The Scotts Miracle-Gro 2025 Q3 Earnings Earnings Growth Despite Revenue Decline

The Scotts Miracle-Gro (SMG) reported its fiscal 2025 Q3 earnings on July 30th, 2025. Despite a slight 1.2% decline in total revenue to $1.19 billion compared to $1.20 billion in Q3 2024, the company achieved notable earnings growth. The EPS climbed 10.7% to $2.58, surpassing the previous year's $2.33. Scotts Miracle-Gro reaffirmed its guidance, anticipating low single-digit U.S. Consumer net sales growth and an adjusted EBITDA between $570 million and $590 million, remaining in line with expectations.

Revenue
The total revenue for The Scotts Miracle-Gro decreased by 1.2% to $1.19 billion in Q3 2025 from $1.20 billion in Q3 2024. The U.S. Consumer segment generated $1.03 billion, while the Hawthorne division contributed $31.20 million. Additionally, other segments accounted for $126.60 million, cumulatively leading to the consolidated revenue figure of $1.19 billion.

Earnings/Net Income
Scotts Miracle-Gro's EPS increased 10.7% to $2.58 in Q3 2025, rising from $2.33 in Q3 2024. This reflects strong financial performance, with net income growing by 12.9% to $149.10 million from $132.10 million the prior year, signaling robust profitability.

Price Action
The stock price of The Scotts Miracle-Gro fell 6.15% during the latest trading day, declined 11.40% over the past trading week, and decreased 5.55% month-to-date.

Post-Earnings Price Action Review
The strategy of purchasing SMG shares following an earnings beat and holding them for 30 days resulted in a substantial loss. This approach yielded a return of -56.87%, significantly underperforming the benchmark by 144.48%. The maximum drawdown remained at 0%, while the Sharpe ratio stood at -0.35, indicating elevated risk levels. Despite earnings growth, the investment strategy demonstrated considerable volatility and potential losses, highlighting the challenges faced by investors in navigating post-earnings market reactions.

CEO Commentary
Jim Hagedorn, Chairman and CEO, underscored significant improvements in essential financial metrics, aligning with fiscal 2025 plans. He affirmed the company's trajectory towards meeting its full-year guidance. Hagedorn emphasized steady consumer point-of-sale activity, extending the lawn and garden season's momentum. He also highlighted a strategic shift from internal cost-saving to external efforts aimed at attracting new and younger consumers, reinforcing the company's growth commitment.

Guidance
The company reaffirmed its full-year non-GAAP fiscal 2025 guidance, anticipating low single-digit growth in U.S. Consumer net sales, an adjusted gross margin of approximately 30%, and adjusted EBITDA between $570 million and $590 million. The non-GAAP adjusted earnings per share is expected to be at least $3.50, with free cash flow projected at around $250 million.

Additional News
In recent weeks, The Scotts Miracle-Gro Company announced a quarterly dividend payment, reflecting its commitment to returning value to shareholders. Additionally, the company participated in the William Blair Annual Growth Stock Conference, where it reaffirmed its fiscal 2025 guidance and highlighted strong consumer engagement during the peak lawn and garden season. Furthermore, Scotts Miracle-Gro expanded its green initiatives by collaborating with Project EverGreen to enhance green spaces at a heat-stressed park in Phoenix, underlining its dedication to environmental sustainability and community engagement.