing opportunities to all employees and applicants and prohibiting discrimination and harassment.

The following are some of the actions that we take to realize our commitment to equal opportunity employment:

• Promote the consideration of a diverse slate of qualified candidates during the hiring process

• Employ a uniform, global process for determining compensation based on experience and skill sets to remove potential biases

• Conduct outreach with organizations in each of our local communities to increase the flow of minority, female, veteran and disabled applicants for employment

• Analyze gender and minority pay equity regularly and adjust as warranted

• Participate in external, community-based activities sponsored by local organizations, including those that assist women, minorities and veterans

• Promotion of a qualified slate of candidates during the hiring process based on merit and regardless of background, with the goal of having a workforce that brings broad experiences and ideas to strengthen our Company

• Employ a uniform, global process for determining compensation based on experience and skillsets to remove potential biases

• Conduct a review of compensation practice periodically

• Participate in external, community-based activities sponsored by local organizations to support the resilience of the communities where we operate and where our employees live

People Development and Training

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We offer employees access to a learning management system where they can take courses on a variety of individual and leadership development topics.

All our professional employees have access to this system, and there are thousands of individual modules offered through our partnership with Skillsoft.

All our professional employees have access to this system which offers thousands of individual learning modules.

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What changed 10-K

Item 1. Business