The Scotts Miracle-Gro (NYSE:SMG) Q1 2026 Earnings call January 28, 2026 09:00 AM ET Company ParticipantsBrad Chelton - VP of Treasury, Tax & Investor RelationsCarla Casella - Managing DirectorJim Hagedorn - Chairman and CEOJosh Meihls - Senior VP and Chief Growth OfficerMark Scheiwer - EVP, CFO and Chief Accounting OfficerNate Baxter - President and COOConference Call ParticipantsAndrew Carter - AnalystChris Carey - Senior Equity AnalystJonathan Matuszewski - Consumer AnalystJoseph Altobello - Managing Dir ...

Core Viewpoint - Bayer AG's shares increased by 6.41% following the announcement that the Supreme Court will review the Durnell Roundup case, which is significant for the company's ongoing litigation related to its glyphosate-based herbicide Roundup [1][9]. Legal Developments - The Supreme Court's review will address a split among federal circuit courts regarding federal preemption, a key issue in the Roundup litigation [2][9]. - The Solicitor General has supported the review, emphasizing the need to resolve the circuit split and advocating for a ruling in favor of Bayer [3][4]. - The Durnell case resulted in a jury awarding $1.25 million in damages for failure to warn, with Monsanto appealing the verdict [6]. Litigation Status - As of October 15, 2025, Bayer has resolved approximately 132,000 of nearly 197,000 claims related to glyphosate, with a reserve of $7.6 billion set aside for ongoing litigation [10][9]. - Bayer has experienced a mix of outcomes in 28 concluded Roundup-related trials, securing favorable results in 17 cases [8]. Financial Performance - Bayer's shares have surged by 138.5% over the past year, significantly outperforming the industry average of 24.1%, driven by new drug approvals and improved performance in its Crop Science business [11]. - The company has seen strong sales from new products like prostate cancer drug Nubeqa and kidney disease drug Kerendia, which have offset declines in sales from Xarelto [12]. Drug Approvals - Bayer recently received FDA approval for elinzanetant for menopause-related symptoms and accelerated approval for Hyrnuo for lung cancer treatment, which are expected to enhance sales [15][16]. - The expansion of key drugs and the approval of additional products are anticipated to further boost sales in Bayer's pharmaceutical division [18].

Core Viewpoint - The US Supreme Court has agreed to hear Bayer's appeal to limit lawsuits claiming that its Roundup weedkiller causes cancer, which could potentially save the company billions in damages [1][2]. Group 1: Legal Proceedings - Bayer is appealing a Missouri Court of Appeals ruling that upheld a $1.25 million verdict awarded to a plaintiff diagnosed with non-Hodgkin's lymphoma after using Roundup [2][4]. - The company argues that federal law governing pesticides should preempt state law claims, as the Environmental Protection Agency (EPA) has not found evidence that Roundup increases cancer risk [7][14]. - Bayer is currently facing approximately 65,000 similar claims in state and federal courts related to Roundup [4][8]. Group 2: Financial Implications - Bayer shares rose nearly 5% following the announcement that the Supreme Court would hear the case [2][8]. - The company has already paid around $10 billion to settle most Roundup lawsuits pending as of 2020, but has not reached a settlement for future cases [11]. - A favorable ruling from the Supreme Court could significantly reduce the number of lawsuits Bayer faces, potentially saving the company billions in damages [1][9]. Group 3: Company Strategy - Bayer's CEO, Bill Anderson, stated that the court's decision is a crucial part of the company's strategy to manage ongoing litigation [3]. - The company has indicated that it may withdraw Roundup from the US market if litigation continues to escalate [15]. - Bayer acquired Roundup as part of its $63 billion purchase of Monsanto in 2018 and maintains that decades of studies support the safety of glyphosate, the active ingredient in Roundup [12][16].

Core Viewpoint - The U.S. Supreme Court has agreed to hear Bayer's request to significantly limit lawsuits alleging that its Roundup weedkiller causes cancer, which could potentially save the company billions of dollars in damages [1] Group 1 - Bayer is seeking to limit the legal claims against its Roundup product, which has faced numerous lawsuits related to cancer allegations [1] - The Supreme Court's decision to hear the case indicates a significant legal development that could impact Bayer's financial liabilities [1] - A favorable ruling for Bayer could lead to a reduction in the number of lawsuits and associated damages, benefiting the company's financial outlook [1]

Financial Data and Key Metrics Changes - The company's pre-tax profit grew from $5.4 billion in fiscal 2020 to over $10.8 billion in fiscal 2025, indicating a significant increase in profitability [12]. Business Line Data and Key Metrics Changes - The company has installed over 20 EV charging locations globally this year, reflecting its commitment to adapting to member needs [16]. - The company continues to rotate products based on member demand, as seen with the discontinuation of MyPillow due to declining sales [18]. Market Data and Key Metrics Changes - The company is actively pursuing new locations, with plans to open 30 new locations in the next year, indicating ongoing market expansion [25]. Company Strategy and Development Direction - The company is focused on balancing emissions reductions with business growth, emphasizing a practical approach to its climate action plan adopted in 2020 [12]. - The company is committed to enhancing its product offerings with a focus on clean ingredients, which is a top priority for its buyers [22]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to maintain profitability while pursuing growth and sustainability initiatives [12]. - The company is not currently planning to expand into South America or India, indicating a focused approach to market entry [31]. Other Important Information - The shareholder proposal regarding financial risks and costs of climate commitments was overwhelmingly rejected, with over 98% voting against it [14]. - The company has reformulated Roundup products to remove concerning chemicals while still meeting member demand [22]. Q&A Session All Questions and Answers Question: Has the company considered installing additional EV charging stations? - Yes, over 20 locations have been added this year, and the company will continue to monitor member needs for future installations [16]. Question: What happened to the My Pillow product? - MyPillow was discontinued due to declining sales, which is a common practice based on member demand [18]. Question: Are the company's Scope 3 reduction targets for suppliers voluntary or business imperatives? - Currently, there are no business imperatives related to Scope 3; all imperatives are related to Scope 1 and 2 [19]. Question: Is there any consideration for a stock split or special dividend this year? - Both stock splits and special dividends are regularly discussed with the board, but there is nothing to report at this time [20]. Question: Will Costco commit to removing Roundup products from its warehouses? - The company plans to continue selling Roundup as it meets member demand, but has reformulated it to remove glyphosate [21][22]. Question: What are the company's plans for entering new markets? - The company plans to open 30 new locations, with a third of those in new markets, indicating ongoing expansion efforts [25]. Question: Can you update on the progress of the company opening freestanding gas stations? - There are currently four freestanding gas stations in process, aimed at enhancing service near existing warehouses [27]. Question: How does the company plan to maintain its corporate culture with new executives? - The company is focused on teaching its culture to new hires, particularly in IT, to ensure alignment with corporate values [29].

Financial Data and Key Metrics Changes - The pre-tax profit grew from $5.4 billion in fiscal 2020 to over $10.8 billion in fiscal 2025, indicating a significant increase in profitability [12]. Business Line Data and Key Metrics Changes - No specific data on individual business lines was provided in the meeting, but the overall profitability and growth were emphasized [12]. Market Data and Key Metrics Changes - No specific market data or key metrics changes were discussed during the meeting [0]. Company Strategy and Development Direction - The company is focused on balancing emissions reductions with business growth, emphasizing a practical approach to sustainability that does not compromise profitability [12]. - Plans for expansion include opening 30 new locations, with a mix of infill markets and new international markets, indicating ongoing growth opportunities [21]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's climate action plan, stating it has not impaired profitability and has been well-received by members and shareholders [12]. - The company is committed to continuing its expansion efforts and addressing market demands, particularly in areas where they have received positive feedback from residents [19]. Other Important Information - The shareholder proposal regarding financial risks and costs of climate commitments was overwhelmingly rejected, with over 98% voting against it [14]. - The company is exploring the installation of additional EV charging stations and has already implemented over 20 locations globally [15]. Q&A Session All Questions and Answers Question: Has the company considered installing additional EV charging stations in its parking facilities? - Yes, the company has put in over 20 locations this year and will continue to monitor member needs for future installations [15]. Question: What happened to the My Pillow product? - MyPillow was discontinued due to declining sales, which is a common practice at Costco based on member demand [16]. Question: Are the company's Scope 3 reduction targets for suppliers the result of business imperatives or voluntary company initiatives? - Currently, there are no business imperatives related to Scope 3; all imperatives are related to Scope 1 and 2 [17]. Question: Is there any consideration for a stock split or special dividend this year? - Both stock splits and special dividends are regularly discussed with the board, but there is nothing to report at this time [17]. Question: Will Costco commit to removing Roundup products from its warehouses? - The company plans to continue selling Roundup, having reformulated it to remove glyphosate while maintaining effectiveness [18]. Question: What are Costco's newest offerings to address customer desires for healthier products? - The company is focused on a Clean Ingredient Index for all food and sundries departments, ensuring limited and healthy ingredients [18]. Question: What are the company's plans for entering new markets? - The company plans to open 30 new locations, with a third in new markets and ongoing international expansion [21]. Question: Can you update on the progress of the company opening freestanding gas stations? - There are currently four freestanding gas stations in process, aimed at enhancing parking and accessibility for existing warehouses [23]. Question: How does the company plan to maintain its corporate culture with new executives? - The company emphasizes teaching its culture to new hires, particularly in IT, to ensure alignment with corporate values [25].

Core Insights - Bayer has experienced a significant turnaround in 2025, with shares increasing by 121.6% over the past year, outperforming the industry gain of 19.2% and the S&P 500 Index [1][8]. Group 1: Performance and Market Position - Bayer's stock performance is attributed to new drug approvals, progress in its pipeline, improved Crop Science business performance, and positive updates on ongoing litigations [2]. - The company has outperformed the industry, sector, and S&P 500 Index, driven by FDA label expansions for drugs like Nubeqa and Kerendia, as well as approvals for Lynkuet and Hyrnuo [8]. - Nubeqa generated sales of €1.68 billion in the first nine months of 2025, compensating for the decline in Xarelto sales [9]. Group 2: Drug Approvals and Pipeline Progress - Bayer's pharmaceutical division is bolstered by new products such as Nubeqa and Kerendia, which have maintained strong momentum despite declining Xarelto sales [3]. - The FDA approved a label expansion for Kerendia, making it the only non-steroidal mineralocorticoid receptor antagonist approved in the U.S. for chronic kidney disease associated with type 2 diabetes and heart failure [4]. - Nubeqa received a label expansion for advanced prostate cancer, becoming the first FDA-approved androgen receptor inhibitor for hormone-sensitive prostate cancer [5][6]. - Bayer's pipeline includes promising candidates like gadoquatrane for MRI and asundexian for stroke prevention, with ongoing efforts to submit marketing authorization applications [13][14]. Group 3: Litigation and Financial Outlook - Bayer's stock received a boost from a favorable U.S. Supreme Court review signal regarding Roundup litigation, which has resulted in significant litigation costs [17][19]. - As of September 30, 2025, Bayer reserved $7.6 billion (€6.5 billion) for glyphosate litigation, with approximately 132,000 of nearly 197,000 claims resolved [19][20]. - From a valuation perspective, Bayer's shares trade at a price/earnings ratio of 7.59X forward earnings, below the industry average of 17X, indicating potential undervaluation [21]. - The Zacks Consensus Estimate for 2025 earnings per share has risen from $1.32 to $1.41, reflecting positive sentiment around the company's financial outlook [22].

RT Peter St Onge, Ph.D. (@profstonge)RFK: Monsanto created Celiac DiseaseBtw, here's a chart of glyphosate on wheat (i.e. Roundup) and celiac disease hospital discharges: https://t.co/cY5fqRTh0m ...

Core Insights - Bayer AG is a global pharmaceutical and life sciences company, trading under the symbol BAYRY on the OTC exchange, known for its healthcare products, agricultural chemicals, and biotechnology solutions [1] - Morgan Stanley upgraded Bayer's stock to an "Overweight" rating, reflecting a positive outlook as the stock price reached $9.82, a 12.10% increase with a change of $1.06 [1][2] - Bayer's stock has experienced significant fluctuations, with a high of $10.03 and a low of $4.79 over the past year, indicating substantial growth [2] - Recent stock performance is linked to legal developments regarding Bayer's Roundup weed killer, with the U.S. Solicitor General supporting Bayer's appeal to the Supreme Court concerning cancer risk warnings [2][3] - The Environmental Protection Agency and the Food and Drug Administration have not classified glyphosate, a chemical in Roundup, as carcinogenic, bolstering Bayer's legal position [2] - Legal backing could influence pending lawsuits against Bayer based on "failure-to-warn theories," positively affecting investor sentiment and stock performance [3] - Bayer's market capitalization is approximately $38.59 billion, indicating a strong industry presence, with a trading volume of 299,593 shares, reflecting active investor interest [3]

Market Performance - The U.S. stock market rebounded on December 2, 2025, with major indexes recovering from previous losses, driven by stabilizing bond yields and a recovery in cryptocurrency markets [1][2] - The S&P 500 rose 0.2% to close at 6,829.37, the Dow Jones Industrial Average increased by 0.4% to 47,474.46, and the Nasdaq Composite climbed 0.6% to 23,413.67 [2] - The rebound was broad-based, with information technology leading gains on the S&P 500, while the Energy Select Sector SPDR rose 0.9% [3] Company Highlights - Boeing (BA) surged 8% after its new CFO provided an optimistic forecast for cash production next year, indicating progress in ramping up production [4] - MongoDB (MDB) shares jumped 22.2% following stronger-than-expected third-quarter results and an improved outlook for its cloud database platform [5] - Nvidia (NVDA) advanced 1% after announcing an expanded partnership and a $2 billion investment in Synopsys (SNPS) [5] - Intel (INTC) saw a substantial rise of 6% [5] - United Natural Foods (UNFI) climbed 4.6% after reporting stronger-than-anticipated profits [7] Cryptocurrency Market - Bitcoin (BTC) recovered significantly, trading near $91,000 after a drop below $85,000 on Monday, which alleviated pressure on crypto-linked stocks [6] Economic Outlook - Investors are anticipating the Federal Reserve's FOMC meeting on December 9-10, 2025, with an 80-87.4% probability of a 25-basis-point interest rate cut [8] - Upcoming economic data releases include the November ADP employment report and the delayed September PCE Price Index, which is closely watched for inflation insights [9] - The Consumer Price Index (CPI) for November 2025 is projected to show a 0.32% month-over-month increase and a 2.99% year-over-year rise [9] Historical Trends - December is historically a strong month for markets, with the S&P 500 averaging over a 1% gain, supported by optimism around potential Fed rate cuts and enthusiasm for artificial intelligence [11]