ScottsMiracle-Gro Reports Strong Fiscal 2025 Full-Year Results Driven by Robust Gross Margin Expansion and EPS Growth

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].