Scotts (SMG) Up 6.8% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Scotts Miracle-Gro has shown a positive stock performance, increasing by approximately 6.8% since the last earnings report, outperforming the S&P 500 [1][2] Earnings Report Summary - For Q1 fiscal 2026, Scotts Miracle-Gro reported a loss of $125 million or $2.16 per share, compared to a loss of $69.5 million or $1.21 per share in the same quarter last year [3] - The adjusted loss from continuing operations was 77 cents per share, which is an improvement from 88 cents a year ago and better than the Zacks Consensus Estimate of a loss of $1.04 [3] - Net sales decreased by approximately 3% year over year to $354.4 million, surpassing the consensus estimate of $350.6 million [4] Segment Highlights - In the U.S. Consumer division, net sales fell by 4% year over year to $328.5 million, exceeding the estimate of $312 million, with a profit of $9 million, down 8% year over year [5] - The other segment saw a 1% year-over-year growth in net sales to $25.9 million, beating the estimate of $22.2 million, and reported a loss of $1.7 million, which is an improvement of 45% year over year [5] Financial Position - At the end of the quarter, the company had cash and cash equivalents of $8.3 million, an increase from $5.7 million a year ago [6] - Long-term debt was reported at $2,250.2 million, reflecting a decrease of approximately 14.7% year over year [6] Outlook - The company reaffirmed its full-year fiscal 2026 outlook, projecting low single-digit growth in U.S. Consumer net sales, an adjusted gross margin of at least 32%, and adjusted EBITDA growth in the mid-single digits [7] - Adjusted earnings per share are expected to be between $4.15 and $4.35, with free cash flow estimated at approximately $275 million [7] Estimate Trends - In the past month, there has been a flat trend in fresh estimates from investors [8] VGM Scores - Scotts Miracle-Gro currently has a poor Growth Score of F, a Momentum Score of B, and a Value Score of C, placing it in the middle 20% for the value investment strategy [9] Zacks Rank - The company holds a Zacks Rank of 3 (Hold), indicating an expectation of an in-line return from the stock in the upcoming months [10]