Scotts Miracle-Gro's Q1 Earnings and Revenues Beat Estimates

Core Insights - Scotts Miracle-Gro Company (SMG) reported a first-quarter fiscal 2025 loss of $69.5 million or $1.21 per share, an improvement from a loss of $80.5 million or $1.42 per share in the same quarter last year [1] - Adjusted loss was 89 cents per share, better than a loss of $1.45 a year ago and narrower than the Zacks Consensus Estimate of a loss of $1.28 [1][2] - Net sales increased by approximately 1.6% year over year to $416.8 million, surpassing the consensus estimate of $393.4 million [2] Segment Performance - U.S. Consumer division net sales rose 11% year over year to $340.9 million, exceeding the estimate of $318.8 million, driven by a strong fall season and early retailer load-in for spring [3] - Hawthorne segment net sales fell 35% year over year to $52.1 million, missing the estimate of $61.7 million, attributed to a strategic exit from third-party distribution [4] - Other segment net sales increased by 1% year over year to $23.8 million [4] Financial Position - At the end of the quarter, cash and cash equivalents were $9.8 million, down from $10.4 million a year ago, while long-term debt decreased to $2,636.9 million from $2,969 million [5] Fiscal 2025 Outlook - The company reaffirmed its full-year sales, adjusted gross margin, and adjusted EBITDA guidance, while reducing interest expense guidance [6] - U.S. consumer net sales are expected to grow in low single digits, excluding non-repeat sales for AeroGarden and bulk raw material sales, while Hawthorne's net sales are projected to decline by mid-single digits [6] - Adjusted gross margin is anticipated to be around 30% for fiscal 2025, with adjusted EBITDA projected between $570 million and $590 million [6] Stock Performance - Scotts Miracle-Gro shares have increased by 32.5% over the past year, compared to a 7.8% rise in the industry [7]