Peter Keith's questions to Somnigroup International Inc (SGI) leadership • Q2 2025
Question
Peter Keith questioned whether the strength of the Sealy brand could create gross margin pressure from sales mix shift and if the high-end Sealy products were cannibalizing the low-end Tempur line.
Answer
CEO Scott Thompson acknowledged it's possible Sealy could grow faster than Tempur for a few quarters, creating a slight headwind to gross margin percentage, though it would still be incremental EBITDA. He stated that the Tempur brand was actually the strongest in Q2 and does not see cannibalization from Sealy. However, he did note some planned cannibalization is occurring between the high-end Sealy and Stearns & Foster lines, which will be addressed with a future Stearns & Foster launch.