Scotts Miracle-Gro Q3 Earnings Surpass Estimates, Revenue Falls Short at $1.19 Billion

Scotts Miracle-Gro reported Q3 EPS of $2.54, beating estimates, while revenue fell short at $1.19 billion. The US Consumer segment saw a 1% increase in net sales, while the Hawthorne segment experienced a 54% decline in sales. The company achieved a non-GAAP adjusted EBITDA of $256.1 million, a $19.3 million improvement YoY.

Scotts Miracle-Gro (SMG) reported its third-quarter (Q3) earnings for 2025, showcasing a mixed performance with notable highlights and areas for improvement. The company reported an earnings per share (EPS) of $2.59, which exceeded the estimated $2.25 by 15.11%, a significant surprise for investors [2]. However, the company's revenue fell short of expectations at $1.19 billion, compared to the anticipated $1.23 billion, marking a 3.25% decline [2].

Key segments of the company's performance include:

- US Consumer Segment: The US Consumer segment saw a 1% increase in net sales to $1.03 billion, compared to the average analyst estimate of $1.07 billion. This segment continues to drive growth, reflecting a 1% organic increase year-to-date [2].
- Hawthorne Segment: The Hawthorne segment experienced a substantial 54% decline in sales, falling from $44.53 million to $31.2 million, significantly missing the average analyst estimate of $44.53 million [1].
- Other Segment: The Other segment saw a 8.2% increase in net sales, reaching $126.6 million, compared to the average analyst estimate of $114.45 million [1].

Despite the revenue shortfall, Scotts Miracle-Gro achieved a non-GAAP adjusted EBITDA of $256.1 million, representing a $19.3 million improvement year-over-year (YoY) [2]. The company also reported a gross margin improvement of nearly 300 basis points, indicating enhanced operational efficiency [2].

The company's stock experienced a premarket increase of 0.84% to $68.43 following the earnings announcement, although it had declined by 9.6% in regular trading the previous day [2]. The stock's movement remains within its 52-week range, suggesting potential for recovery as investors digest the earnings results [2].

Scotts Miracle-Gro reaffirmed its EBITDA guidance for the year, targeting a range of $570 to $590 million. The company aims to sustain 3% annual U.S. Consumer sales growth and expand its gross margin to the mid-30% range [2]. The CEO Jim Hagedorn emphasized the company's strong performance and competitive positioning, highlighting the importance of transformation and efficiency initiatives [2].

Risks and Challenges: The company needs to address the revenue miss to maintain investor confidence, manage market volatility, and continue improving its supply chain to achieve cost savings targets. Additionally, macroeconomic factors and competitive pressure may impact the company's performance [2].

References:
- [1] https://finance.yahoo.com/news/scotts-smg-reports-q3-earnings-133005847.html
- [2] https://in.investing.com/news/transcripts/earnings-call-transcript-scotts-miraclegro-q3-2025-earnings-beat-expectations-93CH-4935278