Summary of Scotts Miracle-Gro Conference Call (December 09, 2025) Company Overview - **Company**: Scotts Miracle-Gro (NYSE: SMG) - **Industry**: Consumer Lawn and Garden Products, Hydroponics Key Points U.S. Consumer Business Performance - The U.S. consumer business experienced a cumulative sales growth of approximately 6%-7% over fiscal years 2024 and 2025, translating to an annual growth rate of about 3%-3.5% [2][4] - Recent volatility in sales is attributed to post-COVID adjustments, inventory management, and a shift in sales phasing from 60% in the first half to 55% in the past year [3][4] - Retailer inventories are reported to be healthy, supporting future growth initiatives [4] Future Growth Projections - The company anticipates annual sales growth of at least 3% moving forward, with historical growth rates averaging between 3% to 5% over a decade [5][6] - Innovation, e-commerce expansion, and strategic pricing are identified as key growth drivers [6][17] E-commerce and Market Trends - E-commerce sales currently account for about 10% of total POS sales, up from less than 2% five years ago, with expectations for continued double-digit growth [34] - The company is focusing on expanding its presence in the e-commerce space, particularly through partnerships with major retailers [20][34] Product Strategy and Market Share - The company gained four points of market share in fiscal year 2024 and netted one point in the following year, indicating resilience against private label competition [31][32] - The strategy includes moving away from low-margin commodity products towards branded offerings, with expectations for mid-single-digit growth in branded products [9][32] Gross Margin Recovery - Gross margins fell from mid-30s to below 24% due to COVID-related buildouts and increased fixed costs, but are projected to recover to 31% by the end of 2025, with a goal of reaching mid-30s in the future [44][48] - Key drivers for margin recovery include pricing strategies, cost savings initiatives, and investments in automation and technology [49][50] Consumer Engagement and Education - The company aims to increase household penetration in lawn care, currently at about 11%, by focusing on education and frequency of product use [26][27] - There is a strategic shift towards promoting multi-step lawn care programs to enhance consumer engagement [28][30] Innovation and M&A Strategy - The innovation pipeline is expected to contribute significantly to future growth, with plans for small tuck-in acquisitions to enhance product offerings [17][18] - The company is exploring opportunities in adjacent categories, particularly in pest control and gardening, to expand its market presence [22][23] Demographic Focus - A dedicated team is being formed to engage with the Hispanic demographic, recognizing its growing importance in the consumer base [21][22] Conclusion - Scotts Miracle-Gro is positioning itself for consistent growth through strategic innovation, e-commerce expansion, and a focus on branded products while navigating the challenges of post-COVID market dynamics and improving gross margins [10][50]

Core Insights - Scotts Miracle-Gro Company is a leading marketer of branded consumer lawn and garden products in North America, with approximately $3.4 billion in sales [3] Group 1: Company Announcement - Nate Baxter, president and chief operating officer, and Mark Scheiwer, chief financial officer and chief accounting officer, will participate in a fireside chat at the Raymond James 2025 TMT & Consumer Conference on December 9, 2025, at 2:20 p.m. ET [1] - Investors can listen to a live webcast of the presentation and fireside chat from the Company's investor relations website, with an archive available for at least 90 days [2] Group 2: Company Overview - Scotts Miracle-Gro's brands, including Scotts®, Miracle-Gro®, Ortho®, and Tomcat®, are among the most recognized and market-leading in their categories within the lawn and garden industry [3]

Core Insights - Scott's Miracle Grow is focusing on balancing innovation with sustainability while modernizing its legacy brands to attract younger consumers, particularly millennials and Gen Z [1][2][3] - The company reported a loss in its latest earnings, but positive EBIT and a significant margin recovery of almost 500 basis points over the past year, indicating operational improvements [1][2] - The decision to exit the cannabis business through its Hawthorne subsidiary is driven by a challenging market environment, with plans to find a partner outside the company [3][4] Financial Performance - The company experienced a loss in Q4, which is typical due to its seasonal business model, with profits primarily generated in fiscal Q2 and Q3 [1][2] - Free cash flow for the most recent period was just under $275 million, with a focus on deleveraging and reducing historical debt levels [13][15] - The company aims for $150 million in supply chain cost savings over three years, with a significant portion driven by technology improvements in demand planning and forecasting [4][5] Consumer Engagement and Target Demographics - The company is targeting two main demographics: older consumers (baby boomers and Gen X) focused on traditional lawn aesthetics, and younger consumers (millennials and Gen Z) who prioritize health, wellness, and creating engaging outdoor spaces [2][3] - Younger consumers are increasingly interested in indoor gardening and sustainable practices, leading the company to adapt its messaging and marketing strategies to resonate with this audience [2][3][4] - The company recognizes the need for authenticity in its branding and is shifting its marketing efforts towards digital platforms to better engage younger consumers [2][3] Product Development and Sustainability - Scott's Miracle Grow is committed to increasing the proportion of natural and organic products, with a goal of having at least 25% of its point-of-sale offerings be natural or organic within the next three to four years [3][4] - The company is exploring partnerships and research into biological solutions to reduce reliance on synthetic chemicals, aiming for a more sustainable product line [3][4] - Modernization efforts include updating packaging aesthetics to appeal to younger consumers and developing products tailored to regional needs, particularly in areas with different climate challenges [3][4][12] Strategic Focus and Future Plans - The company is prioritizing its core lawn and garden business while considering small tuck-in acquisitions to enhance its brand portfolio [15][16] - There is an emphasis on improving e-commerce presence, with plans to launch a new website that is more engaging and educational for consumers [3][4] - The management is open to exploring larger transformational opportunities in the lawn and garden sector, while maintaining a cautious approach to capital allocation [20][21]

Company Overview - Scotts Miracle-Gro is the leading marketer of branded consumer lawn and garden products in North America, with key brands including Scotts, Miracle-Gro, Ortho, and Tomcat[13]. - The company reported research and development spending of $34.8 million in fiscal 2025, slightly down from $35.7 million in fiscal 2023[30]. - More than 75% of annual net sales for the North America consumer lawn and garden business occur in the second and third fiscal quarters combined[24]. - The Home Depot and Lowe's are the two largest customers, each representing more than 10% of reported consolidated net sales[25]. - There were no material acquisitions or divestitures during fiscal 2025 or fiscal 2024[18]. - The company has an exclusive marketing agreement with Monsanto for certain consumer Roundup branded products in the U.S.[30]. - The company maintains a competitive edge through a robust portfolio of trademarks, patents, and trade secrets[23]. - The company utilizes third parties to manage key distribution centers strategically located across the U.S. and Canada[20]. Financial Performance and Risks - The company is subject to market risks due to fluctuating prices of raw materials, including urea and other fertilizer inputs[22]. - A change in the variable interest rate of 100 basis points for a full twelve-month period would impact interest expense by $5.3, assuming average unhedged variable interest rate borrowing levels of $525.0 during fiscal 2025[359]. - The company is exposed to market risks from fluctuations in foreign currency exchange rates and prices of raw materials such as urea and natural gas[361]. - The company has a total long-term fixed rate debt of $1,600.0 million with an average interest rate of 4.4%[360]. - Variable rate debt amounts to $625.0 million, with an average interest rate of 7.5%[360]. - The average interest rate for fixed rate debt in 2025 is projected to be 5.3%[360]. - The company has a total long-term variable rate debt of $500.0 million with an average interest rate of 6.0%[360]. - The company’s total long-term debt, including fixed and variable rates, is $2,225.0 million[360]. - Interest rate derivatives, specifically interest rate swaps, resulted in a total loss of $4.4 million with an average rate of 3.9%[362]. - Interest rate swaps have shown a consistent loss across multiple periods, indicating potential volatility in interest expenses[362]. - The company is actively managing market risks through derivative instruments as outlined in their financial statements[361]. Environmental and Social Responsibility - As of September 30, 2025, the company accrued $3.1 million for environmental matters, with expenses of $0.5 million, $0.1 million, and $0.4 million for fiscal 2025, 2024, and 2023 respectively[39]. - The company’s Environmental Health and Safety system incorporates developed industry guidelines to address associate health and safety[55]. - The company’s ESG Steering Committee meets quarterly to review progress and set new program goals related to sustainability[58]. - The company published its annual Corporate Responsibility Report in fiscal 2025, prepared in reference to the Global Reporting Initiative Standards[60]. - The company’s extended producer responsibility programs include targets for post-consumer recycling usage and compostable packaging[35]. Workforce and Employee Benefits - The company employed approximately 5,200 associates as of September 30, 2025, with a peak workforce of about 6,900 during fiscal 2025[42]. - The company offers a 7.5% match on 401(k) contributions and allows associates to purchase common shares at a 15% discount through its stock purchase plan[54]. Regulatory Matters - The company is subject to various regulatory proceedings, none of which are expected to be material to its business[39].

Core Points - Starting in 2026, the Columbus Crew's stadium will be named ScottsMiracle-Gro Field, marking an expansion of the partnership between the Crew and ScottsMiracle-Gro Company, which has lasted over 15 years [1][2][3] Group 1: Partnership Details - The multi-year agreement includes stadium naming rights and aims to enhance community initiatives, particularly focusing on youth soccer and outdoor activities [3][7] - ScottsMiracle-Gro has been the Official Lawn Care & Gardening Partner for the Crew, providing products for maintaining the natural grass playing surfaces and supporting community programs [3][11] Group 2: Stadium and Events - The Crew's downtown stadium, opened in 2021, has hosted a record streak of 35 MLS regular season matches with capacity crowds from 2023 to 2025 [4] - The stadium will also host major soccer events, including the 2024 MLS All-Star Game and multiple U.S. Men's National Team matches, alongside private events throughout the year [5] Group 3: Community Engagement - The partnership will include the "Soccer in Schools" program, which aims to inspire youth participation in soccer and promote healthy habits [8] - The program provides educational resources to local school districts and aligns with physical education standards [8]

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]