The Scotts Miracle-Gro 2025 Q4 Earnings Narrowed Losses, Mixed Revenue Performance

The Scotts Miracle-Gro (SMG) reported fiscal 2025 Q4 earnings on Nov 6, 2025, showing a narrowed loss and mixed revenue performance. The company’s adjusted EPS of -$1.96 beat estimates by $0.01, while revenue fell 6.6% year-over-year to $387.40 million, missing the $396.76 million consensus. Management highlighted cost discipline and AI-driven efficiency as key factors in margin improvement, despite ongoing sales challenges.

Revenue

The Scotts Miracle-Gro’s total revenue declined by 6.6% to $387.40 million in 2025 Q4, with U.S. Consumer sales accounting for the majority at $311.20 million. Hawthorne’s indoor and hydroponics segment reported $49.90 million in revenue, while the "Other" category contributed $26.30 million. Consolidated results reflect a challenging market environment, though U.S. Consumer sales held steady at $2.99 billion for the full year, meeting internal targets.

Earnings/Net Income

The company narrowed its net loss to $151.80 million in 2025 Q4, a 37.8% improvement from the $244.0 million loss in 2024 Q4. Adjusted EPS improved to -$1.96 from -$2.31, driven by cost reductions and operational efficiencies. Despite the revenue decline, the narrowed loss signals progress in managing expenses and stabilizing the business.

Post-Earnings Price Action Review

The strategy of buying SMG shares after a revenue raise on the earnings report release date and holding for 30 days demonstrated favorable performance over the past three years. This approach yielded a 20.5% return, outpacing the S&P 500’s 14.6% gain. Quarterly returns included notable gains in April 2023 (25.5%) and October 2024 (18.8%), while risk was mitigated by a 30-day holding period. SMG’s stable dividend payouts further enhanced returns, with consistent yield contributing to investor confidence. The strategy’s disciplined horizon balanced short-term market reactions with long-term growth potential, outperforming the S&P 500 in two of three years despite market volatility.

CEO Commentary

CEO Jim Hagedorn emphasized the company’s "recession-resistant" position in the lawn and garden industry, leveraging AI and automation to drive margin expansion. He highlighted progress in reducing debt, improving free cash flow, and securing the dividend, which is now fully covered by cash flow. Hagedorn acknowledged challenges in the Hawthorne segment but noted its transition from cash consumption to stability. Looking ahead, he expressed confidence in U.S. Consumer growth, retailer destocking completion, and sustained e-commerce momentum as key drivers for 2026.

Guidance

For fiscal 2026, The Scotts Miracle-Gro expects low single-digit growth in U.S. Consumer net sales, non-GAAP adjusted gross margin of at least 32%, and adjusted EPS between $4.15 and $4.35. Free cash flow is projected at $275 million, supporting leverage reduction to the high 3’s. The company also anticipates mid-single-digit adjusted EBITDA growth, driven by cost efficiencies and strategic investments in brand and channel expansion.

Additional News

Recent developments include a $0.66 quarterly dividend declaration, payable Dec 5, 2025, reaffirming the company’s commitment to shareholder returns. Stifel Nicolaus raised its price target to $70, reflecting confidence in SMG’s turnaround strategy. Additionally, the company announced 2026 guidance emphasizing U.S. Consumer growth, margin expansion, and free cash flow generation. These updates underscore investor optimism amid ongoing operational improvements.