Financial Data and Key Metrics Changes - Net sales for the second quarter were $834 million, a decrease of 7% compared to the prior year [16] - Gross profit was $273 million, down 2%, but gross margin expanded by 180 basis points to 32.8% [16] - Non-GAAP net income totaled $68 million, an increase of 3%, with non-GAAP EPS of $1.04, up $0.05 [19] - GAAP earnings per share rose by $0.05 to $0.98 [19] - Adjusted EBITDA was $123 million, $1 million below the prior year quarter [19] Business Line Data and Key Metrics Changes Pet Segment - Pet net sales totaled $454 million, a decrease of 6% [20] - E-commerce sales represented 27% of Pet sales, up from the prior year [21] - Non-GAAP operating income for Pet reached $66 million, up 5%, with a non-GAAP operating margin of 14.5%, an increase of 150 basis points [21] Garden Segment - Garden net sales totaled $380 million, a 10% decrease [22] - E-commerce sales in the Garden segment delivered double-digit growth, particularly in Wild Bird and Grass Seed categories [23] - GAAP operating income for Garden was $59 million, up $2 million, with a GAAP operating margin of 15.5%, an increase of 190 basis points [23] Market Data and Key Metrics Changes - The earlier timing of customer orders and promotional events shifted sales into the first quarter, impacting both segments [6][22] - POS trends in the Garden segment were down low single digits, reflecting the delayed start to the garden selling season [22] - The Wild Bird business achieved record sales, benefiting from extended cold weather [8][50] Company Strategy and Development Direction - The company is focused on streamlining operations through footprint consolidation, portfolio refinement, and cost structure improvements [5][12] - The M&A strategy aims to identify high-growth consumable companies with accretive margins [26] - Continued investment in e-commerce, digital technology, and innovation is prioritized [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the outlook for the year despite navigating a challenging environment in the second half [5][14] - Anticipated increased consumer caution and a more promotional retail environment due to macroeconomic uncertainties [14] - The company reaffirmed its fiscal 2025 guidance for non-GAAP EPS of $2.2 or higher [26] Other Important Information - The company has completed significant inventory reductions of $90 million across both segments [24] - Cash and cash equivalents at the end of the second quarter were $517 million, an increase of $215 million [25] - The company repurchased approximately 1.2 million shares for $41 million during the quarter [24] Q&A Session Summary Question: Can you talk about Pet trends, particularly durables versus consumables? - Management noted a 6% decline in net sales due to earlier customer orders and SKU rationalization efforts [29][30] - Consumables were up low to mid-single digits, while durables were down double digits [31] Question: How are tariffs impacting your business? - Management indicated that tariffs affect about 13% of total import costs, primarily from China [34] - Plans are in place for vendor concessions and pricing adjustments to mitigate tariff impacts [35] Question: What are you seeing in the Garden segment regarding the spring selling season? - Management acknowledged a delayed season but noted improved consumption as weather conditions became favorable [46][64] Question: Are you seeing trade down to private label products? - Management confirmed some trade down to private label, particularly in the Wild Bird business [68][71] Question: How is the M&A environment being impacted by tariffs? - Management noted that M&A activity is low, with a disconnect between bid-ask spreads due to current market conditions [79][80]

ACHIEVED SOLID SECOND QUARTER RESULTS NET SALES $834MM (7)% vs. PY NON-GAAP OPERATING INCOME $99MM in line with PY PET NET SALES $454MM (6)% vs. PY NON-GAAP OPERATING INCOME $66MM 5% vs. PY e GAAP to non-GAAP reconciliation is available at IR.central.com Q2 2025 FINANCIAL RESULTS NON-GAAP EPS $1.04 $0.05 vs. PY GARDEN NET SALES $380MM (10)% vs. PY OPERATING INCOME $59MM 3% vs. PY Home is central to life—we are Central to home Q2 HIGHLIGHTS Continued execution of Cost & Simplicity program enhances efficiency ...

Scotts Miracle-Gro (SMG) Q2 2025 Earnings Call April 30, 2025 09:00 AM ET Company Participants Brad Chelton - VP - Treasury, Tax & Investor RelationsMark Scheiwer - Executive VP, CFO & Chief Accounting OfficerJim Hagedorn - Chairman and CEOJon Andersen - Partner - Equity ResearchJonathan Matuszewski - Senior Vice PresidentNate Baxter - President & COOJosh Meihls - Vice President of Sales Strategy & OperationsW. Andrew Carter - Vice PresidentJoe Altobello - Managing DirectorEric Bosshard - CEOJohn Sass - SVP ...

Scotts Miracle-Gro (SMG) Q2 2025 Earnings Call April 30, 2025 09:00 AM ET Speaker0 Good morning. Speaker1 Welcome to Scotts Miracle Gro's second quarter twenty twenty five earnings webcast. I'm Brad Shelton, Head of Investor Relations. Speaking today are Chairman and CEO, Jim Hagedorn and Chief Financial Officer and Chief Accounting Officer, Mark Shiwer. Jim will provide a business update, followed by Mark with a review of our financial results. In conjunction with our commentary today, please review our ea ...