Scotts Miracle-Gro Company (The) (SMG) Earnings Date & Reports

Key Takeaways

• Scotts Miracle-Gro reported fiscal fourth-quarter net sales of $302.9 million, down 11% from the prior-year quarter.
• The company posted an adjusted loss of $2.16 per share, narrower than the roughly $2.22 loss Wall Street had expected.
• For the full fiscal year 2026, adjusted earnings per share (EPS) rose 18% to $4.48, exceeding the company's raised guidance range of $4.30 to $4.45.
• Full-year net sales grew 1% to $3.29 billion, while adjusted gross margin expanded 80 basis points to 32.4%.
• Management issued fiscal 2027 guidance for 2% to 4% sales growth and adjusted EPS of $4.70 to $4.90, above consensus estimates.
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Earnings Context and Why It Matters

Scotts Miracle-Gro's fiscal fourth quarter, which ends September 30, is seasonally its weakest period, as lawn and garden demand fades heading into winter. That makes the quarter a better read on retailer inventory management and full-year execution than on near-term consumer demand. This report also marked the first full fiscal year since the company completed its exit from the Hawthorne hydroponics business, sharpening its focus on branded U.S. consumer products. Investors were watching closely to see whether the company could defend gross margins, sustain free cash flow, and de-lever its balance sheet after a period of elevated debt. The fiscal 2027 outlook provided alongside these results offers an early signal on pricing power, cost control, and the company's SMG 2.0 transformation strategy.

Reported Results

For the fourth quarter of fiscal 2026, Scotts Miracle-Gro reported net sales of $302.9 million, an 11% decline from $340.1 million a year earlier. The adjusted net loss from continuing operations was $125.4 million, or $2.16 per share, compared with a loss of $1.97 per share in the prior-year period. The loss was narrower than the roughly $2.22 per share analysts had projected, even as revenue came in slightly below consensus.

Full-year results painted a stronger picture. Net sales rose 1% to $3.29 billion, driven by growth in branded products and continued e-commerce expansion. Adjusted EPS increased 18% to $4.48, above the company's raised guidance of $4.30 to $4.45. Adjusted gross margin expanded 80 basis points to 32.4%, and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) grew 2% to $579.9 million. Free cash flow reached $278.4 million, edging past the company's $275 million target, while net leverage improved to 3.89 times.

Looking ahead, management guided to fiscal 2027 net sales growth of 2% to 4%, continued gross margin expansion, adjusted EPS of $4.70 to $4.90, and free cash flow of approximately $275 million.

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Market Reaction and Investor Sentiment

Shares of Scotts Miracle-Gro rose sharply following the report, gaining roughly 8% to 10% in early trading on November 4, 2026, as investors focused on the better-than-expected quarterly loss and the above-consensus fiscal 2027 guidance. The reaction reflected relief that the company met or exceeded its full-year commitments for net sales, gross margin, EPS, and free cash flow despite a challenging commodity and freight environment.

Still, the underlying quarter showed areas of concern. U.S. Consumer segment sales fell 10%, and fourth-quarter adjusted gross margin turned slightly negative at -0.7% due to unfavorable fixed-cost leverage, higher freight costs, and lower Roundup commission income. The market's focus on the full-year trajectory and forward guidance suggests investors are weighing near-term seasonal softness against the company's progress on margin expansion, cash generation, and debt reduction.

Forward Outlook and Key Factors to Monitor

Management's fiscal 2027 outlook hinges on several controllable levers rather than an assumed rebound in demand. Targeted pricing of about 4% across the portfolio is expected to yield roughly 2% net of elasticity, while supply chain savings are projected to reach $35 million or more. The recent $55 million acquisition of Black Kow is expected to add one to two points of sales growth, and the company expects about $275 million in free cash flow for the year.

Investors should monitor a few key risks. Management flagged roughly $100 million of commodity and freight inflation tied to geopolitical conflict, and retailer inventories ended the year up low single digits, creating a near-term sales headwind. First-half fiscal 2027 sales are expected to be roughly flat, meaning any upside is back-loaded into the year.

Balance-sheet progress also remains central to the story. The company aims to reach a leverage range of 3.0 to 3.5 times by fiscal 2029, with debt reduction remaining the top capital-allocation priority. Weather patterns, consumer discretionary spending, and the pace of e-commerce growth will all influence whether the company can convert its cost and pricing initiatives into the consistent, profitable growth management is targeting.

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