ScottsMiracle-Gro Co. (NYSE:SMG) reported better-than-expected fourth-quarter results on Wednesday, as improved profitability offset slightly weaker revenue. Shares rose after the company issued an upbeat forecast for fiscal 2026, signaling confidence in continued margin and earnings growth.
The lawn and garden products company posted an adjusted loss of $1.96 per share, topping analyst expectations by a cent. Revenue came in at $387.4 million, just below the $396.2 million consensus estimate.
By segment, U.S. Consumer sales were flat year-over-year at $311.2 million, while the Hawthorne division — which focuses on hydroponics and indoor growing systems — fell 38% to $49.9 million, reflecting ongoing weakness in that market.
For fiscal 2025, ScottsMiracle-Gro delivered adjusted earnings of $3.74 per share, up 63% from $2.29 the prior year, supported by strong margin gains. The company’s adjusted gross margin rate rose 490 basis points to 31.2%.
“In fiscal ’25, we delivered significant results in the financial metrics that are central to our growth plans,” said Jim Hagedorn, Chairman and CEO. “We drove share gains, made substantial gross margin improvement and achieved meaningful EBITDA and EPS increases.”
Looking ahead, the company projected fiscal 2026 adjusted earnings between $4.15 and $4.35 per share, well above Wall Street’s consensus of $3.71, and expects low single-digit growth in U.S. Consumer net sales. The company also anticipates its adjusted gross margin will reach at least 32%.
CFO Mark Scheiwer said, “We not only delivered on our fiscal ’25 guidance, but we also outperformed our expectations for gross margin expansion, EPS and free cash flow, enabling us to reduce our debt levels and leverage ratio.”
ScottsMiracle-Gro generated $274 million in free cash flow during fiscal 2025, beating expectations and reducing its net leverage ratio to 4.10x, an improvement of 0.76x year-over-year.