Core Insights - Brazilian fintech AGI (NYSE: AGBK) is celebrating its IPO after raising $240 million [1] - The DOW is experiencing a positive trend, closing above 50,000 for three consecutive sessions [1] - The market is anticipating the delayed January Jobs Report [1] Company Highlights - AGI's IPO marks a significant milestone for the company, indicating strong investor interest and confidence in the fintech sector [1] - The successful fundraising of $240 million positions AGI for future growth and expansion in the competitive fintech landscape [1] Market Context - The overall market sentiment is positive, with traders reacting favorably to recent performance indicators [1] - The upcoming January Jobs Report is expected to provide further insights into the economic landscape, influencing market dynamics [1]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _________________________________________ FORM 10-Q _________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 27, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-11593 ____________________________________ The S ...

Core Insights - Scotts Miracle-Gro is focused on strengthening its financial position while investing for growth, as highlighted during the annual shareholder meeting [2] - The company has successfully paid down over $1.5 billion in debt and expects to return to historical leverage norms later this fiscal year [3][5] Financial Position and Performance - The management emphasizes improvements in capital structure, free cash flow generation, margin enhancement, and solid EBITDA growth [3] - The company aims to achieve leverage in the "threes" range, indicating a significant reduction in debt levels [3][5] Investment Strategies - Scotts Miracle-Gro is investing in brand development, product innovation, and digital marketing to reach new customer segments [4] - The focus on e-commerce and digital channels is seen as a key growth driver, alongside efforts to enhance cost and supply-chain efficiencies through automation and AI [5] Shareholder Engagement - All four proposals presented at the annual general meeting were approved by shareholders, including director elections and executive compensation [2][5]

Core Insights - The cannabis sector is evolving, with ancillary companies better positioned than plant-touching operators due to lower regulatory risks and better resilience during market downturns [1][2] - Ancillary cannabis stocks can benefit from consistent demand for cultivation supplies, regardless of which operators gain market share [2] - Investors are focusing on improving margins and cost discipline as ancillary companies restructure and strengthen their balance sheets [3] Company Summaries GrowGeneration (GRWG) - GrowGeneration is a leading retailer of hydroponic and cultivation supplies, serving both commercial cultivators and home growers without operating cannabis dispensaries [5][9] - As of late 2025, GrowGeneration operated 24 locations across 11 states, offering a range of products through both physical and online channels [7] - Recent financial performance showed revenue growth, improved gross margins, and a narrowing of net losses, with management expecting continued revenue growth in 2026 [9][10] Hydrofarm Holdings Group (HYFM) - Hydrofarm manufactures and distributes hydroponic equipment and supplies, focusing on lighting and climate systems without operating dispensaries [11][13] - Recent financial results indicated a year-over-year revenue decline due to softer industry demand, but management is working on restructuring and improving supply chain efficiency [13][14] - Hydrofarm carries higher risk but also offers higher potential rewards, making it a speculative option for traders [15] The Scotts Miracle-Gro Company (SMG) - Scotts Miracle-Gro is known for consumer lawn and garden products and has historically been involved in the cannabis supply chain through its Hawthorne Gardening business [16][18] - The company has shifted its strategy by selling its Hawthorne division, focusing on core consumer businesses while retaining some indirect cannabis exposure [18][19] - Financial results reflect this transition, with stable gross margins and a focus on generating steadier cash flow, making it a conservative option for investors [19] Final Thoughts - Ancillary cannabis stocks present unique opportunities, with GrowGeneration showing turnaround potential, Hydrofarm offering higher-beta exposure, and Scotts Miracle-Gro providing defensive positioning [20]

Core Insights - The Scotts Miracle-Gro Company (NYSE:SMG) is recognized as one of the best dividend stocks to buy in February [1] - UBS has raised its price target for Scotts Miracle-Gro from $61 to $66 while maintaining a Neutral rating, indicating ongoing pressures in the consumer staples sector but potential improvement in fundamentals by 2026 [2] Company Overview - Scotts Miracle-Gro specializes in lawn care products and sells directly to consumers, which benefited the company during the pandemic when demand for home projects surged [3] - The company's Hawthorne unit, linked to the cannabis market, has faced challenges as the cannabis sector has cooled off [3] Business Restructuring - Management is implementing a restructuring effort to streamline operations and eliminate lower-margin product lines, aiming for growth in 2024 with improved margins [4] - The U.S. consumer business reported a 6% increase in sales by the end of the year, with profits continuing to improve in 2025 despite overall sales flattening [4] Market Position - Scotts Miracle-Gro remains the leading brand in at-home lawn care, providing a solid foundation for long-term growth [5]

Core Insights - The cannabis industry is evolving with a focus on efficiency, margin recovery, and balance sheet strength as operators adapt to tighter capital markets and shifting regulations [2][19] - Ancillary cannabis stocks provide alternative exposure to the industry, supporting it without directly selling cannabis, thus avoiding many regulatory risks while benefiting from cultivation and retail improvements [1][19] Industry Trends - Growers are upgrading equipment, improving yields, and cutting costs instead of reckless expansion, favoring well-positioned ancillary suppliers [2] - Federal reform discussions create volatility, but the demand for essential products like nutrients and lighting remains consistent, offering attractive risk-reward setups for investors [3][19] Company Summaries GrowGeneration (GRWG) - GrowGeneration is a leading hydroponics and cultivation supply company, serving cannabis growers with essential products like lighting, nutrients, and climate control [5][7] - The company has shown signs of stabilization with sequential revenue improvement and expanded gross margins, marking a return to positive adjusted EBITDA [9][10] - Key focus for GRWG is on margin sustainability and potential earnings amplification with a modest rebound in cultivation spending [10] Hydrofarm Holdings Group (HYFM) - Hydrofarm is a distributor focused on controlled environment agriculture, providing essential tools for indoor cannabis cultivation [10][11] - The company has faced revenue declines and compressed gross margins due to reduced capital expenditures from growers, but it has made progress in reducing operating expenses [11] - Investors should monitor revenue stabilization, as even flat sales could improve cash flow if costs are controlled [12] The Scotts Miracle-Gro Company (SMG) - Scotts is known for lawn and garden products but has exposure to cannabis through its Hawthorne Gardening division, which supplies hydroponic equipment [14][16] - The decision to divest Hawthorne simplifies the business and reduces cannabis-related volatility, allowing a focus on its core consumer segment [16] - Financially, Scotts has shown improving margins and prioritized debt reduction, making it a lower-risk option for investors seeking stability [17][18] Investment Considerations - Ancillary stocks are critical to the cannabis ecosystem, as growers rely on supplies and systems [22] - Each highlighted company serves different investor profiles, with GrowGeneration focusing on recovery, Hydrofarm offering higher risk and leverage, and Scotts providing stability [20][21]

Core Insights - Scotts Miracle-Gro reported a revenue of $354.4 million for the quarter ended December 2025, reflecting a year-over-year decline of 15% [1] - The company's EPS was -$0.77, an improvement from -$0.89 a year ago, with a surprise of +25.68% compared to the consensus estimate of -$1.04 [1] - The revenue exceeded the Zacks Consensus Estimate of $350.63 million, resulting in a surprise of +1.08% [1] Financial Performance Metrics - Net Sales- Other reached $25.9 million, surpassing the four-analyst average estimate of $23.11 million, marking a year-over-year increase of +8.8% [4] - Net Sales- U.S. Consumer totaled $328.5 million, which is below the four-analyst average estimate of $293.75 million, indicating a year-over-year decline of -3.6% [4] - Segment Profit (Loss) (Non-GAAP) for U.S. Consumer was $9 million, slightly below the two-analyst average estimate of $10.02 million [4] - Segment Profit (Loss) (Non-GAAP) for Corporate was reported at -$25.3 million, better than the average estimate of -$31.21 million [4] - Segment Profit (Loss) (Non-GAAP) for Other was -$1.7 million, compared to the average estimate of -$2.08 million [4] Stock Performance - Scotts shares have returned +9.6% over the past month, outperforming the Zacks S&P 500 composite, which saw a change of +0.8% [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [3]

Financial Data and Key Metrics Changes - The company reported total net sales of $354.4 million for the quarter, with U.S. consumer sales at $328.5 million, exceeding expectations due to early season load-in activities [30] - Gross margin improved to 25%, up 90 basis points year-over-year, while non-GAAP adjusted gross margin was 25.4%, compared to 24.5% a year ago [34] - The GAAP net loss from continuing operations was $47.8 million, or $0.83 per share, an improvement from a loss of $66.1 million, or $1.15 per share, in the prior year [36] Business Line Data and Key Metrics Changes - The company is focusing on high-margin branded products, with a notable increase in e-commerce sales, which were up 12% in dollars and 17% in units [33] - Indoor gardening POS was up 7.7% in dollars and 9% in units, while Roundup saw a 24% increase in dollars and 27% in units [33] - The divestiture of the Hawthorne business is expected to contribute positively to gross margin and has already improved it by 40 basis points [12][28] Market Data and Key Metrics Changes - The company is experiencing a shift in consumer demographics, with a growing focus on engaging millennials and Gen Z consumers [18] - E-commerce sales represented 14% of overall POS in Q1, a 150 basis point increase over the prior year, indicating a strong growth area [33] - Retailer shipments in January were at a record pace, suggesting positive momentum heading into the spring and summer lawn and garden season [30] Company Strategy and Development Direction - The company is investing nearly $1 billion annually in marketing and innovation to drive sales of high-margin branded products [5] - A new multi-year, $500 million share repurchase program has been approved, aiming to reduce share count to around 40 million shares over time [6][10] - The company plans to achieve $1 billion in top-line sales growth and total EBITDA of $1 billion by 2030, with a focus on modest tuck-in M&A to fill gaps in the lawn and garden portfolio [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in outperforming fiscal 2026 guidance, driven by innovation and strong retail partnerships [9][43] - The company is focused on long-term growth and is not overly concerned with quarterly results, emphasizing milestone achievements instead [54] - Management highlighted the importance of engaging a broader consumer base and adapting marketing strategies to attract emerging consumers [18] Other Important Information - The company is implementing a comprehensive plan to enhance its digital presence, including a new website that consolidates all brands and offers AI-driven consumer guidance [23] - The company is also increasing investments in CapEx to support fertilizer innovation and supply chain automation [24] - The sale of Hawthorne is expected to close this quarter, allowing the company to focus on its core lawn and garden business [12] Q&A Session Questions and Answers Question: Can you discuss the confidence in outperforming guidance this year? - Management indicated that confidence stems from gross margin improvements and strong retail partnerships, with expectations to exceed the 32% gross margin target [40][41][43] Question: How has early retailer activity influenced your view on inventory loads? - Management noted that early activity has shown positive momentum, but emphasized the importance of not overreacting to short-term fluctuations due to weather impacts [55][56] Question: What is the potential size of the e-commerce business and its margin compared to brick-and-mortar? - Management believes the e-commerce business can be substantial, with a margin delta of less than five percentage points compared to traditional retail, indicating strong growth potential [78]

Financial Data and Key Metrics Changes - Total company net sales for the quarter were $354.4 million, with U.S. consumer sales at $328.5 million, exceeding expectations due to early season load-in activities [29][30] - GAAP gross margin rate improved to 25%, up 90 basis points year-over-year, while non-GAAP adjusted gross margin rate was 25.4%, compared to 24.5% a year ago [34] - The GAAP net loss from continuing operations was $47.8 million, or $0.83 per share, an improvement from a loss of $66.1 million, or $1.15 per share in the prior year [36] Business Line Data and Key Metrics Changes - The divestiture of the Hawthorne business has been classified as a discontinued operation, contributing to a 40 basis point improvement in gross margin [12][28] - POS for indoor gardening increased by 7.7% in dollars and 9% in units, while Roundup saw a 24% increase in dollars and 27% in units [33] - E-commerce POS dollars for branded products were up 12% and units were up 17%, representing 14% of overall POS in Q1, a 150 basis point increase over the prior year [33] Market Data and Key Metrics Changes - The company is focusing on expanding household penetration, which is currently as low as 10% in some categories, while shifting demographics show a growing interest from Millennials and Gen Z [17][18] - Retailer shipments in January were at a record pace, indicating strong early season demand [30] - The company is enhancing its digital platform to consolidate brands and improve e-commerce capabilities, which is expected to drive further growth [23] Company Strategy and Development Direction - The company is investing nearly $1 billion annually in marketing and innovation to drive sales of high-margin branded products [5][6] - A new multi-year, $500 million share repurchase program has been approved, aiming to reduce share count to around 40 million shares over time [6][10] - The company plans to achieve $1 billion in top-line sales growth and total EBITDA of $1 billion by 2030, with a focus on modest tuck-in M&A to fill gaps in the lawn and garden portfolio [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in outperforming fiscal 2026 guidance due to strong retailer relationships and innovative product offerings [39][43] - The company is focused on long-term growth rather than quarterly results, emphasizing the importance of achieving milestones [54][56] - Management highlighted the positive consumer engagement in the lawn and garden category, which is expected to drive future sales growth [18][25] Other Important Information - The company is planning to hold an Investor Day in the summer to share more details about its long-term financial priorities [37] - The sale of Hawthorne is expected to close this quarter, which will further strengthen the company's balance sheet and eliminate cannabis sector volatility [12][14] Q&A Session Questions and Answers Question: Can you discuss the confidence in outperforming guidance this year? - Management indicated that improvements in gross margin and strong retailer relationships contribute to their confidence in outperforming guidance [40][43] Question: How has early retailer activity influenced your view on inventory loads? - Management noted that early retailer shipments have shown positive momentum, suggesting a return to more traditional inventory patterns [56][59] Question: What is the potential for e-commerce growth and its margin compared to brick-and-mortar? - Management believes e-commerce can be a significant growth area, with margins closely aligned to brick-and-mortar, showing less than a five percentage point delta [78]

Financial Data and Key Metrics Changes - The company reported total net sales of $354.4 million for Q1 2026, with US consumer sales at $328.5 million, exceeding expectations due to early season load-in activities [26][27] - GAAP gross margin rate improved to 25%, up 90 basis points year-over-year, while non-GAAP adjusted gross margin rate was 25.4%, compared to 24.5% a year ago [32] - The GAAP net loss from continuing operations was $47.8 million, or $0.83 per share, an improvement from a loss of $66.1 million, or $1.15 per share in the prior year [34] Business Line Data and Key Metrics Changes - The company is focusing on high-margin branded products, with e-commerce POS dollars for branded products up 12% and units up 17% in Q1 [31] - Indoor gardening POS was up 7.7% in dollars and 9% in units, while Roundup saw a 24% increase in dollars and 27% in units [31] - The divestiture of the Hawthorne business is expected to contribute to a 40 basis point improvement in gross margin [10] Market Data and Key Metrics Changes - Retailer shipments in January 2026 were at a record pace, indicating strong early season demand [27] - The company is expanding its e-commerce presence, with branded product e-commerce sales representing 14% of overall POS in Q1, a 150 basis point increase over the prior year [31] - The company is targeting a 5% annual top-line growth through innovation, pricing, volume, and M&A [6] Company Strategy and Development Direction - The company is investing nearly $1 billion annually in marketing and consumer activation to drive purchases of high-margin branded products [4] - A new multi-year, $500 million share repurchase program was approved to reduce share count to around 40 million shares [4][9] - The company plans to focus on lawn and garden, divesting non-core operations like Hawthorne to strengthen its primary business [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in outperforming fiscal 2026 guidance, citing strong retailer support and positive early season indicators [38][41] - The company is committed to a long-term growth trajectory, with a goal of $1 billion in top-line sales growth and EBITDA by 2030 [6][13] - Management emphasized a shift away from quarterly performance focus, aiming for milestone achievements instead [52] Other Important Information - The company is implementing a comprehensive plan for long-term growth, with a focus on innovation and expanding product offerings [14][16] - The company is enhancing its digital platform to improve consumer engagement and e-commerce capabilities [20] - A phased approach to share repurchases is planned, with flexibility to adjust based on financial performance [25] Q&A Session Questions and Answers Question: Can you discuss the confidence in outperforming guidance this year? - Management highlighted improvements in gross margin due to the Hawthorne divestiture and positive sales momentum from retailers as key factors for confidence [39][41] Question: How has early retailer activity influenced your view on inventory loads? - Management noted that early activity has shown optimism from retailers, but emphasized a focus on long-term milestones rather than quarterly results [52][56] Question: What is the potential size of the e-commerce business and its margin compared to brick-and-mortar? - Management indicated that e-commerce presents a significant growth opportunity, with margins being competitive and improving as retailers invest in infrastructure [77][79]