What changed in this filing

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Item 1A. Risk Factors

2026-02-27 compared with 2025-02-28 · 40 added, 36 removed, 223 unchanged (25% of the section changed)

29 unchanged sentences

In addition, monetary policies to counter inflation could negatively affect our borrowing costs and those of our customers and suppliers, as well as exchange rates and other macroeconomic factors.

Geopolitical developments, such as trade wars, the Russia-Ukraine conflict, the Israel-Hamas conflict and wider Middle East developments (including disruptions to the Red Sea passage or such conflicts spreading further in the relevant regions), have adversely impacted and could continue to adversely impact, among other things, our raw material, energy and transportation costs, certain of our suppliers, distributors, customers and local markets, global and local macroeconomic conditions, and cause further supply chain disruptions (including by delaying the delivery times of raw materials needed for our business or our products to customers).

The acquisition of Mattress Firm may not be as successful as anticipated, and we may not achieve the intended benefits or

do so within the intended timeframe.

The success of our acquisition of Mattress Firm will depend, in large part, on our ability to realize the anticipated benefits from combining our business with Mattress Firm.

Our ability to realize these anticipated benefits depends on the successful merger of our business with Mattress Firm, which will be complex and time-consuming.

This merger will involve numerous operational, strategic, financial, accounting, legal, tax and other risks, including potential liabilities associated with Mattress Firm's business.

Geopolitical developments, such as trade wars, the war in Ukraine conflicts in the Middle East (including disruptions to the Red Sea passage), have adversely impacted and could continue to adversely impact, among other things, our raw material, energy and transportation costs, certain of our suppliers, distributors, customers and local markets, global and local macroeconomic conditions and cause further supply chain disruptions (including by delaying the delivery times of raw materials needed for our business or our products to customers).

The Company may not realize the benefits it expects from the Mattress Firm Acquisition or acquisitions or other strategic transactions it may pursue in the future.

From time to time, the Company considers and may make acquisitions, such as our acquisition of Mattress Firm.

The success of such acquisitions will depend upon a number of factors, some of which may not be within our control.

For example, the success of our acquisition of Mattress Firm depends, in large part, on our ability to realize the anticipated benefits from combining our businesses.

Our ability to realize these anticipated benefits depends on the successful integration of Mattress Firm with our businesses, which has been complex and time-consuming.

This integration has involved numerous operational, strategic, financial, accounting, legal, tax and other risks, including liabilities assumed with the Mattress Firm Acquisition.

Difficulties in combining the business of Mattress Firm and our ability to manage the combined company may result in the combined company performing differently than expected, in operational challenges or in the delay or failure to realize anticipated expense-related operating synergies and could have an adverse effect on our business and financial results.

Potential difficulties that may be encountered in the merger process include, among other factors:

• the inability to successfully merge the business of Mattress Firm, operationally and culturally, in a manner that permits us to achieve the financial results anticipated;

• the inability to deliver on our strategy as a combined company, including the expansion of consumer touchpoints and acceleration of our U.S.

omni-channel strategy;

Potential difficulties that may be encountered in the acquisition and merger process include, among other factors:

• the inability to obtain financing for potential acquisitions;

• delays in closing or the inability to close an acquisition for any reason, including third-party consents or approvals;

• the inability to successfully merge the acquired business, operationally and culturally, in a manner that permits us to achieve the financial results anticipated;

• the inability to deliver on our strategy as a combined company;

• complexities associated with managing a larger, more complex business, including the potential diversion of management's attention;

• not realizing anticipated operating synergies;

• the inability to retain key employees and otherwise combine personnel from the two companies;

• the inability to retain key employees and otherwise combine personnel from the acquired companies;

• potential unknown liabilities and unforeseen expenses;

• merging relationships with customers, suppliers, distributors and business partners;

• performance shortfalls at one or both of the companies as a result of the diversion of management's attention caused by merging Mattress Firm's operations;

• performance shortfalls at one or any of the companies as a result of the diversion of management's attention caused by merging the acquired business' operations;

• the disruption of, or the loss of momentum in, each company's ongoing business or inconsistencies in standards, controls, procedures and policies.

We could also issue a significant number of shares of our common stock in the future in connection with acquisitions.

Any of these issuances could dilute our existing stockholders, and such dilution could be significant.

Moreover, such dilution could have a material adverse effect on the market price for the shares of our common stock.

In addition, in connection with the acquisition of Mattress Firm, we have committed to maintain a merchandising plan that provides 43% of horizontal premium ($1,500+) floor slots for the placement of third-party premium mattresses.

Failure to comply with this commitment could result in legal or administrative proceedings, such as regulatory action or private litigation, and could harm our business, reputation and financial condition.

Risks related to operating our business

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• our ability to successfully mitigate the impact of headwinds facing our business, including increased commodity prices and the influx of low-end, imported beds that compete with certain of our products;

• our ability to pursue, successfully integrate and capture the synergies from potential acquisition opportunities, such as the Mattress Firm acquisition;

• our ability to pursue, successfully integrate and capture the synergies from potential acquisition opportunities;

• general economic factors that impact consumer confidence, disposable income or the availability of consumer financing;

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Each year we invest significant time and resources in research and development to improve our product offerings and launch new products.

In 2024, we completed the launch of a new portfolio of Tempur-Pedic® Adapt mattresses in our North America segment.

This collection was designed to complement the Tempur-Pedic® Breeze collection and Tempur-Ergo® Smart Bases launched in 2023 and finishes the complete reset of our core Tempur® lineup.

In our International segment in 2024, we completed the rollout of the new line of Tempur® products in over 90 markets through our wholly-owned subsidiaries and third-party distributors.

This new line of products will broaden Tempur®'s price range with the super-premium price point ceiling maintained and the floor expanded into the premium category to broaden our global addressable market.

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

For example, in 2026, we plan to launch an all-new collection of Stearns & Foster products in North America, and in 2025, we launched an all-new collection of Sealy Posturepedic® products in North America.

This all-new collection of Stearns & Foster products 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.

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

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Our third-party service providers may be victims to cybersecurity events from time to time, and failure to prevent, detect or remediate such events may disrupt our operations and could cause financial or reputational harm, including if insurance coverage is insufficient to cover all losses or all types of claims that may arise.

As previously disclosed, we identified a cybersecurity event on July 23, 2023 affecting certain of our data and IT systems, which resulted in the temporary interruption of our operations when we proactively shut down certain of our systems.

This cybersecurity event, as well as any other breach of our network or databases, or those of our third-party providers, have resulted and may in the future result in the risks discussed herein.

Cybersecurity events and breaches of our network or databases, or those of our third-party providers, have resulted and may in the future result in the risks discussed herein.

Furthermore, we are subject to a constantly evolving regulatory landscape of laws and regulations relating to IT security and personal data protection and privacy, including but not limited to the EU's GDPR and the CCPA, each of which have imposed new and expanded compliance requirements on companies, including us, that process personal data from citizens living in applicable jurisdictions.

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Deterioration in labor relations could disrupt our business operations and increase our costs, which could decrease our liquidity and profitability.

As of December 31, 2024, we had approximately 12,000 full-time employees.

Our joint ventures also employ approximately 1,550 full-time employees.

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

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

Approximately 14.7% of our employees are represented by various labor unions with separate collective bargaining agreements or government labor union contracts for certain international locations.

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We maintain insurance against premises liability claims, but such coverage may not continue to be available on terms acceptable to us or be adequate for liabilities actually incurred.

A successful claim brought against us in excess of available insurance coverage could impair our liquidity and profitability, and any claim or product recall that results in significant adverse publicity against us could adversely affect our reputation or result in consumers purchasing fewer of our products, which would also impair our liquidity and profitability.

If we are not able to protect our trade secrets or maintain our trademarks, patents and other intellectual property, we may not be able to prevent competitors from developing similar products or from marketing in a manner that capitalizes on our intellectual property rights, and this loss of a competitive advantage could decrease our profitability and liquidity.

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Certain other trademarks are the subject of protection under common law.

However, those rights could be circumvented, or violate the proprietary rights of others, or we could be prevented from using them if challenged.

However, there can be no assurance that the steps we take to protect our trademarks in the U.S.

and foreign jurisdictions will be adequate to prevent third parties from copying or using our trademarks, including our retail and product brands, without authorization.

Our rights to our trademarks could be circumvented, or violate the proprietary rights of others, or we could be prevented from using them if challenged.

A challenge to our use of our trademarks could result in a negative ruling regarding our use of our trademarks, their validity or their enforceability, or could prove expensive and time consuming in terms of legal costs and time spent defending against such a challenge.

Any loss of trademark protection could result in a decrease in sales or cause us to spend additional amounts on marketing, either of which could decrease our liquidity and profitability.

In addition, if we incur significant costs defending our trademarks, that could also decrease our liquidity and profitability.

In addition, we may not have the financial resources necessary to enforce or defend our trademarks.

We have made and continue to make significant investments to promote our retail and product brands.

For example, in 2025, we launched a new "Sleep Easy" advertising campaign to promote our Mattress Firm retail brand.

If our brands are copied or used without authorization, we may be unable to realize the benefits of such investments, and the value of our brands, their reputation, our competitive advantages and our goodwill could be harmed.

In addition, if we incur significant costs defending our brands and other trademarks, our liquidity and profitability could be adversely affected, and we may not have the financial resources necessary to enforce or defend our brands and other trademarks.

Furthermore, our patents may not provide meaningful protection and patents may never issue from pending applications.

It is also possible that others could bring claims of infringement against us, as our principal product formula and

manufacturing processes are not patented, and that any licenses protecting our intellectual property could be terminated.

It is also possible that others could bring claims of infringement against us, as our principal product formula and manufacturing processes are not patented, and that any licenses protecting our intellectual property could be terminated.

If we are unable to maintain the proprietary nature of our intellectual property and our significant current or proposed products, this loss of a competitive advantage could result in decreased sales or increased operating costs, either of which would decrease our liquidity and profitability.

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The loss of the services of any members of our executive management team could impair our ability to execute our business strategy and as a result, reduce our sales and profitability.

We depend on the continued services of our executive management team, whose average tenure with the Company is 17 years.

We depend on the continued services of our executive management team.

Our executive team's leadership experience provides us with a competitive advantage, as the team sets clear initiatives for the organization and enhances high-performing teams by empowering them to act quickly, especially during challenging periods.

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dollar strengthens relative to the Euro or other foreign currencies where we have operations, for example, there will be a negative impact on our operating results upon translation of those foreign operating results into the U.S.

In 2024, foreign currency exchange rate changes positively impacted our net income by approximately 0.1% and positively impacted adjusted EBITDA, which is a non-GAAP financial measure, by approximately 0.1%.

In 2025, foreign currency exchange rate changes negatively impacted our net income by approximately 1.1% and negatively impacted adjusted EBITDA, which is a non-GAAP financial measure, by approximately 0.4%.

Changes in foreign currency exchange rates could have an adverse impact on our financial condition, results of operations and cash flows.

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• restricting us from making strategic acquisitions or investments or causing us to make non-strategic divestitures;

• limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions, such as the Mattress Firm acquisition, and general corporate or other purposes;

• limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions and general corporate or other purposes;

• limiting our flexibility in planning for, or reacting to, changes in our business or the industry in which we operate;

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complying with foreign laws and regulations, including disparate anti-corruption laws and regulations;

and the potential imposition of trade or foreign exchange restrictions, tariffs and other tax increases, inflation, unstable political situations, labor issues and geopolitical conflicts (including the Russia-Ukraine conflict, the Israel-Hamas conflict and wider Middle East developments).

We are also limited in our ability to independently expand in certain international markets where we have granted licenses to manufacture and sell Sealy® bedding products.

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by various federal, state and local regulatory authorities, including the Federal Trade Commission ("FTC"), the Consumer Product Safety Commission ("CPSC") and the U.S.

Food and Drug Administration, and by similar international regulatory regimes.

Food and Drug Administration, and by similar international regulatory regimes, including the EU's General Product Safety Regulation.

We are subject to various health and environmental provisions, such as California Proposition 65 (the Safe Drinking Water and Toxic Enforcement Act of 1986) and in our international jurisdictions we are subject to the medical devices regulatory authorities such as the Medicines and Healthcare products Regulatory Agency ("MHRA") and the International Chamber of Commerce Advertising and Marketing Communications Code.

We are subject to laws and regulations both in the U.S.

and internationally, relating to pollution, environmental protection and occupational health and safety, such as the Federal Water Pollution Control Act, and Registration, Evaluation, Authorization and Restriction of Chemicals ("REACH"), amongst others.

and internationally, relating to pollution, recycling, environmental protection and occupational health and safety, such as the Federal Water Pollution Control Act, and Registration, Evaluation, Authorization and Restriction of Chemicals ("REACH"), amongst others.

As a manufacturer of bedding and related products, we are subject to regulations governing the environment.

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While we continue to focus on strategies and systems to address the long-term risks posed by climate change, such as reducing our greenhouse gas emissions and packaging waste, there can be no assurance that such strategies and systems will adequately protect against such risks.

Any disruption in our operations or additional expenses caused by the long-term effects of climate change could have a material adverse effect on our operations.

disruption in our operations or additional expenses caused by the long-term effects of climate change could have a material adverse effect on our operations.

Risks Related to Ownership of Our Common Stock

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For the year ended and as of December 31, 2025, we did not repurchase shares under our share repurchase program and had approximately $774.5 million remaining under the share repurchase authorization.

While the Mattress Firm acquisition was pending, we temporarily suspended our share repurchase program, and currently expect to allocate unused cash flows toward repayment of debt.

Shares may be repurchased from time to time, in the open market or through private transactions, subject to market conditions, in compliance with applicable state and federal securities laws.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors