Scotts Miracle-Gro's Q4 Earnings and Revenues Miss Estimates

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]