Core Insights - Scotts Miracle-Gro Company (SMG) reported a fourth-quarter fiscal 2025 loss of $151.8 million or $2.63 per share, an improvement from a loss of $244 million or $4.29 per share in the same quarter last year [1] - Adjusted loss was $1.96 per share, narrower than $2.31 a year ago, but wider than the Zacks Consensus Estimate of a loss of $1.88 [1] Financial Performance - Net sales decreased approximately 6.6% year over year to $387.4 million, missing the consensus mark of $398.6 million [2] - In the U.S. Consumer division, net sales increased by 0.5% year over year to $311.2 million, but fell short of the estimate of $360 million, with a segment loss of $65.5 million, up 21% year over year [3] - The Hawthorne segment saw net sales plummet 38% year over year to $49.9 million, although this figure exceeded the estimate of $27 million [3] - The other segment's net sales rose 7% year over year to $26.3 million, surpassing the estimate of $5.3 million, with a loss of $9.8 million, down 20% year over year [4] Balance Sheet - At the end of the quarter, the company had cash and cash equivalents of $36.6 million, down from $71.6 million a year ago, while long-term debt was $2,049.2 million, a decrease of approximately 5.7% year over year [5] Outlook - For fiscal 2026, the company projects low single-digit growth in U.S. Consumer net sales, with an adjusted gross margin expected to be at least 32% [6] - Adjusted EBITDA is anticipated to grow in the mid-single digits, with adjusted earnings per share projected between $4.15 and $4.35, and free cash flow estimated at approximately $275 million [6] Stock Performance - Shares of Scotts Miracle-Gro have declined by 19% over the past year, compared to a 5.4% decline in the industry [7]

Core Insights - Scotts Miracle-Gro is a prominent player in the lawn and garden industry, known for its consumer and professional products, facing competition from companies like Bayer and Syngenta [1] Financial Performance - Stifel Nicolaus has set a price target of $70 for Scotts Miracle-Gro, indicating a potential upside of approximately 25% from its current trading price of $56.02 [2][6] - The stock has recently increased by $1.56, or 2.86%, reflecting positive investor sentiment [2] Strategic Initiatives - The company is implementing a turnaround strategy focused on reducing debt and enhancing free cash flow, which is essential after a challenging year [3][6] - E-commerce sales in the consumer business have risen by 23%, indicating growing momentum [3] - Retailer destocking is nearly complete, which is expected to positively impact performance in 2026 [3] Operational Developments - The Hawthorne unit, which previously faced challenges, is no longer consuming cash, marking a significant improvement for the company [4] - The dividend is now secure and fully covered by free cash flow, providing reassurance to investors regarding financial stability [4][6] Market Metrics - Scotts Miracle-Gro has a market capitalization of approximately $3.23 billion, with a trading volume of 1,445,083 shares [5] - The stock has experienced volatility, trading between $52.75 and $56.51 on the current day, with a yearly high of $83.55 and a low of $45.61 [5]

Shares of Scotts Miracle-Gro ( SMG ) have been a poor performer over the past year, losing about 40% of their value. Past missteps, including a foray into cannabis, left it with too much debt and too little cash flow, forcingOver fifteen years of experience making contrarian bets based on my macro view and stock-specific turnaround stories to garner outsized returns with a favorable risk/reward profile. If you want me to cover a specific stock or have a question for an article, just let me know!Analyst’s Di ...

Financial Data and Key Metrics Changes - Fiscal 2025 results showed strong sales growth in the U.S. Consumer business, with net sales reaching $2,990 million, a 1% increase from the previous year when excluding nonrecurring sales [38][39] - Gross margin improved significantly, with a non-GAAP adjusted gross margin rate of 31.2%, up from 26.3% in the prior year, exceeding the target of 30% [49][48] - Free cash flow for the year was $274 million, exceeding expectations and contributing to a reduction in leverage ratio to 4.1x from 4.86x in fiscal 2024 [52][54] Business Line Data and Key Metrics Changes - U.S. Consumer net sales for Q4 were $311.2 million, a 3% increase driven by strong demand for lawn products and Roundup [37] - E-commerce POS units increased by 51%, with e-commerce sales doubling at the largest retailer, contributing to a 10% share of overall POS [46][18] - The Hawthorne segment saw a significant decline in net sales, down 44% to $165.8 million, as the company focused on profitability improvements and divestiture strategies [46][31] Market Data and Key Metrics Changes - The overall category market share in units grew by 1%, with minimal competitive pressure from private label products, which represent less than 10% of the total category [45][27] - Point of sale (POS) units increased by 8.5% in fiscal 2025, building on nearly 9% growth from the previous year, indicating strong consumer engagement [29][42] Company Strategy and Development Direction - The company aims for U.S. Consumer net sales growth averaging at least 3% annually, with a focus on branded products and a shift away from low-margin commodities [8][13] - A multi-year share buyback program is planned for fiscal 2026, reflecting the company's commitment to shareholder-friendly actions [7][34] - The strategy includes significant investments in e-commerce, innovation, and marketing, particularly in the organic and natural solutions segment [20][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute its strategic plans, emphasizing the importance of branded products in driving growth [34][58] - The company is optimistic about fiscal 2026, expecting low single-digit growth in U.S. Consumer net sales and continued improvements in gross margin [55][54] - The management highlighted the resilience of the lawn and garden category, which is expected to grow despite economic challenges [27][26] Other Important Information - The company is undergoing SKU rationalization to streamline its portfolio and improve cost efficiencies [30][80] - A new incentive plan for associates will focus on metrics related to branded sales growth and gross margin, differing from previous plans based on EBITDA [16][16] Q&A Session Summary Question: How does the lawn strategy fit into the branded focus? - Management noted that the lawn strategy aims to increase consumer frequency and engagement, with new products designed to be effective and affordable [70][75] Question: Did the focus on branded solutions impact overall performance? - Management indicated that there was no significant pressure from private labels, and the shift towards branded products is expected to yield better margins and consumer engagement [84][90] Question: What are the expectations for advertising spend in FY 2026? - The company aims to increase advertising spend to around 8% of revenue in the long term, with a targeted spend of approximately $152 million for FY 2026 [96][101]

分组1 - Scotts Miracle-Gro reported a quarterly loss of $1.96 per share, which was worse than the Zacks Consensus Estimate of a loss of $1.88, but an improvement from a loss of $2.31 per share a year ago [1] - The company posted revenues of $387.4 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 2.8% and down from $414.7 million year-over-year [2] - Scotts shares have declined approximately 17.9% year-to-date, contrasting with the S&P 500's gain of 15.1% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is -$0.88 on revenues of $419.58 million, while for the current fiscal year, the estimate is $4.21 on revenues of $3.49 billion [7] - The Zacks Industry Rank for Agriculture - Operations is in the bottom 15% of over 250 Zacks industries, indicating potential challenges for stocks in this sector [8]

Fourth Quarter ended September 30, 2025 Quarterly Earnings Report Supplemental Financial Presentation November 5, 2025 Please view this presentation in conjunction with our Q4 2025 earnings release, which is furnished on Form 8-K, our related pre-recorded remarks and additional information regarding our non-GAAP financial measures, including GAAP to non-GAAP reconciliations, available on our website at https://investor.scotts.com. 1 Safe Harbor Disclosure Statements contained in this presentation, which add ...

Financial Performance - U.S. Consumer net sales for fiscal 2025 were $2.99 billion, in line with guidance[6] - GAAP gross margin rate improved by 670 basis points to 30.6%, while non-GAAP adjusted gross margin improved by 490 basis points to 31.2%[6] - GAAP earnings per share increased by $3.08 to $2.47, and non-GAAP adjusted earnings per share rose by $1.45 to $3.74[6] - Non-GAAP adjusted EBITDA for fiscal 2025 was $581 million, an increase of $71 million compared to the prior year[6] - Free cash flow reached $274 million, exceeding expectations, with net leverage improving to 4.10x, a reduction of 0.76x year-over-year[6] - Fiscal 2026 guidance includes non-GAAP adjusted earnings per share projected between $4.15 and $4.35[6] - The company expects non-GAAP adjusted gross margin to be at least 32% in fiscal 2026[6] - The company reported a net income of $145.2 million for fiscal 2025, a significant improvement from a net loss of $34.9 million in the previous year[13] - The company anticipates continued solid financial performance in fiscal 2026, reflecting its growth strategy[3] - For the twelve months ended September 30, 2025, the company reported a net income of $145.2 million, compared to a net loss of $34.9 million for the same period in 2024, representing a significant turnaround[24] - Adjusted EBITDA for the twelve months ended September 30, 2025, was $581.1 million, an increase from $510.1 million in 2024, reflecting a growth of approximately 13.9%[24] - Income from operations for the twelve months ended September 30, 2025, was $358.6 million, compared to $208.8 million in 2024, marking an increase of 71.8%[24] - Diluted net income per common share for the twelve months ended September 30, 2025, was $2.47, a significant increase from a loss of $0.61 per share in 2024[24] Sales and Segment Performance - For the three months ended September 30, 2025, consolidated net sales decreased by 7% to $387.4 million compared to $414.7 million in the same period of 2024[15] - The U.S. Consumer segment reported net sales of $311.2 million, a slight increase of 0.5% from $309.7 million in the prior year[15] - The Hawthorne segment experienced a significant decline in net sales, down 38% to $49.9 million from $80.5 million year-over-year[15] - Segment Profit (Loss) for the U.S. Consumer improved by 21% to a loss of $65.5 million compared to a loss of $82.5 million in the previous year[15] Operational Efficiency and Cost Management - The company is strategically implementing AI and robotic automation to enhance operational efficiencies and cost savings[3] - The gross margin as a percentage of sales improved to 30.6% in 2025 from 23.9% in 2024, indicating enhanced operational efficiency[24] - The company incurred impairment, restructuring, and other charges totaling $83.8 million for the twelve months ended September 30, 2025, compared to $146.3 million in 2024, showing a reduction of 42.6%[24] - The company’s interest expense decreased to $128.8 million in 2025 from $158.8 million in 2024, representing a reduction of approximately 18.9%[24] Cash Flow and Assets - The company generated $371.3 million in net cash from operating activities, down from $667.5 million in the previous year[20] - Free cash flow for the twelve months ended September 30, 2025, was $273.9 million, down from $583.5 million in 2024, highlighting a decrease of approximately 53%[28] - Total assets decreased to $2,742.0 million as of September 30, 2025, down from $2,871.9 million in 2024[17] - Total liabilities decreased to $3,099.5 million from $3,262.5 million year-over-year[17] Tax and Impairment Charges - The company’s income tax expense for the twelve months ended September 30, 2025, was $76.5 million, compared to $11.3 million in 2024, indicating a substantial increase in tax obligations[24] - During the three months ended September 30, 2024, the Company incurred costs of $16.8 million related to restructuring initiatives[43] - For the twelve months ended September 30, 2024, the Company incurred total restructuring costs of $83.5 million[43] - The Company recognized a non-cash, pre-tax impairment charge of $64.6 million related to convertible debt investments during the three and twelve months ended September 30, 2024[43] - Pre-tax impairment charges of $51.5 million and $61.9 million were recorded for the investment in Bonnie Plants, LLC during the three and twelve months ended September 30, 2024, respectively[43] - A valuation allowance against certain deferred tax assets resulted in an additional tax expense of $15.6 million during the three and twelve months ended September 30, 2024[43] - The Company recorded a gain of $12.1 million associated with a payment received from a dispute resolution during the twelve months ended September 30, 2024[43]

Core Insights - The Scotts Miracle-Gro Company reported significant improvements in key financial metrics for fiscal 2025, including gross margin, EBITDA, and EPS, indicating strong growth potential for fiscal 2026 [2][3][7]. Financial Performance - U.S. Consumer net sales reached $2.99 billion, aligning with guidance, with POS units and dollars increasing by 8.5% and 1.4% respectively [7]. - GAAP gross margin rate improved to 30.6%, while non-GAAP adjusted gross margin rate reached 31.2%, reflecting increases of 670 and 490 basis points over the prior year [7]. - GAAP earnings per share were $2.47, and non-GAAP adjusted earnings per share were $3.74, marking improvements of $3.08 and $1.45 per share over the previous year [7]. - Non-GAAP adjusted EBITDA was $581 million, an increase of $71 million compared to the prior year [7]. - Free cash flow of $274 million exceeded expectations, and net leverage improved to 4.10x, a reduction of 0.76x from the previous year [7]. Fiscal 2026 Guidance - The company anticipates continued growth, projecting non-GAAP adjusted gross margin of at least 32% and adjusted earnings per share between $4.15 and $4.35 for fiscal 2026 [7]. - Non-GAAP adjusted EBITDA is expected to show mid single-digit growth, with free cash flow projected at $275 million, further reducing the leverage ratio to the high 3's [7]. Operational Strategy - The company is implementing AI, robotic automation, and other efficiencies to achieve cost savings, which will be reinvested into brand innovation and channel expansion [3]. - The management expressed confidence in executing its growth strategy, supported by the strong financial performance and positive market trends observed in fiscal 2025 [3].

Core Viewpoint - Scotts Miracle-Gro Company is set to release its fourth quarter financial results on November 5, 2025, prior to the U.S. market opening, followed by a video presentation and a Q&A session [1]. Company Overview - Scotts Miracle-Gro is the world's largest marketer of branded consumer lawn and garden products, with approximately $3.6 billion in sales [3]. - The company's brands, including Scotts®, Miracle-Gro®, and Ortho®, are recognized as market leaders in their respective categories [3]. Investor Engagement - Investors can participate in the upcoming presentation and Q&A session by registering in advance through the provided webcast link [2]. - A replay of the conference call will be available on the company's investor website for at least 12 months [2].

Industry Overview - The U.S. cannabis industry is projected to exceed $35 billion in annual sales by 2025 and over $70 billion by 2030 as legalization efforts continue [1][3] - Recent discussions in Congress regarding cannabis rescheduling and the Department of Health and Human Services' recommendation to reclassify cannabis have increased investor optimism [1] Ancillary Companies' Role - Ancillary companies provide essential products and services to cannabis cultivators, including equipment, nutrients, and hydroponic systems, allowing them to operate efficiently without direct plant handling [3][19] - These companies offer investors diversified exposure with lower regulatory risk compared to direct cannabis producers [3] Key Ancillary Stocks - **GrowGeneration Corp. (GRWG)**: Operates a large hydroponic and organic gardening supply chain in the U.S., with over 60 retail locations. Reported approximately $41 million in net sales in the latest quarter, with gross margins improving to around 28% [5][9][10] - **Hydrofarm Holdings Group Inc. (HYFM)**: Designs and distributes hydroponic products, serving commercial cultivators and greenhouses. Recent financial results showed a per-share loss of around $3.60, with revenues impacted by weaker order volumes [11][12][13] - **Scotts Miracle-Gro Company (SMG)**: A leader in gardening solutions, its Hawthorne Gardening division provides hydroponic systems and nutrients. The company reaffirmed its full-year 2025 outlook, with rising demand in the Hawthorne segment and robust free cash flow [14][17][18] Market Dynamics - The cannabis sector is experiencing renewed growth as more states move toward legalization, which is expected to drive demand for cultivation supplies and equipment [1][20] - Ancillary stocks may present strong short-term trading opportunities as the market stabilizes and cultivators increase capacity [2][21]