Good morning, ladies and gentlemen, and welcome to Somnigroup 4th Quarter 2025 Earnings Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If anyone has any difficulties hearing the conference, please press star zero for operator assistance at any time. I would now like to turn the conference call over to Oprymore. investor relations. Please go ahead.

Thank you, operator. Good morning, and thank you for participating in today's call. Joining me today are Scott Thompson, Chairman, President, and CEO, and Bosco Rao, Executive Vice President and Chief Financial Officer. This call includes forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve uncertainties and actual results may differ materially due to a variety of factors that could adversely affect the company's business. These factors are discussed in the company's SEC filings, including its annual reports on Form 10-K and quarterly reports on Form 10-Q. Any forward-looking statement speaks only as upon the date from which it is made. The company undertakes no obligation to update any forward-looking statements. This morning's commentary will include non-GAAP financial information. Reconciliations of this non-GAAP financial information can be found in the accompanying press release, which has been posted on the company's website at www.somnigroup.com and filed with the SEC. Our comments were supplemented with detailed information provided in the press release. Finally, before I turn the call over to Scott, I want to take a moment to share that this is my final earnings call in this role. I am transitioning to Somnigroup Vice President, Consumer and Market Intelligence. I'm pleased to say that Lauren, who many of you know well, will be leading investor relations going forward. It has been a privilege to work closely with our investor community, and I'm confident Lauren will continue to serve as a strong partner going forward. And with that, it is my pleasure to turn the call over to Scott.

Aubrey, thank you for your outstanding contributions to investor relations. Maybe even a bigger thank you for you jumping into your new role at SGI that is important to our future success. Moving on to today's earnings call, good morning. Thank you for joining us on our fourth quarter in full year 2025 earnings call. I'll begin with highlights for the quarter in full year and then turn the call over to Bosker to review our financial performance in more detail and discuss our 2026 guidance and our updated three-year EPS targets. After that, I'll open the call up for Q&A. In the fourth quarter of 2025, we achieved record net sales in adjusted EBITDA, while our adjusted EPS increased a robust 20%. Year-over-year, net sales were up approximately 55% to 1.9, adjusted EBITDA was up approximately 59% to 349 million, and adjusted EPS was 72 cents per share. This financial performance was particularly notable given it was achieved while the industry is at a record low and underperformed our expectations. 2025 proved to be another challenging year for the betting industry. We estimate the U.S. industry trend declined mid-single digits in the fourth quarter and full year. The non-U.S. markets we operate in were similarly challenged. After multiple year headwinds, we are confident the betting industry will normalize to at least historical growth trends in the near future. Our conviction and our industry outlook is supported by our demand-driven innovation, compelling advertising, the industry's pent-up product demand, growing health and wellness trends, consumer confidence, and future growth in housing formation. We'll continue to strive to win market share gains, drive cost efficiencies, and prudently allocate capital, all to deliver shareholder returns. Before turning the call over to Boss Group, we highlight several notable achievements in 2025, which marked a transformational year for Somnigroup. Our first highlight is the successful execution of the master's firm combination and transition to Somnigroup International. We've made significant progress with the combination in our first year, and we're still in the early stages of realizing all of the benefits. We brought all of our business units together through a holding company structure with unified management and a shared business strategy and focus. This structure allows us to operate effectively while maintaining a large degree of independence at the business unit level. Building upon the successful combination of mattress firm, we were able to accelerate the pace of sales and cost synergies exceeding our initial expectations. We now expect to deliver $225 million in total EBITDA synergies, $125 million in cost synergies, and $100 million from sales synergies. Fosco will provide more color on the increase in our cost synergy outlook in just a moment. We cemented our position as the largest betting company in the world, allowing us to drive economies of scale, streamline operations, reduce product costs, invest in advertising, and fully support industry partners. Lastly, this transaction drove earnings, de-risk distribution volatility, as we are now 65% direct to consumer, and positioned us for sustainable growth. Our second highlight is the strength of our operating model, which allows us to aggressively execute against long-term growth initiatives while remaining responsive to current market conditions. In 2025, we drove share gains across all business segments, extending our lead as the world's largest betting company. Our competitive advantage underpin these strong results and include our diverse portfolio of trusted brands and innovative products, our unmatched global scale and vertically integrated business model, a broad omni-channel reach that our products sold through tens of thousands of third-party retail stores worldwide and direct-to-consumer. And finally, our strong cash generation and discipline capital allocations, which supports reinvestment in the business, returning cash to shareholders, deleveraging, and providing dry power to capitalize on compelling opportunities, such as our recent investments in full power and Kingsdown. The third highlight is the outperformance of our U.S. and Perseille business, supported by innovative new products, targeted advertising initiatives, and expanded distribution. In 2025, we launched our all-new Sealy Posterpedic line, the largest launch in our history, with over 65,000 floor samples shipped. The launch is performing well, and the new collection is driving meaningful sales growth. This year also marked the first national advertising investment to support the Sealy brand and product. amplifying Celie's share voice, and driving valuable customer traffic industry-wide. As we look ahead to 2026, we're excited to continue investing in national advertising designed to drive traffic to retailers and reinforce our commitment to innovation with the launch of our new Stearns & Foster products in the back half of the year. Fourth highlight is that Mattress Firm's full-year performance outpaced the broader U.S. market, driven by our refined merchandising strategy, strengthens supplier relations, and exceptional in-store execution. Since closing the acquisition, we've elevated Mattress Firm's merchandising. Our focus has been on curating a portfolio of complementary products products that deliver exceptional quality and value across all price points. We deepened partnerships with some suppliers who not only met our quality standards, but also actively supported Mattress Room's success through differentiated offerings and traffic driving advertising initiatives. We also activated multiple initiatives to deliver retail excellence, including optimizing marketing strategies, enhancing the in-store experience, and leveraging our best-in-class retail talent, supporting them with quality sales tools and training to provide customers with targeted sleep solutions. Additionally, we're making steady progress on our plan to invest $150 million between 2025 and 2027 to refresh certain mattress room stores, bringing them up to our brand standards. Further, we've ramped installation of tempered brand walls, which lead to improved customer engagement and education. These brand walls placed at both mattress firm and other retailers have proven to be a worthwhile investment by driving higher retail ASP. We made substantial progress in expanding this initiative in the back half of 2025, and we We remain firmly on track to complete the rollout across all MattressFirm stores nationwide at the end of the year. As previously mentioned, we undertook a new advertising strategy for MattressFirm to harmonize the message with Somnigroup initiatives, culminating in the launch of our new MattressFirm advertising campaign, Sleep Easy, in the back half of 2025. We introduced new campaign iterations into the marketplace over the last quarter and continue to achieve all-time high market research scores. Key performance indicators consistently indicate the campaign is having a measurably positive impact on customers' impression of mattress firm and brands being presented, enhancing awareness and triggering consumers' interest in betting, benefiting all betting retailers. Campaign's strong performance has already prompted two non-SGI vendor partners to commit additional advertising dollars directly to Mattress Firm to capitalize on the opportunity both our scale and our new messaging platform now clearly represents for betting brands. We are pleased with these preliminary results and expect to see additional momentum as the campaign becomes more established in the market. Our fifth highlight is related to our international business. We saw impressive sales growth, demonstrating the long-term global growth opportunity ahead. Our temporary international business delivered low double-digit sales growth in the quarter or on a constant currency basis, high-single-digit sales growth in the fourth quarter and full year, outpacing the broader industry while navigating a challenging market. This marks our third consecutive year of solid growth across all key international regions, driven by the refreshed Tempura product lineup, standard distribution reach, and enhanced marketing investments. Dreams, our UK-based retail brand, also posted another solid year of market outperformance, driven by conversion and increased order volume. Full-year performance was supported by robust same-store sales and strategic new store openings. The team continued to deliver operational efficiencies, execute on growth initiatives, and uphold exceptional product quality and customer satisfaction. driving share gains against the challenging UK betting market. Overall, we're pleased with the momentum we've accumulated during 2025 and look forward to carrying that momentum into 2026. And with that, I'll turn the call over to Bostor.

Thank you, Scott. In the fourth quarter of 2025, consolidated sales were $1.9 billion. and adjusted earnings per share was $0.72, up 20% over the prior year. There were approximately $10 million of pro forma adjustments in the quarter, all of which are consistent with the terms of our senior credit facility. As a reminder, we have aligned accounting for store occupancy costs across Somnigroup, which resulted in Tempur-Sealy reclassifying their store occupancy costs from operating expense to cost of goods sold. We've adjusted prior year Tempur-Sealy financial information included in today's earnings release to reflect the change for ease of comparability. As a reminder, year-over-year comparisons are impacted by the acquisition of Mattress Firm in the first quarter of 2025 and the related divestitures of sleep outfitters and certain Mattress Firm retail locations in the second quarter of 2025. I will be highlighting like-for-like comparisons defined as reported numbers adjusted for the acquisition and divestiture impacts to normalize for these items in our commentary. Now turning to Mattress Firm results. Net sales through Mattress Firm were approximately $890 million in the fourth quarter and declined 3% on a like-for-like basis. Same-store sales were flattish, outperforming a market we believe declined mid-single digits in a quarter. Mattress firm's adjusted gross margin was 32.4%, and adjusted operating margin was 5.4%, turning to tempers-zeely North American results. Like-for-like net sales through the wholesale channel increased approximately 6% in the fourth quarter, normalizing for the previously disclosed foreclosed distribution. Our sales with third-party retailers were flattish on a like-for-like basis, outperforming the broader industry by a solid margin. Like-for-like net sales through the direct channel declined 7% in the fourth quarter as our direct temper stores underperformed our expectations and our e-commerce sales faced difficult comps. North American adjusted gross margins increased 2,000 basis points to 59.5%, primarily driven by the elimination of the intercompany sales to mattress firm from Tempur-Sealy. On a like-for-like basis, North American gross margins increased 250 basis points versus the prior year, primarily driven by operational efficiencies and mix as the premium consumer demonstrated continued resilience. North American adjusted operating margins improved 1,300 basis points to 27.6%, primarily driven by mattress firm intercompany sales elimination. On a like-for-like basis, North American adjusted operating margins increased 450 basis points versus the prior year, primarily driven by the improvement in gross margin and fixed cost leverage. Now turning to international results. International net sales grew a robust 13% on a reported basis and 9% on a constant currency basis. Our international gross margins increased 40 basis points to 51.1%, primarily driven by operational efficiencies, offset by modest headwinds from a competitive UK marketplace. Our international operating margin increased 110 basis points to 22.4 percent, driven by the expansion in gross margins and fixed cost leverage. Now turning to our sales and cost synergy targets. In 2025, we achieved a $60 million benefit in adjusted EBITDA from sales synergies ahead of our initial expectations. We exited the year at a low 60% of Mattress Firm's total sales, averaging mid-50s for the full year. At the same time, Purple and Kingsdown both grew share at Mattress Firm. We will see the wraparound effect of Pemper Sealy share gains in 2026, resulting in an incremental $40 million of EBITDA benefit and positioning us to confidently deliver on our $100 million run rate sales synergy target. Since we have held mattress firm sales flat in estimating this balance of share opportunity, we expect the synergy benefit to grow as we start to see the U.S. betting industry normalize. On cost synergies, I'm excited to share that we are increasing our estimate to $125 million with $20 million realized in 2025, $55 million expected in 2026, and incremental $50 million in 2027. Our increased cost energy outlook is principally being driven by increased expected savings from logistics and supply chain activities. Now moving on to Somnigr's balance sheet and cash flow items. At the end of the fourth quarter, consolidated debt less cash was $4.6 billion dollars, and our leverage ratio under our credit facility was 3.2 times, down nearly a third of a turn versus the mattress firm acquisition day, demonstrating our strong cash flow generation and disciplined capital allocation. We expect to return to our target leverage range of two to three times in the next six We also expect lower market interest rates will drive improved cost of our variable rate debt, which will add to future EPS growth. Finally, as we announced this morning, we are increasing our quarterly dividend 13% to $0.17 in 2026. This marks the sixth consecutive year of dividend increases reflecting our confidence in sustained cash generation. Now turning to guidance. As a reminder, our guidance considers the elimination of intercompany sales between Mattress Firm and Tempur-Sealy, which we expect to represent approximately 23% of global Temproseli 2026 sales. Intercompany eliminations in accordance with GAAP will reduce Temproseli sales but be margin accretive and neutral to the dollars of operating profit. Please also note that we acquired Mattress Firm in February 2025. As a result, our first quarter and full year 2026 reported results will reflect the impact of a little over one additional month of Mattress Firm financial results. We expect adjusted earnings per share to be between $3 and $3.40. This guidance range contemplates a sales midpoint of approximately $7.9 billion after intercompany eliminations. Our annual guidance also reflects our expectation that the global betting industry will go slightly versus the prior year, driven by low single-digit growth in the first half of the year. Temporary Sealing North America sales grow in mid-single digits on a like-for-like basis and reported sales to be impacted by the intercompany elimination I referenced a moment ago. International business growing mid to high single digits as our legacy international continues to drive new distribution through its product strategy and dreams continue to drive share in a competitive UK market. And our like-for-like mattress firm sales to grow low to mid-single digits. We also expect reported gross margins slightly above 45%, driven by approximately 100 basis points of net margin expansion from operational efficiencies, including synergies, and fixed cost leverage. Our 2026 outlook also contemplates our assumption for Tempur-Sealy brands and private labels to be in a low 60% of matches firm total sales. This represents about an incremental $40 million of EBITDA benefit for 2026 compared to 2025, and approximately $720 million of advertising investments, all of which we expect to result in adjusted EBITDA of approximately $1.45 billion at the midpoint. Regarding capital expenditures, we expect 2026 CapEx of approximately $250 million, which includes $75 million of investments in mattress firm store refreshes and brand wall installations. We expect our CapEx to normalize to $200 million in future years, and for at least 50% of our free cash flow in 2026 to go to quarterly dividends and share repurchases. Now, I would like to flag a few modeling items. For the full year 2026, we expect D&A of approximately $315 million, interest expense of approximately $225 million, on a tax rate of 25%, with a diluted share count of 214 million shares. Lastly, we are raising our 2028 target EPS to $5.15, representing a 24% compound annual growth rate from 2025. We are also targeting mid-single-digit annual sales growth and double-digit annual adjusted EBITDA growth over that period. With that, I'll turn the call back over to Scott.

Thank you, Oscar. Now, I want to quickly address our proposed position of Leggett-Platte for opening the column for Q&A. We welcome Leggett and Platt's board's willingness to engage in discussions and conduct customary due diligence, which is currently underway. Omni group remains committed to pursuing a transaction that will deliver substantial value to shareholders of both companies. There can be no assurances regarding the completion of a transaction or the terms of any transactions, and we will not be commenting further on this topic. Lastly, I'd like to headline that we will be hosting an Investor Day in New York on March 4th. During that day, we expect to share more information on our three-year EPS target, our strategic vision for Somni Group, discuss growth initiatives for Tempur-Sealy, Patrick's firm and dreams and provide additional details on our capital allocation strategy with that operator that ends their call please open the call up for questions thank you ladies and gentlemen we will now begin the question and answer session should you have a question please press the star followed by the one in a touchdown phone should you wish to cancel your request please

press the star followed by the two if you are using a speakerphone please lift the handset before pressing any keys once again that is star one should you wish to ask a question your first question is from susan mcclary from goldman sachs canado your line is now open thank you good morning everyone good morning good morning scott my question is around the outlook for demand.

Can you talk a bit about the state of the consumer, how you're thinking about the shape of demand as we come into 2026, and how you're thinking of the drivers and the potential for out or underperformance relative to the guide for temporary North America sales to be up below single digits on the like-for-like basis?

Sure, Susan, thank you for the question. I mean, first thing, in demand, our estimates are for $3, $3.40 for 2026. You know, one of the foundations of it is basically a flat market. We didn't call a turn in there, and if we had, obviously, the flow through on that guidance would be significant. But we thought, you know, considering the fourth quarter came in a little light from the industry standpoint from our expectations that probably flat was the right way to go into the year and then we'll see how how demand develops if you're talking about how what we're thinking about geez you know fourth quarter again came in a little bit less from an industry standpoint than we expected and if you look at you know the start of the first quarter it's kind of a tale of two cities if you look at the pre-president stay holiday period you call it January 1st, I don't know, February 10th or so, we had tough weather and I hate talking about weather obviously, but if you talk about short periods, you always have to think about it. And it was tough weather in the U.S. and the way I always look at that is I look at lost days and if you look at Mattress Firm, we had 5,000 days of store losses that were incremental to last year. So to be clear, that's not like rain or something. That means the weather was so bad, the store didn't open. So we lost 5,000 days of sales during that period off of the possibility of 90,000 days. So it's about a 6% headwind incrementally in store closings. So as you would expect during that period, mattress firms, same-store sales were slightly down. But then as soon as you get into the present holiday period, which we'll call that, you know, February 11th forward, sales have been very robust. And when I say very robust, I mean double digits, robust, driven by strong AOV, driven by temper, clearly a customer that's in the market wanting to buy. And the result is, you know, looking at U.S. mattress firm sales, because that's kind the best index for consumers and it has real-time data, is now we're running positive same-store sales at mattress firm to start the quarter. So when I look at it, it looks like a betting market and a consumer that wants the market to grow. And we've got to get out of our way, whether it be some drama in Washington or whether it be an unusually strong storm, slows you down a little bit.

But it does feel like it's a market that's poised for growth. and if I could add on to that then the way to think about the quarter when you put all that together is from a first quarter sales standpoint we would expect something in and around positive 14% or a little over 1.8 billion dollars with EPS growing in and around 20% operator next question your next question is from Bobby Griffin from Raymond James your line is that open

good morning guys thanks for taking the questions and Aubrey congrats on the new position. It's been great working with you over the last few years. I guess, Boscor and Scott, for my question, I want to maybe unpack the guide a little bit. And Boscor, can you help us and just kind of clean up some things in the model in terms of like what's left on the customer transition, as well as I know we have the wraparound benefit of Mattress Firm and some of the divestitures. And I guess I'm asking in the context of I take the cost synergies, the EBITDA benefit from the floor shift, as well as our guess at what's the one month, the mattress firm is, we can walk our way pretty close to the midpoint just on those. So is there anything I'm missing on an offset or is the way to view that more just conservative in the model? I just want to make sure we're thinking about all the parts the right way.

Let me give it a try and then you can follow up as necessary. So when I think about just fundamentally is it's all based on an industry that's flat to slightly up. On top of that, what we have is share gains in all of our geos. So internationally growing high single, and in North America, call it that mid-single. And that would get you, let's call it in and around $7.9 billion. When you go forward from a gross profit standpoint, we'll talk about the stuff period. So the stuff period, you're correct, is about one month shy relative to prior year. And call that in and around, call it $280 or so million net. When you think about from a profitability standpoint is we're going to continue to support those brands. We call that about $720 million of advertising to continue to support from a launch standpoint. What's embedded in there is very nice gross profit improvement. Let's call it about 100 basis points on a year-over-year perspective. And the principal drivers of that is a couple of things. One is productivity through the plants. And on top of that would be the synergies that we've identified. And as noted in the prepared material, we've taken that number up, about 25 basis points, sorry, $25 million on a year-over-year basis. There is a bit of a headwind associated with, let's call it commodities, that would offset from a gross profit standpoint. But if you add all those pieces up, I think fundamentally the foundation being industry, market share gains, and margin expansion, it gets you to in and around the midpoint.

Operator, next question.

The next question is from Rafe Judge Rosich from Magnus America. Carolina, if I open.

Hi. You have Victoria on for Rafe Gap. Rosich, thanks for taking your question. I was wondering if you could talk a little bit more about the elasticity of demand and how did price increases impact your volume?

Yeah. You know, we took quite a bit of price over the last couple of years, and I can't really see any significant impact from a volume standpoint. This is an industry that has always been very efficient in passing actual commodity cost increases through the channel and it looks like it could continue to do that.

Thank you. The next question is from Dan Silverstein from UBS. Your line is open.

Thank you and good morning. Appreciate you taking our question. Maybe Just to build on Bobby's question, if we kind of expand that out to the 2028 target, is the raise there just the additional synergies or has anything else changed on kind of the outlook on the pace of an industry recovery or Somni Group's growth against that industry? Thank you.

Great question. Some of it is synergies and the success that we've achieved in synergies plus what we see going into the funnel from from a synergy standpoint primarily in the area of logistics and at an advertising the other probably big driver would be when we look at our relative competitive position and it's a little early in the reporting quarter to have you know all the numbers and have the industry fully analyzed but we think we took a major step forward from competitiveness in And everywhere we look, I'd highlight that we're growing in all of our geos. And those are in markets that we believe had a tough fourth quarter. So again, I guess it's confidence in our competitive position and synergies are the main drivers. And if the industry turns in 26, which we did not embed in our guidance. Our guidance range would be light.

To wrap around the perspective of 515, what we're excited about is the ability to take it up in light of an industry in 2025 that did not achieve what we thought it would be when the original 485 was put out there.

So we did have some wins, as Scott said, competitive positioning, revenue synergies, cost synergies, et cetera that allowed us to take the number to 515 and then at the conference in New York here in a few weeks we'll give you more detail in the build-up to that 515 to I think we'll give you more confidence that that raise was appropriate thank you the next question is from Peter Keith from Piper Sander your line is so open all right thanks good morning everyone and congrats to Audrey and to Lauren.

I wanted to just ask about the the lack of product launches in the first half. With the gross margin guide of 100 basis points, could we see a little bit of excess gross margin expansion in the first half with no product launches and then the opposite of that in the second half? And then Scott, also product launches usually are a big sales driver so you're anticipating gaining a market share tempered North America. I guess can you walk us through the rationale on that because product launches usually are a nice sales accelerant.

Yeah a lot in that question I'll start with embossed green you clean me up you know we do a product launch yeah you do get more sales but those sales are obviously much lower profit margin close to closer more than break even so it's kind of a mixed bag if you look what's in the marketplace but we've got great products in the marketplace you see the claustrophedic launch the temper stuff we do have a small launch later in the year Stearns and Foster but from a competitive standpoint we feel very good about our the launches so I think we're well positioned to continue to take share what we've got in the market backward advertising you want to talk to the gross market

absolutely Peter good question so when I think about the full year if I were to step back on the sales and let's call it the EBIT or the fall-through line it is effectively a push, but there is some first half, back half phasing. So think about it as a sales headwind in the first half, call it about 20 million or so, and effectively reversing in the back half. And from a margin standpoint, you are correct. If you look at it in isolation, the gross profit will be impacted more so in the first half of the year versus the back half of the year. However, we are also, again, as we announced the synergy opportunity and the productivity is is that that as the year progresses is those things will progress as well but fundamentally when you look at the full four models in and of itself yes first half back half impact net full year basically nothing thank you your next question is from Brad from us from key bank capital markets your line is so open hi good morning thank you for taking the question the question is about the changes at mattress firm from a consumer and an operational perspective.

Scott it does feel seem like even with same-first sales having slowed a bit in the fourth quarter that that's more a function of the industry and that mattress firm is still really outperforming but I was hoping you could just comment a little bit on you know how you measure that the new lineup is resonating with the consumer and then how we should think about kind of the pace of change that we're putting in place and then maybe just finally any more details you could share on the timing of Purple Kings down, some of the other changes that you're doing here this year. Thank you.

Sure. So, I mean, to summarize the question, Scott, can you tell me everything you know about Mattress Firm? Just kidding. Look, from everything we see, Mattress Firm continues to take share both in the fourth quarter and start of the first quarter. so I'd say that's evidence of resonating with customers as far as performance you're seeing share growth and we'll call the family brands the temporary brands particularly temporary you're seeing growth in Kings down which is doing a great job for us and you're seeing growth in purple and there's some There's a test going on in Kingstown considering expanding it, and then the new purple high end bed will be hitting the floor mattress from, I think, late first quarter. We get a lot of feedback from our RSAs, and I think the merchandising changes have been well received both in store and with consumers. and Nectar's doing well. I forgot to mention Nectar has been doing well on the floor. So, you know, overall, I couldn't be happier with our merchandising changes, both the way they've been executed, the pace they've been executed, and how the market that has received them.

Thank you. Your next question is from Jeff Lick from Stevens. Your line is open.

Good morning. Thanks for taking my question, Aubrey and Lauren. And congrats on the new roles. And, Scott, nice to reconnect with you. It's been a long time. The question is, Scott, I was wondering, now that you've had Mattress Firm pretty much for an entire year, you had mentioned on your remarks about some marketing step up from some of your partners. Just curious how you're seeing, I know this is a little sensitive, but just owning Mattress Firm, the competitive dynamics or the strategic dynamics, any thoughts there on how that kind of meshes with your original expectations? when you bought it.

Yeah. I've got a couple of things. Great question and good to hear from you. I guess starting with the advertising, we completely changed the advertising message and the approach. It's built in a way that there's a mattress for a message and then you can plug in brand and product into the ad and get a one-two punch. Obviously, we're doing that with the family brands, the Temperance, Sealy, Sterns, and Foster, but we're also doing it with other brands, third-party brands, and that's been effective. In fact, it's been so effective that other manufacturers are giving us incremental support, incremental outside of, we'll call it normal, support to take some positions in those ads Because they're seeing when they do, it drives traffic, not only on the mattress firm floor, but it also drives their brand at other third-party retailers. So it's become a very effective way for them to get to market. And so couldn't be happier with the way that program has worked. And I think the third-party manufacturers who participated in it are happy with that As it relates to, I'll call it channel dynamics or those kind of things, we have a term called other-other because it's a short way to say, how are the other retailers doing in the U.S. that are not mattress firms and how are the sales of Tempur-Sealy products, we call it other-other. And if you look at other-other, our other-other sales, we think that they are outperforming the general market so we think we're taking share in the other other area too and so I'm not seeing any significant channel conflict I think everybody understands that the advertising we're doing is helping drive product not just at our retail stores but throughout the industry and it found good support it's probably gone better than I probably initially thought wasn't too worried about it, but you got to work through it. So no, I think the mattress firm acquisition, you know, you can take the price, you take the performance, you take the synergies that have been realized. I think we would say that it's been very good from our standpoint.

Thanks very much for taking the question. Best of luck.

Thank you. Your next question is from Bobby Griffin from Raymond James, airline is so open.

Hey, guys. Thanks for letting me back in the queue. Scott, I just, you know, we spent a lot of time on North America, but honestly, international just continues to be a bright spot there with robust kind of constant currency growth on top of a really good quarter last year. I understand you guys did a lot of work on the product portfolio, but help us understand, like, how much is new door growth versus how much is throughput or slot velocity? And then when we think about the opportunity international, like, do you still see a robust amount of new door potential, or is it more just continuing the velocity? Just help us think about the sustainability of what is turning into a nice bright spot in the story.

Yeah, I mean, great call out. International has been growing for a couple of years, very strong, again, and not a great market, which is particularly impressive. As you know from an international standpoint, we don't have a large balance of share internationally. So it is a long-term growth trajectory that we are very, very bullish on. Bosco, do you know the split between new distribution and velocity? Because we're getting both internationally.

So when you think about the growth over the last couple of years, it's been principally at its existing distribution. And what existing distribution looks like is perhaps a few more slots in stores that we're in, but really improving the velocity per slot on where we're at. And really what that does is that we have to prove ourselves in the international market. As Scott said, we have relatively low share relative to the U.S., also a very difficult execution. The borders, they're not states, they're countries, so it's a tougher slug. So, the key there is making sure you have the right product, advertise ahead of that to educate the retailers and the consumers, therefore you get the incremental slots within the store, prove yourself in those stores, and then get into new distribution. So when I think about the next leg of growth internationally, continue to do what we're doing, but also expand the distribution outside of our historic footprint.

Thank you. There are no further questions at this time.

I will now hand a call back over to Scott Thompson for the closing remarks. thank you operator to our tooth 20,000 associates around the world thank you for what you do every day to make the company successful to our retail partners thank you for your outstanding representation of our brands to our shareholders and lenders thank you for your confidence in the company's leadership and its board of directors this ends the call today operator thank you thank you ladies and gentlemen the conference has now ended thank you all for joining you may now disconnect your lines