SMG

It has been about a month since the last earnings report for Scotts Miracle-Gro (SMG). Shares have lost about 11.3% in that time frame, underperforming the S&P 500. Will the recent negative trend continue leading up to its next earnings release, or is Scotts due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts. Scotts Miracle-Gro reported third-quarter fiscal 2026 (ended June 27, 2026) adjusted earnings of $2.82 per share, up 7.6% year over year. The figure beat the Zacks Consensus Estimate of $2.53 by 11.5%, aided by stronger results from the Bonnie Plants joint venture and a lower tax rate. Net sales rose 1.1% year over year to $1.172 billion but marginally missed the consensus estimate of $1.174 billion by 0.2%. Adjusted gross margin contracted 100 basis points to 31.3% as higher freight and commodity costs tied to the Iran conflict weighed on profitability. U.S. Consumer sales were $1.03 billion, essentially flat compared with the year-ago quarter. It missed our estimate of $1.04 billion. Segment profit declined 2% to $229.8 million from $235.2 million, reflecting pressure from higher freight and commodity costs. Sales in the Other segment, which primarily includes the company’s Canadian consumer lawn-and-garden business, increased 8% to $139.2 million from $129.1 million. The figure beat our estimate of $131.5 million. Segment profit advanced 10% to $18.6 million. Cash and cash equivalents were $27.7 million as of June 27, 2026. Long-term debt declined to $1.84 billion from $2.14 billion a year ago. Scotts Miracle-Gro raised its fiscal 2026 adjusted earnings guidance from continuing operations to $4.30-$4.45 per share from the previous range of $4.15-$4.35. Management linked the increase to disciplined execution, margin management, balance-sheet progress and strategic investments in the company’s brands and operations. The company reaffirmed its expectation for low-single-digit growth in U.S. Consumer sales. It also maintained its forecast for an adjusted gross margin of at least 32% and mid-single-digit growth in adjusted EBITDA. Management continues to expect free cash flow of $275 million, which is projected to reduce the leverage ratio to the high-3-times range. Supply-chain automation, expanded use of artificial intelligence, manufacturing capital expenditures and purchasing efficiencies are expected to support year-over-year margin expansion despite recent cost pressures. Since the earnings release, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -11.56% due to these changes. At this time, Scotts has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock has a grade of B on the value side, putting it in the top 40% for this investment strategy. Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Scotts has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Scotts Miracle-Gro Company (SMG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Wednesday, July 29, 2026 at 8:15 a.m. ET Head of Investor Relations - Brad Chelton President and Chief Executive Officer - Nathan E. Baxter Chief Financial Officer and Chief Accounting Officer - Mark J. Scheiwer Operator: Good morning. Welcome to Scotts Miracle-Gro's third quarter 2026 earnings webcast. Brad Chelton: I am Brad Chelton, head of investor relations. Speaking today are President and CEO, Nate Baxter and chief financial officer and chief accounting officer, Mark J. Scheiwer. Nate will provide a strategic overview, and Mark will follow with a review of our financial results. In conjunction with our commentary today, please review our earnings release, 8-K filing, and supplemental financial presentation slides which were published on our website at investor.scotts.com prior to this webcast. During our review, we will make forward-looking statements and discuss certain non-GAAP financial measures. Please be aware that our actual results could differ materially from what we share today. Please refer to our Form 10-K filed with the SEC for details of the full range of risk factors that could impact our results. A live Q&A session will promptly follow the earnings video. To listen to the Q&A, simply remain on this webcast. To participate, please join by the audio link shared in our press release. As always, today's session will be recorded. An archived version will be published on our website. For further discussion after the call, please email or call me directly. With that, let's get started with Nate's update. Nathan E. Baxter: Good morning, everyone. I will start with how honored I am to lead Scotts Miracle-Gro at such a pivotal time for us. The CEO transition is moving smoothly, and I am fully committed to building upon our legacy to deliver greater shareholder value. I want to thank all of our associates for their hard work this season. The results speak for themselves. We have entered an exciting chapter. Our multiyear SMG 2.0 strategy is not just about adapting to the changing consumer and retail environment, it is about proactively shaping our future. We are driving a fundamental shift in how we innovate, how we engage with our consumers, and how we maximize digital and e-commerce platforms to unlock sustainable growth. In our last earnings call, I walked through the building blocks of SMG 2.0. Today, I will provide a progress report. Before heading down that road, I want to address 2 things. First, some of my priorities in my initial 90 days as CEO. And second, our performance in Q3, which gives us confidence to reaffirm our full year outlook. I will provide a high-level assessment, and let Mark cover the details. As for my priorities, top on the list is to optimize our organizational structure for SMG 2.0. This starts with the leadership team. I will not be backfilling the COO role. Instead, I am restructuring the management team to encourage faster decision making and maximize collaboration among all associates. I will be hiring a chief innovation officer and a chief information officer as we focus on increasing our investments in our brands, AI, automation, technology, and data analytics. In parallel, we are undertaking a rigorous assessment of our talent to ensure we have the right people in the right roles for where we are going and to create a strong pipeline of future leaders. Mark and I are also reevaluating the capital allocation strategy, including the previously announced financial targets, and share repurchase initiative. While the $1 billion increase in net sales and $1 billion in EBITDA remain the targets, our immediate focus is on quality earnings growth and margin expansion, which will naturally lead us to those long-term financial milestones on a consistent basis that might push achievement beyond 2030. Additionally, Mark and I are aligned to driving the leverage ratio below 3.12x. We will discuss in more detail our capital allocation strategy and share repurchase approach at next week's Investor Day. I encourage you to join us to learn more. Shifting to our financial performance. I am pleased with our Q3 results. We have delivered against all financial imperatives for fiscal 2026 and are on track for sales, gross margin expansion, EBITDA, and leverage reduction in addition to an increased EPS guidance Mark will address. Free cash flow is strong, contributing to debt paydown and setting us up for dividends and other shareholder-friendly actions. Our performance is anchored by 2 important drivers. First, margin discipline. While we have encountered commodity and freight headwinds this year, we have effectively protected our margin profile, and supported the earnings target. Second, balance sheet strength. We achieved a leverage ratio that is a meaningful improvement over prior year, demonstrating our commitment to strengthening our financial foundation. Consumer resilience remains an underlying story. Despite broader market volatility, the lawn and garden category continues to grow, and our SMG 2.0 building blocks are driving tangible results. We are capturing market share in targeted strategic areas, specifically in subcategories where we have introduced innovation in the lawns category driven by grass seed and fertilizer, and online with significant double-digit POS gains across our portfolio. Our ability to capitalize on this demand for our branded products validates our reinvigorated marketing approach to engage with consumers digitally and through deepened retail partnerships. We have even more opportunities to capture share in areas where we are underpenetrated. We will discuss these opportunities at our Investor Day. All of this points to our consumers who view lawn and garden as central to their lifestyle. According to our recent consumer research, 74% of respondents consider lawn and garden care a necessity, while 82% say the same for pest control. This strong consumer engagement in our categories bodes well for SMG 2.0 and is showing up in our progress on the building blocks. As a reminder, these are portfolio optimization through innovation and SKU rationalization, channel expansion through e-commerce and expanded retailer partnerships, category growth through greater household penetration and by reaching emerging consumers where they are and finally, operational efficiencies and savings through technology, automation, and AI investments. Let me walk through each of these, starting with the product portfolio. This year, we deliberately exited some of our lower margin commodity volume to aggressively expand our high-margin, high-growth branded portfolio. In doing so, we exited approximately $100 million of low-margin commodity mulch and soil sales, while staying disciplined to our margin targets. This shift is working. Branded product sales are up 4.5% year-to-date, and innovation introduced this fiscal year has contributed $75 million in gross sales. Prior to accounting for volume trade-offs with existing SKUs. Notable product introductions driving these gains include expansion of the Miracle-Gro organic line, modernization of the core Miracle-Gro portfolio, Scotts Kentucky 31 grass seed, Turf Builder Lawn Food, and Ortho Mosquito Kill and Prevent. In addition, our approach to launching innovation has changed with a focus on introducing products first through e-commerce to gain insights and build consumer demand, and then gaining shelf listings at our customers' brick-and-mortar stores. The impact of consistent and disciplined innovation cannot be overstated. Year-to-date through June, innovation launched in the last three years has accounted for $278 million in gross sales, again, prior to accounting for overlap with existing SKUs. On the SKU rationalization front, we are sunsetting low-margin products and favor of the highest margin SKUs and to make room for new higher margin innovation. We are about two-thirds to our goal, removing about 30% of our lowest performing SKUs by the close of fiscal 2027. This will further balance our portfolio and support margin growth. Channel expansion is a positive story. E-commerce continues to grow significantly every quarter and now represents 13% of our total POS dollars, 300 basis point improvement over last year. In retail outlets where we historically have been underpenetrated, we have expanded our presence through consumer activation programs, innovation, and product assortments that better fit their strategies and goals. This includes club, hardware, and rural farm and fleet, where POS growth among some retailers has risen double-digit percentages this year. To engage broader groups of consumers, we are doing more than bringing innovation grounded in organic, naturals, and sustainable packaging. We are meeting them where they are. This has led to a shift in the deployment of our media investments. Our fiscal 2026 media mix is now 80% digital, including social media, streaming, and online search, with 20% focused on traditional, such as linear TV and radio. Last year, 68% was digital and 32% traditional. On this note, our new Chief Brand Officer, Nick Mariettas, is now on board with a remit that includes household penetration growth across our-- I am excited for all the ways we are going to engage and educate consumers moving forward. We are making these investments while continuing to be good stewards of SG&A, working constantly to reallocate dollars to strategic high ROI initiatives. Finally, we continue to outperform with supply chain savings. Which are helping to offset geopolitical-driven commodity volatility while also contributing to gross margin expansion. By year-end, we will achieve a net savings of roughly 1% of sales. Much of this has been driven through capital investments to support SMG 2.0. Among our high ROI projects are transformational IT, automation, and upgrades to our growing media and fertilizer plants. When you look at our performance and where we are headed, it is clear we are making meaningful progress on SMG 2.0. We are on a path to drive sustainable growth and outsized value creation. what is most compelling is we are in a unique and strong position within a very special category. We have momentum and are committed to moving with greater speed and precision. We are more focused, more disciplined, and more energized than ever to deliver for our shareholders and the millions of consumers who rely on us for success with their own lawns and gardens. I believe it is an exciting time to be part of Scotts Miracle-Gro, and I appreciate your support. Thank you. Here's Mark with the financial details. Mark J. Scheiwer: Thank you, and hello, everyone. Nate provided an excellent overview of our performance and how we continue to drive SMG 2.0. We remain disciplined in the execution of our plans, we are consistently meeting or exceeding our financial targets this fiscal year. Before I get into the numbers, I will echo Nate's comments about the transition which has been seamless. This is a testament to the succession plan that was put in place by the Board of Directors, Nate has been highly engaged in all aspects of our lawn and garden business, well before taking on the CEO role. And he has forged strong relationships with our retailers, suppliers, partners, investors, banks, and associates. There is an energy and collaborative spirit among the leadership team. We are all aligned to SMG 2.0. This also extends to our future capital allocation strategy and share repurchase plan. As Nate noted, we are committed to a balanced capital allocation strategy, including an updated long-term financial model in which we will be less focused on achieving our SMG 2.0 growth targets by established dates in favor of a consistent trajectory of progress towards those growth goals on an annual basis. We will discuss this in detail at our Investor Day next week at the New York Stock Exchange. Now for the deeper financial dive. In the third quarter, total company net sales increased 1% to $1.17 billion. Year-to-date, total company net sales increased 2% to $2.99 billion. These results mirrored our performance in our U.S. Consumer business. Where total net sales also increased 2% year-to-date, to $2.74 billion. This tracks to our full year net sales guidance of low-single-digit growth. In our U.S. consumer business. We are also delivering on our mixed strategy, in which we put a stronger emphasis on higher margin branded products. Sales of branded products through the nine months contributed 4.5% to current year growth. Which was partially offset by expected declines in nonbranded product sales including mulch. This continued a trend of higher branded product sales in each of our three quarters this year. The branded sales growth has occurred across all product categories, the strongest performance in our Ortho control products, up 15%, Scotts grass seed, up 11%, and soils up 7%. Year-to-date, total POS dollars and units were plus 1.4% and 2.3% respectively, closely aligning with our net sales growth. This POS data includes our largest strategic customers e-commerce, and only branded products, excluding mulch, private label, and commodity items. From a POS perspective, the strongest performers were in Ortho, Roundup, and soil product lines. E-commerce channel expansion continues to be the growth opportunity we expected. Year-to-date, e-com POS dollars were up 27%, growth in every category and across every customer. We did experience POS softness in early May due to unfavorable weather in some regions, but consumer sell-through strengthened during Memorial Day weekend and carried over into June, further demonstrating continued consumer engagement in our category. As a result of the POS softness. Entering Q4, retailer inventories were slightly elevated over prior year, by high-single-digit percentages. While retailers intend to focus on joint consumer activation programs for late summer, and early fall to drive sell-through. We do expect a slowdown in the fourth quarter purchasing activity. This will most likely push our current year U.S. Consumer sales growth to the lower end of our sales guide. Moving to gross margin, our expansion remains on track. Year-to-date, the GAAP gross margin rate was 35.7%, a 130 basis point improvement over prior year. And the non-GAAP gross margin rate was 35.8% versus 34.7% a year ago. Favorable mix from higher margin branded product sales supply chain savings, and pricing actions contributed positively to this gross margin improvement. For the quarter, the GAAP gross margin rate was 31.2% versus 32.1% in the prior year. While the non-GAAP rate was 31.3% compared with 32.3% in the prior year. The gross margin was impacted in the quarter by higher freight commodity costs. We explained earlier this year that we would have to manage commodity headwinds from the Iran war, as most cost of goods sold were locked, given we had already purchased or produced a significant portion through the first half of our fiscal year. We also effectively hedged our remaining cost of goods as part of our contingency planning. For the full year, we expect a $15 million increase in commodity costs above our initial plan. For the year, with most of this being recognized during this quarter. Looking ahead, we do not expect any further commodity impacts through the end of our fiscal year, as nearly all of our cost of goods are locked. In addition, as part of our fiscal 2027 planning, we expect to take pricing actions and continue to deliver on cost-out initiatives to drive continued gross margin improvement. I will now move further down our P&L, starting with SG&A. For the quarter, SG&A increased slightly from $145 million in fiscal 2025 to $145.6 million this year. Year-to-date, SG&A increased 3% to $450.7 million from $436.2 million. This increase was expected and reflects our increased media and marketing spend to drive incremental brand awareness and consumer takeaway. SG&A spend is on track to our full year target of around 17% to 18% of sales. Looking at non-GAAP adjusted EBITDA for the quarter, was $246.3 million versus $253.5 million a year ago. This decline was attributable to the impact of higher freight, and commodity costs in the quarter. Year-to-date, non-GAAP adjusted EBITDA was $686.6 million, a $31 million or 5% improvement over $655.9 million in the corresponding period. Below the line, interest expense declined from lower debt balances and interest rates. For the quarter, interest expense was $28 million compared with $31.8 million in fiscal 2025. Year-to-date, interest expense was $86.5 million versus $102.2 million in fiscal 2025. Leverage as of the third quarter was 3.78x, compared with 4.15x a year ago. An improvement of approximately 0.4x. This was the result of higher EBITDA and continued deployment of free cash flow to debt reduction. For the full year, we continue to drive improvement in the bottom line. GAAP net income from continuing operations was $319.1 million or $5.40 per share. Compared with $309.4 million or $5.28 per share a year ago. And non-GAAP adjusted net income from continuing operations was $390.2 million or $6.60 per share. versus $336.9 million or $5.75 per share in the prior year. For the quarter, GAAP net income from continuing operations was $103.6 million or $1.75 per share compared with $154.7 million or $2.64 per share a year ago. These GAAP results included impairment, restructuring, and other nonrecurring items of $64 million for the quarter primarily comprised of executive severance charges and noncash impairments of noncore passive investments. Excluding these items, non-GAAP adjusted net income from continuing operations in the quarter was $166.9 million or $2.82 per share versus $153.4 million or $2.62 per share last year. Looking ahead to fiscal 2027, we will continue to focus on executing SMG 2.0 and managing the potential impact of commodities from the Iran war through a combination of sourcing contingencies, hedging strategies, and pricing actions which we are currently under discussion with our retail partners. You can expect us to continue to invest in our superpowers and advance innovation and other growth initiatives while driving supply chain savings through automation, AI, and other efficiencies. We have stated this many times this year, Overall, we are pleased with our performance and are once again reaffirming our 2026 guidance. With one upward revision. Around non-GAAP adjusted EPS from continuing operations. We now expect non-GAAP adjusted EPS from continuing operations of $4.30 to $4.45 per share. Up from a prior range of $4.15 to $4.35 per share. This increase in our earnings guidance range is reflective of the hard work efforts of our associates. Over the course of this fiscal year and I want to personally thank them for their diligence. I encourage you to join our Investor Day to learn more about 2.0, our capital allocation strategy, and other initiatives aimed at driving greater value and shareholder returns. The executive and senior leadership teams will be presenting and will be available for Q&A during the event. Here's the operator. Operator: To ask a question, you will need to press *1 on your telephone. To remove yourself from the queue, you may press *1 again. Please limit yourself to one question and one follow-up to allow everyone the opportunity to participate. Please stand by while we compile the Q&A roster. Our first question comes from the line of Jon Andersen with William Blair. Your line is open, Jon. Jon Andersen: Yeah. Thank you very much. Congratulations, Nate, on the new role, and good luck going forward. Two quick questions. First, I wanted to get a sense for, there is some commentary around kind of retail inventory being a bit elevated. If you could talk about kind of some of your assumptions around where those land exiting the fiscal year? And any programming that you are engaging with retailers on to help, you know, achieve that. And then it sounds like you are at least going through a kind of a reassessment or a relook at the capital allocation strategy going forward or priorities if you could I do not know if you can preview any of your thinking around that or if it is you know, if it is if it is too early. But those would both be super helpful. And yeah, I will leave it at that. Thank you. Nathan E. Baxter: Okay. Well, thanks, Jon. Good to hear from you. Let me tackle the inventory one, and then I will let Mark comment on the capital allocation, although I think the in-depth discussion will happen next week on that one. Yeah. So, you know, let's start with April, May was a little slow weather-wise. June, actually, one of our best Junes ever, broke records. But as a result of that, we are sort of forecasting for Q4 to be at the lower end, because we are anticipating retailer inventories being slightly higher than they were last year. Now with that said, you know, with the weather pattern setting up, we could have an outstanding fall. We are already seeing really strong control sales continue through the early part of Q4 here. So we are just being conservative in how we forecast that just to make sure we are accurate with where we think we will end the year. Mark, any color you wanna add to that? Mark J. Scheiwer: No. I would say it is the team's working hard with the customers to bring down their inventories, and I think we are in good shape as we land for the year. Then looking out to 2027, we have got great programs. The team's working on for our sales growth next year, so I do not I do not foresee this being a massive impediment to that. Looking at capital allocation, Jon, you heard us speak a little bit about a balanced capital allocation when we have been out, talking to investors and on these calls. And we will continue that discussion. We will continue to have our quarterly dividend be a focus of our strategy. A lot of how we have navigated this year has been about reinvestment in the business. And we will continue to invest in our business both in advertising, R&D, and through our CapEx activities to drive cost-out. Those will be a big part of that. Earlier in the year, we announced an authorization for a share repurchase program that we are excited to start as well. In the near term, it will be a measured approach, like Jim and I had spoken about on the past several calls. Leverage, we will be very mindful of, so I do not think you will see any big changes. On that front, but we will dip our toe into it, and we will provide you more color next week. Jon Andersen: Great. Thanks so much. Looking forward to it. Thanks, Jon. Operator: Thank you. Our next question comes from the line of Jonathan Matuszewski with Jefferies. Your line is open, Jon. Jonathan Matuszewski: Great. Good morning, and thanks for taking my two questions. The first one was just on pace of product innovation. You talked about directly launching products ahead with consumers prior to wholesale shelf listings. Just asking if you could kind of dimensionalize for us how that actually impacts your slated pacing of maybe annual product launches over the next few years, versus maybe what you were able to do in the past? That is my first question. Thanks. Nathan E. Baxter: So hey, Jon. Good question. Yeah. I mean, innovation is absolutely one of the building blocks of sort of our strategy moving forward. I think what you will see is us introduce new products to the market at a faster rate. We will do it digitally. And I think I have talked about this openly before. there are some distinct advantages there. One is we get to test the market. And two is we get to be pretty measured about, you know, the build around new innovation. We did it last year with that mosquito kill and prevent. You know, we were we were proud that we had launched them on TikTok. While the numbers were not huge, the fact that the demand drove, a lot of out-of-stock on that, I think, just was a really interesting way for us to learn about consumer engagement. And, you know, we have gained a tremendous amount of retail brick-and-mortar distribution this year. So if anything, that should allow us to speed up innovation as opposed to the old days where we waited for line reviews for brick-and-mortar. And, again, I will emphasize all of our retailers are excited on the e-com piece. You know, as you heard in the prepared remarks, we have driven some meaningful expansion. In all of our e-com channels. So, I think that is a good indicator that we have got a winning formula in terms of how we bring new innovation to market. Jonathan Matuszewski: Right. That is helpful. And then just to follow-up on sourcing and raw materials. I think historically, you have tried to maybe lock in half of some of your key inputs by the end of the fiscal year for the following year. And so just in light of kind of the conflict in Iran and volatility, can you give us a sense of where you are planning to be as you exit this fiscal year at the end of September? Thanks. Mark J. Scheiwer: Yeah. Absolutely. It is obviously been a volatile market. I would say we are gonna be slightly ahead of where we have been historically. We have taken advantage of some of the dips to hedge on urea. But as you know, diesel costs are up and freight distribution costs are up. So we will be ahead of where we typically are, and we will talk more about it in Q4. Thank you. Operator: Thank you. Our next question comes from the line of Joseph Altobello with Raymond James. Your line is open, Joseph. Joseph Altobello: Talk about pricing for a second. I am just curious first, how much do you expect pricing to add to sales growth in fiscal 2027? I know discussions are going on, they are probably fluid. And secondly, are you getting more than your typical amount of pushback from retailers on that pricing discussion? Nathan E. Baxter: Let me attack that just by saying, you know, we are in the middle of discussions with retailers. I think no retailer ever likes you to come with pricing. I would not say it is any more than typical. I think, you know, retailers are eyes wide open on the current environment. It affects them as well. I think we will have a lot more to talk about in Q4 on that front. But, rest assured that, you know, combination of pricing and our cost-out is gonna deliver the margin growth that we have committed to. So we are firm on that. Joseph Altobello: Okay. And just to follow-up on that. Back in 2024, I guess, it was when you had your last Investor Day, we talked about getting to 3% sales growth consistent, 3% sales growth. How long do you think it will take to achieve that number? Nathan E. Baxter: Yeah. I mean, I look at 2024. That was the year we grew 6% and, you know, we are at low single digits for 2025 and, obviously, obviously, projecting to sort of land there for 2026. I think we will start to see rebound towards that algorithm in 2027, not only the pricing, but also some of the innovation we are bringing to market and some of the programs that we are gonna have with our retailers. So we will we will get deep into that algorithm and sort of the longer term look, next week at the Investor Day for sure. Mark J. Scheiwer: And, Joe, if I could just highlight, we recently announced a partnership with Black Kow and that should also add to top line growth for next year. So we have got some momentum there as Nate has alluded to for 2027. Joseph Altobello: Got it. Great. Good luck, Nate, and I will see you guys next week. Thanks. Joe. Operator: Thank you. Once again, to ask a question, please press. Our next question comes from the line of William Reuter with Bank of America. Your line is open, William. William Reuter: Good morning. On that last question about the outlook for cost and pricing next year. At the end, you know, you mentioned I think, Mark, that the pricing cost savings will deliver on your gross margin goals. Does that mean that you expect that in fiscal year 2027, your pricing actions and cost savings will allow for gross margins to at least be sustained or grow? Mark J. Scheiwer: That is correct, Bill. We would expect our gross margin expansion next year. So it is a combination of pricing activities, and cost-out initiatives. And even our innovation that Nate spoke to earlier on the call here, those also have a gross margin benefit to us. And then as we continue to further deemphasize things that are a commodity in nature within our portfolio and more focused on brand. We would expect mix to play into that as well. So a combination of all those items, should deliver gross margin expansion. We will touch upon it at the Investor Day in more detail, a lot of those levers. But our expectation as we have been doing our planning so far this summer, is that we do expect to have gross margin expansion again next year and beyond. William Reuter: Got it. And then one follow-up. You mentioned that you have been relatively able to lock in urea prices at opportunistic moments. Can you give any range of what types of inflation we might expect for next year in terms of your cost basket? Mark J. Scheiwer: Yeah. I would just say, you have seen some of the costs that have been incurred so far in our P&L year-to-date. I think we are navigating a lot of those same costs. it is I think it is still a little too early to tell. You know, we are discussing it with the customers as we speak. And we are making plans on cost-out initiatives. So there is a there is a lot in motion there. But I would say as you look at some of the costs that we incurred this quarter, you can use those as maybe a backdrop for next year. William Reuter: Great. That is all for me. Thank you. Operator: Thank you. I would now like to turn the conference back to Brad Chelton for closing remarks. Sir? Brad Chelton: Yes. As we wrap up, one last reminder that we will hold our 2026 Investor Day next Tuesday, August 4, at the New York Stock Exchange beginning at 9:00 a.m. Many of you have RSVP'd for the event, but if you have not done so, you can send an email to [email protected]. The event will also be available via livestream. And we will issue a press release tomorrow with additional details. With that, operator, you can end the call. Operator: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect. Before you buy stock in Scotts Miracle-Gro, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Scotts Miracle-Gro wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,405!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,344,091!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 7, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends Scotts Miracle-Gro. The Motley Fool has a disclosure policy. Scotts Miracle-Gro (SMG) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

The Scotts Miracle-Gro Company SMG reported third-quarter fiscal 2026 (ended June 27, 2026) adjusted earnings of $2.82 per share, up 7.6% year over year. The figure beat the Zacks Consensus Estimate of $2.53 by 11.5%, aided by stronger results from the Bonnie Plants joint venture and a lower tax rate. Net sales rose 1.1% year over year to $1.172 billion but marginally missed the consensus estimate of $1.174 billion by 0.2%. Adjusted gross margin contracted 100 basis points to 31.3% as higher freight and commodity costs tied to the Iran conflict weighed on profitability. The Scotts Miracle-Gro Company price-consensus-eps-surprise-chart | The Scotts Miracle-Gro Company Quote U.S. Consumer sales were $1.03 billion, essentially flat compared with the year-ago quarter. It missed our estimate of $1.04 billion. Segment profit declined 2% to $229.8 million from $235.2 million, reflecting pressure from higher freight and commodity costs. Hawthorne was classified as a discontinued operation after the company determined in the first quarter of fiscal 2026 that the business met the held-for-sale criteria. ScottsMiracle-Gro completed the divestiture of Hawthorne on April 8, 2026. Hawthorne was removed from reportable segment results, and prior-period continuing operations were reclassified. Sales in the Other segment, which primarily includes the company’s Canadian consumer lawn-and-garden business, increased 8% to $139.2 million from $129.1 million. The figure beat our estimate of $131.5 million. Segment profit advanced 10% to $18.6 million. Cash and cash equivalents were $27.7 million as of June 27, 2026. Long-term debt declined to $1.84 billion from $2.14 billion a year ago. Scotts Miracle-Gro raised its fiscal 2026 adjusted earnings guidance from continuing operations to $4.30-$4.45 per share from the previous range of $4.15-$4.35. Management linked the increase to disciplined execution, margin management, balance-sheet progress and strategic investments in the company’s brands and operations. The company reaffirmed its expectation for low-single-digit growth in U.S. Consumer sales. It also maintained its forecast for an adjusted gross margin of at least 32% and mid-single-digit growth in adjusted EBITDA. Management continues to expect free cash flow of $275 million, which is projected to reduce the leverage ratio to the high-3-times range. Supply-chain automation, expanded use of artificial intelligence, manufacturing capital expenditures and purchasing efficiencies are expected to support year-over-year margin expansion despite recent cost pressures. SMG’s shares have gained 11.1% in the past year compared with a 5.3% rise in the industry. Image Source: Zacks Investment Research SMG currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the basic materials space are Neo Performance Materials Inc. NOPMF, Kronos Worldwide, Inc. KRO and Avient Corporation AVNT. Neo Performance is slated to report second-quarter 2026 results on Aug. 11. The Zacks Consensus Estimate for earnings is pegged at $1.48 per share. NOPMF sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here. Kronos is scheduled to report second-quarter 2026 results on Aug. 5. The Zacks Consensus Estimate for KRO’s second-quarter loss per share is pegged at 33 cents, indicating 65.63% year-over-year growth. KRO also flaunts a Zacks Rank #2 (Buy) at present. Avient is slated to report second-quarter 2026 results on Aug. 6. The consensus estimate for AVNT’s earnings per share is pegged at $3.08. AVNT presently carries a Zacks Rank #2. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Scotts Miracle-Gro Company (SMG) : Free Stock Analysis Report Kronos Worldwide Inc (KRO) : Free Stock Analysis Report Avient Corporation (AVNT) : Free Stock Analysis Report Neo Performance Materials Inc. (NOPMF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in The Scotts Miracle-Gro Company? Here are five stocks we like better. Scotts Miracle-Gro reported modest growth, with fiscal Q3 net sales up 1% year over year to $1.17 billion. Branded products, innovation and e-commerce growth offset declines in low-margin commodity mulch and soil sales. Adjusted Q3 EPS rose to $2.82 from $2.62, despite lower adjusted EBITDA caused by higher freight and commodity costs. The company raised its fiscal 2026 adjusted EPS outlook to $4.30–$4.45. Management is prioritizing margin expansion and debt reduction under its “SMG 2.0” strategy, with leverage improving to 3.78 times from 4.15 times a year earlier. Retailer inventories remain elevated, potentially pushing fourth-quarter consumer sales growth toward the low end of guidance. Why Analysts Still Predict Double-Digit Upside for Mosaic Stock Scotts Miracle-Gro (NYSE:SMG) reported third-quarter fiscal 2026 net sales of $1.17 billion, up 1% from a year earlier, while reaffirming its full-year outlook and raising its adjusted earnings-per-share guidance. The company said its results reflected growth in branded products, e-commerce expansion and supply-chain savings, partly offset by higher freight and commodity costs. President and CEO Nate Baxter, who recently assumed the chief executive role, said the leadership transition has been smooth and that the company is progressing on its multiyear “SMG 2.0” strategy. The plan focuses on product innovation, SKU rationalization, digital and e-commerce expansion, consumer engagement, and operational efficiencies through technology, automation and artificial intelligence. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now ScottsMiracle-Gro Stock Blooms After Investor Day Optimism “Our immediate focus is on quality earnings growth and margin expansion,” Baxter said. While Scotts Miracle-Gro continues to target a $1 billion increase in net sales and $1 billion in EBITDA, he said achieving those long-term objectives consistently could push their timing beyond 2030. For the first nine months of fiscal 2026, total company net sales rose 2% to $2.99 billion. U.S. consumer segment sales also increased 2% to $2.74 billion, a result CFO and Chief Accounting Officer Mark Scheiwer said was consistent with the company’s full-year expectation for low-single-digit sales growth in that business. → 3 Value ETFs to Consider as Growth Stocks Lag Behind CF Industries stock leaves competitors in the dust Branded product sales increased 4.5% year to date, helping offset expected declines in non-branded sales, including commodity mulch. Scotts Miracle-Gro deliberately exited about $100 million in low-margin commodity mulch and soil sales as part of its shift toward higher-margin branded products, Baxter said. The company cited particular strength in Ortho control products, with sales up 15% year to date; Scotts grass seed, up 11%; and soils, up 7%. Innovation introduced during fiscal 2026 contributed $75 million in gross sales before accounting for volume trade-offs with existing products, according to Baxter. Product launches included additions to Miracle-Gro Organics, modernization of the core Miracle-Gro portfolio, Scotts Kentucky 31 Grass Seed Mix, Scotts Turf Builder Lawn Food, and Ortho Home Defense Mosquito Kill and Prevent. → 5 AI Stocks Are Pulling Back—Which Growth Catalysts Still Look Strongest? Scotts Miracle-Gro said innovation launched over the past three years generated $278 million in year-to-date gross sales through June, before overlap with existing SKUs. The company is also working toward removing roughly 30% of its lowest-performing SKUs by the end of fiscal 2027 and said it is about two-thirds of the way to that target. E-commerce point-of-sale dollars rose 27% year to date across every category and customer. E-commerce now accounts for 13% of total POS dollars, up 300 basis points from the prior year, according to Baxter. The company has also expanded distribution and activation programs with club, hardware, and rural farm-and-fleet retailers, where some retailers recorded double-digit POS growth. Year-to-date GAAP gross margin increased 130 basis points to 35.7%. On a non-GAAP basis, gross margin was 35.8%, compared with 34.7% in the prior-year period. Scheiwer attributed the improvement to favorable product mix, supply-chain savings and pricing actions. Third-quarter gross margin, however, declined as higher freight and commodity costs weighed on results. Quarterly GAAP gross margin was 31.2%, compared with 32.1% a year earlier, while non-GAAP gross margin was 31.3%, compared with 32.3%. Scotts Miracle-Gro expects a $15 million increase in commodity costs above its initial full-year plan, with most of that impact recognized in the third quarter. Scheiwer said nearly all of the company’s remaining fiscal 2026 cost of goods is locked, and it does not expect further commodity impacts during the remainder of the fiscal year. For fiscal 2027, management said it expects to pursue pricing actions, cost-reduction initiatives, innovation and continued product-mix improvements to support gross-margin expansion. Baxter said retailer conversations on pricing are ongoing, while Scheiwer said the company expects margin expansion next year and beyond. Retailer inventories were up high-single-digit percentages from the prior year following soft POS in early May due to weather conditions. Memorial Day weekend and June sales strengthened, with Baxter describing June as one of the company’s best on record. Still, management expects lower fourth-quarter purchasing activity as retailers work to reduce inventories, which could place U.S. consumer sales growth toward the lower end of its guidance range. Third-quarter adjusted EBITDA was $246.3 million, down from $253.5 million a year ago, primarily due to higher freight and commodity costs. Year-to-date adjusted EBITDA increased 5%, or $31 million, to $686.6 million. GAAP net income from continuing operations for the quarter was $103.6 million, or $1.75 per share, compared with $154.7 million, or $2.64 per share, in the prior-year quarter. The result included $64 million of impairment, restructuring and other non-recurring items, primarily executive severance charges and non-cash impairments of non-core passive investments. Excluding those items, third-quarter adjusted net income from continuing operations was $166.9 million, or $2.82 per share, compared with $153.4 million, or $2.62 per share, a year earlier. For the first nine months, adjusted net income was $390.2 million, or $6.60 per share, compared with $336.9 million, or $5.75 per share, in the prior-year period. The company raised its fiscal 2026 adjusted EPS guidance from continuing operations to a range of $4.30 to $4.45, from its prior range of $4.15 to $4.35. Interest expense fell to $28 million in the quarter from $31.8 million a year earlier, reflecting lower debt balances and interest rates. Leverage improved to 3.78 times at the end of the third quarter, compared with 4.15 times a year earlier. Baxter said management is aligned on reducing the leverage ratio below 3.5 times. Management said it will provide more details on its capital-allocation strategy, long-term financial model and share-repurchase approach at its Investor Day. Scheiwer said the company intends to maintain a balanced allocation strategy that includes dividends, reinvestment in advertising, research and development, capital expenditures, debt reduction and a measured start to its authorized share-repurchase program. Scotts Miracle-Gro Company is a leading developer, manufacturer and distributor of consumer lawn and garden products. The firm serves both retail and professional customers through an array of branded offerings that include lawn fertilizers, grass seed, pest and disease control solutions, plant foods and specialty products for indoor and outdoor gardening. Its portfolio spans well-known names such as Scotts®, Miracle-Gro®, Ortho® and various hydroponic and specialty garden brands. Headquartered in Marysville, Ohio, the company traces its roots to O.M. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Scotts Miracle-Gro Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

This article first appeared on GuruFocus. Total Company Net Sales: Increased 1% to $1.17 billion in Q3; year-to-date increased 2% to $2.99 billion. US Consumer Business Net Sales: Increased 2% year-to-date to $2.74 billion. Branded Product Sales Growth: Up 4.5% year-to-date. Gross Margin Rate: Year-to-date GAAP gross margin rate at 35.7%, a 130 basis point improvement; non-GAAP rate at 35.8%. SG&A Expenses: Increased 3% year-to-date to $450.7 million. Non-GAAP Adjusted EBITDA: $246.3 million for the quarter; $686.6 million year-to-date, a 5% improvement. Interest Expense: $28 million for the quarter; $86.5 million year-to-date, down from $102.2 million in the prior year. Leverage Ratio: Improved to 3.78 times from 4.15 times a year ago. GAAP Net Income from Continuing Operations: $319.1 million year-to-date or $5.40 per share. Non-GAAP Adjusted Net Income from Continuing Operations: $390.2 million year-to-date or $6.60 per share. Non-GAAP Adjusted EPS Guidance: Revised to $4.30 to $4.45 per share, up from $4.15 to $4.35 per share. Warning! GuruFocus has detected 7 Warning Signs with SMG. Is SMG fairly valued? Test your thesis with our free DCF calculator. Release Date: July 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. The Scotts Miracle Gro Co (NYSE:SMG) reported a 1% increase in total company net sales for the third quarter, with year-to-date sales up 2%. The company's SMG 2.0 strategy is driving innovation and digital engagement, contributing to a 4.5% increase in branded product sales year-to-date. E-commerce sales have grown significantly, now representing 13% of total POS dollars, a 300 basis point improvement over the previous year. The company has achieved a leverage ratio improvement, reducing it to 3.78 times from 4.15 times a year ago, demonstrating financial strength. The Scotts Miracle Gro Co (NYSE:SMG) has reaffirmed its fiscal '26 guidance and increased its non-GAAP adjusted EPS guidance, reflecting strong performance and effective cost management. Retailer inventories are slightly elevated, which may impact fourth-quarter sales growth, pushing it to the lower end of the company's guidance. The company faced higher freight and commodity costs, impacting gross margins in the third quarter. Despite strong sales growth, the company experienced a decline in non-GAAP adjusted EBITDA for the quarter due to increased costs. The geopolitical situation, specifically the Iran War, has led to a $15 million increase in commodity costs above initial plans for the year. The company is undergoing a restructuring process, including not backfilling the COO role, which may pose challenges in management and decision-making. Q: Can you discuss the elevated retail inventories and your assumptions for the fiscal year-end? Also, any insights on your capital allocation strategy? A: Nathan Baxter, CEO, explained that due to slow weather in April and May, retailer inventories are slightly higher. However, June was a record month, and they are conservatively forecasting Q4 to be at the lower end. Mark Scheiwer, CFO, added that they are working with customers to manage inventories and have strong sales programs for next year. Regarding capital allocation, they focus on balanced strategies, including dividends, reinvestment in the business, and a measured approach to share repurchases. Q: How does launching products directly to consumers before wholesale shelf listings impact your product launch pace? A: Nathan Baxter, CEO, stated that this approach allows faster market introduction and inventory management. It enables testing consumer engagement digitally before gaining retail distribution. This strategy has proven successful, as seen with the Mosquito Kill & Prevent product, and will likely accelerate innovation. Q: With the conflict in Iran and commodity volatility, how are you managing sourcing and raw materials? A: Nathan Baxter, CEO, mentioned they are slightly ahead in hedging key inputs like urea, despite increased diesel and freight costs. They have taken advantage of market dips to secure favorable pricing and will provide more details in Q4. Q: What is your expectation for pricing's contribution to sales growth in fiscal '27, and are retailers pushing back on pricing discussions? A: Nathan Baxter, CEO, noted that while retailers typically resist price increases, they understand the current environment. Pricing and cost-out initiatives are expected to drive margin growth, and more details will be shared in Q4. Q: Do you expect pricing actions and cost savings to sustain or grow gross margins in fiscal '27? A: Mark Scheiwer, CFO, confirmed that they anticipate gross margin expansion next year through pricing, cost-out initiatives, and innovation. They are focusing on higher-margin branded products and de-emphasizing commodity items to achieve this. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Bunge Global SA BG reported second-quarter 2026 adjusted earnings of $2.00 per share, up 52.7% year over year. The figure missed the Zacks Consensus Estimate of $2.03 by 1.5%. Including one-time items, the company posted earnings per share of $3.47 compared with $2.61 in the year-ago quarter. Net sales surged 88.3% to $24.04 billion and beat the consensus mark of $23.49 billion by 2.3%. Sales and volumes increased across all segments. Bunge Global SA price-consensus-eps-surprise-chart | Bunge Global SA Quote Cost of goods sold increased 85.9% year over year to $22.36 billion. Gross profit more than doubled to $1.68 billion from $738 million, while gross margin expanded to 7.0% from 5.8%. Selling, general and administrative expenses rose 45% to $606 million, reflecting the larger combined company. Adjusted total EBIT was $665 million, up from $293 million, and the corresponding margin improved to 2.8% from 2.3%. Soybeans processed volumes increased to 11,524 thousand metric tons from 9,304 thousand metric tons. Volumes increased in both South and North America as well as in Europe, with the largest increase driven by the company’s greater production capacity in Argentina. Merchandised volumes nearly doubled to 8,046 thousand metric tons, reflecting the combined company’s expanded soybean origination footprint. Soybean Processing and Refining sales climbed 55.8% year over year to $12.07 billion. Adjusted segment EBIT advanced 46.4% to $445 million. Stronger results in North and South America drove the improvement. Processed volumes increased 79.3% to 3,490 thousand metric tons, reflecting added production capacity in Argentina, Canada and Europe. Merchandised volumes soared to 1,296 thousand metric tons from 15 thousand metric tons in the year-ago quarter. Softseed Processing and Refining sales jumped 167.5% to $4.1 billion.  Adjusted segment EBIT rose to $255 million from $14 million. Results improved across all regions on a more favorable market environment and solid execution. Processing gains in North America and Argentina were the main drivers, while stronger European processing more than offset lower refining and biodiesel performance. Tropical Oils and Specialty Ingredients sales increased 9.3% to $1.26 billion. Volumes increased 6% to 660 thousand metric tons. Adjusted segment EBIT rose to $29 million from $26 million in the year-ago quarter, as gains in Europe and Asia and slightly better global tropical oils merchandising outweighed weaker North American results. Grain Merchandising and Milling sales surged 183.4% to $6.61 billion, with volumes up 184.6% to 23,852 thousand metric tons. Higher volumes primarily reflected the company’s expanded grain-handling footprint and capabilities. Adjusted segment EBIT increased to $67 million from $29 million. Higher ocean freight, commercial services, global cotton and wheat milling results were partly offset by weakness in global grain merchandising and sugar. Cash used for operating activities totaled $1.13 billion in the first six months of 2026 compared with an outflow of $1.36 billion in the comparable period last year. The reduction was attributed to higher net income and depreciation following the Viterra transaction. Adjusted funds from operations climbed 86.3% to $1.29 billion. Bunge raised its full-year 2026 adjusted earnings guidance to $9.25-$9.75 per share from $9.00-$9.50. The company now expects higher Soybean Processing and Refining results and slightly higher Softseed Processing and Refining performance, while lowering its view for Grain Merchandising and Milling. The company maintained expectations for an adjusted tax rate of 22-26%, net interest expense of $620-$660 million and capital expenditures of $1.5-$1.7 billion. Depreciation and amortization is projected at approximately $975 million. Shares of Bunge have gained 53.8% in a year compared with the industry's 31.9% growth. Image Source: Zacks Investment Research Bunge currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The Scotts Miracle-Gro Company SMG reported third-quarter fiscal 2026 (ended June 27, 2026) adjusted earnings per share of $2.82, beating the Zacks Consensus Estimate of $2.53. The figure came in 8% higher than the year-ago quarter’s earnings of $2.62 per share.Including one-time items, earnings from continuing operations for Scotts Miracle-Gro Company were $1.75 per share, 34% lower year over year. Scotts Miracle-Gro Company’s net sales rose 1% year over year to $1,172 million, missing the consensus mark of $1,174 million.  Scotts Miracle-Gro Company currently carries a Zacks Rank #4 (Sell). Archer Daniels Midland Company ADM, scheduled to release second-quarter 2026 results on Aug. 4, has a trailing four-quarter average earnings surprise of 5.36%. The Zacks Consensus Estimate for Archer Daniels Midland’s earnings for the quarter is pegged at $1.27 per share, implying year-over-year growth of 36.6%. The consensus estimate for Archer Daniels Midland’s revenues is pegged at $22.38 billion, indicating a rise of 5.7% from the prior-year figure. Archer Daniels Midland currently carries a Zacks Rank #2 (Buy). Corteva, Inc. CTVA, scheduled to release second-quarter 2026 earnings tomorrow, has a trailing four-quarter average earnings surprise of 25.3%. The Zacks Consensus Estimate for Corteva’s earnings for the quarter is pegged at $2.24 per share, implying year-over-year growth of 1.8%. The consensus estimate for Corteva’s revenues is pegged at $6.62 billion, indicating a rise of 2.6% from the prior-year figure. Corteva currently carries a Zacks Rank of 2. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Bunge Global SA (BG) : Free Stock Analysis Report Archer Daniels Midland Company (ADM) : Free Stock Analysis Report The Scotts Miracle-Gro Company (SMG) : Free Stock Analysis Report Corteva, Inc. (CTVA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Company raises its full-year non-GAAP adjusted EPS from continuing operations guidance to $4.30 to $4.45, up from the prior guidance of $4.15 to $4.35 MARYSVILLE, Ohio, July 29, 2026 (GLOBE NEWSWIRE) -- The Scotts Miracle-Gro Company (NYSE: SMG), the leading marketer of branded consumer lawn and garden products in North America, today reported results for the third quarter ended June 27, 2026, and updated full-year guidance. “Our performance year to date demonstrates we are on track for the guidance we provided at the start of the fiscal year,” said Nate Baxter, president and CEO. “At the same time we are making meaningful strides with our multi-year SMG 2.0 growth strategy through channel expansion, innovation and a shift in how we are engaging with consumers. We have positioned ourselves well to strengthen the building blocks of SMG 2.0, putting us on a path to drive long-term sustainable growth and shareholder value.” Mark Scheiwer, chief financial officer and chief accounting officer, added, “We have consistently met or exceeded every one of our financial commitments this year by diligently managing our margin profile and strengthening the balance sheet. The increase in our EPS guidance is a reflection of this work as we continue to take a disciplined approach to execution while making strategic investments in our business and brands to help drive current and future profitability.” Additionally, the Hagedorn Partnership, L.P., the largest shareholder of the Company, has expressed its support for Baxter, who joined the Company in 2023 and was announced as president and CEO on June 29 after previously serving as president and COO. Baxter succeeded Jim Hagedorn, who completed a nearly 40-year career with ScottsMiracle-Gro and served as CEO since 2001. “Our family’s partnership fully supports Nate and his strategic vision for ScottsMiracle-Gro,” said Hope Reeves, chair of the Hagedorn Partnership. “We are incredibly grateful for Jim’s inspired leadership and remain fully committed to the Company our family helped build. Horace Hagedorn, father and grandfather to many of us, invented Miracle-Gro 75 years ago, and we couldn’t be more optimistic about SMG’s future.” Fiscal 2026 Third Quarter Highlights Net sales were $1.17 billion, an increase of 1% versus prior year. GAAP gross margin rate of 31.2% and non-GAAP adjusted gross margin rate of 31.3% decreased by 90 and 100 basis points over prior year, respectively, driven by higher freight and commodity costs resulting from the Iran conflict. Gross margin rate expansion remains on track over prior year, despite the higher freight and commodity costs, through continued supply chain automation, expanded use of AI, continued strong investment in manufacturing capital expenditures and purchasing efficiencies. GAAP net income from continuing operations was $1.75 per diluted share, a decline of 34% versus prior year, driven by impairment, restructuring and other non-recurring items. Non-GAAP adjusted net income from continuing operations of $2.82 per diluted share improved by 8% over prior year, partially the result of the strong operating performance of our Bonnie Plants joint venture and lower tax rate driven by higher earnings and discrete tax items, as the Company expects its full-year tax rate to range from 27-28% versus prior year of 29%. Net leverage ratio of 3.78x improved 0.37x versus last year. Full-Year Fiscal 2026 Outlook The Company now expects non-GAAP adjusted diluted net income per share from continuing operations of $4.30 to $4.45. The Company has reaffirmed the following elements of its original fiscal 2026 guidance: U.S. Consumer net sales low single-digit growth Non-GAAP adjusted gross margin rate of at least 32% Non-GAAP adjusted EBITDA mid single-digit growth Free cash flow of $275 million, driving leverage ratio down to the high 3s Conference Call and Webcast Scheduled for 8:15 a.m. ET Today, July 29, 2026 The Company will discuss results during a video presentation via webcast today at 8:15 a.m. ET. To watch the Company presentation and listen to the question-and-answer session, please register in advance at this webcast link. For those planning to participate in the question-and-answer session that follows the video presentation, please register for the webcast to view the presentation in addition to registering in advance via this audio link to receive call-in details and a unique PIN. A replay of the conference call will also be available on the Company’s investor website, where an archive of the press release and any accompanying information will remain available for at least a 12-month period. About ScottsMiracle-GroWith approximately $3.3 billion in sales, the Company is the leading marketer of branded consumer lawn and garden products in North America. The Company’s brands are among the most recognized in the industry. The Company’s Scotts®, Miracle-Gro®, Ortho® and Tomcat® brands are market-leading in their categories. For additional information, visit us at www.scottsmiraclegro.com. Cautionary Note Regarding Forward-Looking Statements Statements contained in this press release, other than statements of historical fact, which address activities, events and developments that the Company expects or anticipates will or may occur in the future, including, but not limited to, information regarding the future economic performance and financial condition of the Company, the plans and objectives of the Company’s management, and the Company’s assumptions regarding such performance and plans are “forward-looking statements” within the meaning of the U.S. federal securities laws that are subject to risks and uncertainties. These forward-looking statements generally can be identified as statements that include phrases such as “guidance,” “outlook,” “projected,” “believe,” “target,” “predict,” “estimate,” “forecast,” “strategy,” “may,” “goal,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “likely,” “will,” “should” or other similar words or phrases. Actual results could differ materially from the forward-looking information in this release due to a variety of factors, including, but not limited to: An economic downturn and economic uncertainty may adversely affect demand for the Company’s products; The Company’s operations, financial condition or reputation may be impaired if its information or operational technology systems fail to perform adequately or if the Company is the subject of a data breach or cyber attack; The highly competitive nature of the Company’s markets could adversely affect its ability to maintain or grow revenues; In the event of a disaster, the Company’s disaster recovery and business continuity plans may fail, which could adversely interrupt its operations; Climate change and unfavorable weather conditions could adversely impact financial results; The Company may not successfully develop new product lines and products or improve existing product lines and products; The Company’s indebtedness could limit its flexibility and adversely affect its financial condition; Compliance with environmental and other public health regulations or changes in such regulations or regulatory enforcement priorities could increase the Company’s costs of doing business or limit its ability to market certain products; Because of the concentration of the Company’s sales to a small number of retail customers, the loss of one or more of, or significant reduction in orders from, any of its top customers, or a material reduction in the inventory of the Company’s products that they carry, could adversely affect the Company’s financial results; If the perception of the Company’s brands or organizational reputation are damaged, its consumers, distributors and retailers may react negatively, which could materially and adversely affect the Company’s business, financial condition and results of operations; The Company’s success depends on the retention and availability of key personnel and the effective succession of senior management; and The Company is involved in a number of legal proceedings and, while it cannot predict the outcomes of such proceedings and other contingencies with certainty, some of these outcomes could adversely affect the Company’s financial condition, results of operations and cash flows. Additional detailed information concerning a number of the important factors that could cause actual results to differ materially from the forward-looking information contained in this release is readily available in the Company’s publicly filed quarterly, annual and other reports. The Company disclaims any obligation to update developments of these risk factors or to announce publicly any revision to any of the forward-looking statements contained in this release, or to make corrections to reflect future events or developments. For investor inquiries:Brad CheltonVice PresidentTreasury, Tax and Investor [email protected](937) 309-2503 For media inquiries:Tom MatthewsChief Communications [email protected](937) 844-3864 THE SCOTTS MIRACLE-GRO COMPANYSegment Results (4)(In millions)(Unaudited) As a result of the classification of the Hawthorne business as a discontinued operation, the Company’s reportable segments for fiscal 2026 differ from those used in prior periods. The prior period amounts have been reclassified to reflect the removal of Hawthorne as a reportable segment and from results of continuing operations. U.S. Consumer consists of the Company’s consumer lawn and garden business in the United States. Other primarily consists of the Company’s consumer lawn and garden business in Canada. Corporate consists of general and administrative expenses and certain other income and expense items not allocated to the Company’s operating segments. Segment performance is evaluated based on several factors, including income (loss) before income taxes, amortization, impairment, restructuring and other charges (“Segment Profit (Loss)”), which is a non-GAAP financial measure. The Company believes this measure is indicative of performance trends and the overall earnings potential of each segment. The following tables present segment financial information from continuing operations for the periods indicated: (1)   Basic net income (loss) per common share amounts are calculated by dividing net income (loss) from continuing operations and discontinued operations by the weighted average number of common shares outstanding during the period. (2)   Diluted net income (loss) per common share amounts are calculated by dividing net income (loss) from continuing operations and discontinued operations by the weighted average number of common shares, plus all potential dilutive securities (common stock options, performance shares, performance units, restricted stock and restricted stock units) outstanding during the period. (3)   Reconciliation of Non-GAAP Measures Use of Non-GAAP Measures To supplement the financial measures prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company uses non-GAAP financial measures. The reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are shown in the tables above. These non-GAAP financial measures should not be considered in isolation from, or as a substitute for or superior to, financial measures reported in accordance with GAAP. Moreover, these non-GAAP financial measures have limitations in that they do not reflect all the items associated with the operations of the business as determined in accordance with GAAP. Other companies may calculate similarly titled non-GAAP financial measures differently than the Company, limiting the usefulness of those measures for comparative purposes. In addition to GAAP measures, management uses these non-GAAP financial measures to evaluate the Company’s performance, engage in financial and operational planning, determine incentive compensation and monitor compliance with the financial covenants contained in the Company’s borrowing agreements because it believes that these non-GAAP financial measures provide additional perspective on and, in some circumstances are more closely correlated to, the performance of the Company’s underlying, ongoing business. Management believes that these non-GAAP financial measures are useful to investors in their assessment of operating performance and the valuation of the Company. In addition, these non-GAAP financial measures address questions routinely received from analysts and investors and, in order to ensure that all investors have access to the same data, management has determined that it is appropriate to make this data available to all investors. Non-GAAP financial measures exclude the impact of certain items (as further described below) and provide supplemental information regarding operating performance. By disclosing these non-GAAP financial measures, management intends to provide investors with a supplemental comparison of operating results and trends for the periods presented. Management believes these non-GAAP financial measures are also useful to investors as such measures allow investors to evaluate performance using the same metrics that management uses to evaluate past performance and prospects for future performance. Management views free cash flow as an important measure because it is one factor used in determining the amount of cash available for dividends and discretionary investment. Exclusions from Non-GAAP Financial Measures Non-GAAP financial measures reflect adjustments based on the following items: Impairments, which are excluded because they do not occur in or reflect the ordinary course of the Company’s ongoing business operations and their exclusion results in a metric that provides supplemental information about the sustainability of operating performance. Restructuring and employee severance costs, which include charges for discrete projects or transactions that fundamentally change the Company’s operations and are excluded because they are not part of the ongoing operations of its underlying business, which includes normal levels of reinvestment in the business. Costs related to refinancing, which are excluded because they do not typically occur in the normal course of business and may obscure analysis of trends and financial performance. Additionally, the amount and frequency of these types of charges is not consistent and is significantly impacted by the timing and size of debt financing transactions. Unrealized gains and losses on non-core equity and other investments, which are excluded because the valuations of these investments are subject to significant market volatility that is not directly related to the operating performance of the Company’s core business operations. Discontinued operations and other unusual items, which include costs or gains related to discrete projects or transactions and are excluded because they are not comparable from one period to the next and are not part of the ongoing operations of the Company’s underlying business. The tax effect for each of the items listed above is determined using the tax rate and other tax attributes applicable to the item and the jurisdiction(s) in which the item is recorded. Definitions of Non-GAAP Financial Measures The reconciliations of non-GAAP disclosure items include the following financial measures that are not calculated in accordance with GAAP: Adjusted gross margin: Gross margin excluding impairment, restructuring and other charges / recoveries.Adjusted income (loss) from operations: Income (loss) from operations excluding impairment, restructuring and other charges / recoveries. Adjusted income (loss) from continuing operations before income taxes: Income (loss) from continuing operations before income taxes excluding impairment, restructuring and other charges / recoveries, unrealized gains and losses on non-core equity and other investments, costs related to refinancing and certain other non-operating income / expense items.Adjusted income tax expense (benefit) from continuing operations: Income tax expense (benefit) from continuing operations excluding the tax effect of impairment, restructuring and other charges / recoveries, unrealized gains and losses on non-core equity and other investments, costs related to refinancing and certain other non-operating income / expense items.Adjusted net income (loss) from continuing operations: Net income (loss) from continuing operations excluding impairment, restructuring and other charges / recoveries, unrealized gains and losses on non-core equity and other investments, costs related to refinancing and certain other non-operating income / expense items, each net of tax. Adjusted diluted net income (loss) per common share from continuing operations: Diluted net income (loss) per common share from continuing operations excluding impairment, restructuring and other charges / recoveries, unrealized gains and losses on non-core equity and other investments, costs related to refinancing and certain other non-operating income / expense items, each net of tax.Adjusted EBITDA: Net income (loss) before interest, taxes, depreciation and amortization as well as certain other items such as discontinued operations, the impact of the cumulative effect of changes in accounting, costs associated with debt refinancing and other non-recurring or non-cash items affecting net income (loss). A form of Adjusted EBITDA is used in agreements governing the Company’s outstanding indebtedness for debt covenant compliance purposes. Adjusted EBITDA as used in those agreements includes additional adjustments to the Adjusted EBITDA presented in the reconciliations above which may decrease or increase Adjusted EBITDA for purposes of the Company’s financial covenants. For the three and nine months ended June 27, 2026, the following items were adjusted, in accordance with the definitions above, to arrive at the non-GAAP financial measures: Income (loss) from discontinued operations, net of tax, associated with the Hawthorne business was $8.6 million and $(93.3) million for the three and nine months ended June 27, 2026, respectively. This includes a pre-tax loss of $101.8 million for the nine months ended June 27, 2026 related to the sale of the Hawthorne business in North America. During the three months ended June 27, 2026, the Company recorded a $32.6 million reduction to the cumulative pre-tax loss driven by the closing date valuation of the non-cash sale consideration. During the three and nine months ended June 27, 2026, the Company recorded employee and executive severance charges of $1.0 million and $1.7 million, respectively, in the “Cost of sales—impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations and $21.5 million and $21.7 million, respectively, in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations. During the three and nine months ended June 27, 2026, the Company recorded unrealized losses on non-core equity and other investments of $15.7 million in the “Other non-operating expense, net” line in the Condensed Consolidated Statements of Operations. During the three and nine months ended June 27, 2026, the Company recorded a non-cash impairment charge of $8.7 million related to a seller financing loan in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations. During the three and nine months ended June 27, 2026, the Company recorded a non-cash impairment charge of $7.9 million related to a convertible debt investment in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations. During the three and nine months ended June 27, 2026, the Company recorded a charge of $4.0 million in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations associated with a settlement agreement to resolve a dispute with former shareholders of a business that was acquired in fiscal 2021. For the three and nine months ended June 28, 2025, the following items were adjusted, in accordance with the definitions above, to arrive at the non-GAAP financial measures: During the three and nine months ended June 28, 2025, the Company recorded employee and executive severance charges of $2.0 million and $5.0 million, respectively, in the “Cost of sales—impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations. During the three months ended June 28, 2025, employee and executive severance charges recorded in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations were not material. During the nine months ended June 28, 2025, the Company recorded employee and executive severance charges of $13.5 million in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations. During the three and nine months ended June 28, 2025, the Company recorded a non-cash loss of $0.0 million and $7.0 million, respectively, in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations related to the exchange of its convertible debt investment in RIV Capital Inc. for non-voting exchangeable shares of FLUENT Corp. (formerly Cansortium Inc.). During fiscal 2022, the Company began implementing a series of Company-wide organizational changes and initiatives intended to create operational and management-level efficiencies. As part of this restructuring initiative, the Company reduced the size of its supply chain network, reduced staffing levels and implemented other cost-reduction initiatives. During the three months ended June 28, 2025, costs associated with this restructuring initiative were not material. During the nine months ended June 28, 2025, the Company recorded costs of $3.6 million in the “Cost of sales—impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations associated with this restructuring initiative. Forward Looking Non-GAAP Measures      In this release, the Company presents certain forward-looking non-GAAP measures. The Company does not provide outlook on a GAAP basis because changes in the items that the Company excludes from GAAP to calculate the comparable non-GAAP measure, described above, can be dependent on future events that are less capable of being controlled or reliably predicted by management and are not part of the Company’s routine operating activities. Additionally, due to their unpredictability, management does not forecast many of the excluded items for internal use and therefore cannot create or rely on a GAAP outlook without unreasonable efforts. The occurrence, timing and amount of any of the items excluded from GAAP to calculate non-GAAP could significantly impact the Company’s GAAP results. As a result, the Company does not provide a reconciliation of forward-looking non-GAAP measures to GAAP measures, in reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K. (4)   During the three months ended December 27, 2025, the Company determined that the Hawthorne business met the criteria to be classified as held for sale, and classified the related assets and liabilities as held for sale on the Condensed Consolidated Balance Sheets for all periods presented. Effective in its first quarter of fiscal 2026, the Company classified its results of operations for all periods presented to reflect the Hawthorne business as a discontinued operation. The Company completed the divestiture of its Hawthorne business in North America on April 8, 2026.

Scotts Miracle-Gro (SMG) came out with quarterly earnings of $2.82 per share, beating the Zacks Consensus Estimate of $2.53 per share. This compares to earnings of $2.59 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +11.46%. A quarter ago, it was expected that this lawn and garden products company would post earnings of $3.97 per share when it actually produced earnings of $4.53, delivering a surprise of +14.11%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Scotts, which belongs to the Zacks Agriculture - Operations industry, posted revenues of $1.17 billion for the quarter ended June 2026, missing the Zacks Consensus Estimate by 0.17%. This compares to year-ago revenues of $1.19 billion. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Scotts shares have added about 25.3% since the beginning of the year versus the S&P 500's gain of 8.5%. While Scotts has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Scotts was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is -$1.99 on $335.68 million in revenues for the coming quarter and $4.36 on $3.32 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Agriculture - Operations is currently in the top 40% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Corteva, Inc. (CTVA), has yet to report results for the quarter ended June 2026. The results are expected to be released on July 30. This agriculture is expected to post quarterly earnings of $2.24 per share in its upcoming report, which represents a year-over-year change of +1.8%. The consensus EPS estimate for the quarter has been revised 89.9% lower over the last 30 days to the current level. Corteva, Inc.'s revenues are expected to be $6.62 billion, up 2.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Scotts Miracle-Gro Company (SMG) : Free Stock Analysis Report Corteva, Inc. (CTVA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management is executing a fundamental shift toward 'SMG 2.0,' prioritizing quality earnings and margin expansion over aggressive volume growth to ensure sustainable long-term value. The company deliberately exited approximately $100 million in low-margin commodity mulch and soil sales to reallocate resources toward high-margin branded products. Branded product sales grew 4.5% year-to-date, validating the strategic pivot toward premium categories like grass seed, fertilizer, and specialized control products. A significant media mix shift is underway, with 80% of investments now directed toward digital channels to better reach emerging consumers and drive e-commerce POS gains. Organizational restructuring includes the elimination of the COO role to accelerate decision-making and the addition of Chief Innovation and Chief Information Officers. Supply chain savings, totaling roughly 1% of sales, are being achieved through capital investments in automation, AI, and plant upgrades to offset commodity volatility. Consumer research indicates high category resilience, with 74% of respondents viewing lawn and garden care as a necessity despite broader macroeconomic volatility. Full-year U.S. Consumer sales growth is expected at the lower end of the low-single-digit guide due to slightly elevated retailer inventories entering Q4. The company is reevaluating long-term financial targets, suggesting that the $1 billion EBITDA milestone may be achieved beyond the original 2030 timeline to prioritize margin quality. Management plans to implement pricing actions and further cost-out initiatives in fiscal 2027 to counteract ongoing commodity and freight headwinds. SKU rationalization will continue with a target of removing 30% of the lowest-performing products by the end of fiscal 2027 to make room for higher-margin innovation. Capital allocation will focus on maintaining the quarterly dividend and a measured approach to the newly authorized share repurchase program while targeting a leverage ratio below 3.12x. Q3 GAAP results included $64 million in impairment and restructuring charges, primarily related to executive severance and non-cash impairments of non-core investments. Commodity costs increased $15 million above the initial plan for the year, largely driven by geopolitical tensions affecting freight and raw materials. Unfavorable weather in early May caused temporary POS softness, though consumer demand recovered strongly during the Memorial Day and June periods. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management is being conservative with Q4 forecasts because retailer inventories are slightly higher than the previous year following a slow start to the spring season. June saw record-breaking sales, and the company expects strong fall programming and continued demand for control products to help normalize inventory levels by year-end. The company is now launching new products digitally first to test market demand and gain consumer insights before seeking traditional brick-and-mortar shelf space. This approach bypasses traditional annual retail line review cycles, allowing for a faster pace of innovation and more efficient scaling of successful products. Management confirmed expectations for continued gross margin expansion in 2027 through a combination of pricing, cost-out initiatives, and a more favorable product mix. While retailers generally resist price increases, management noted that partners are 'eyes wide open' regarding the current inflationary environment and geopolitical impacts.