Scotts Miracle‑Gro reported fiscal 2025 fourth‑quarter revenue of $387.4 million, falling short of the $396.2‑$397.3 million consensus by $8.8‑$9.9 million. GAAP gross margin rose to 30.6 percent, while non‑GAAP adjusted gross margin reached 31.2 percent, an improvement of 490 basis points year‑over‑year. GAAP earnings per share were $2.47 and non‑GAAP adjusted EPS was $3.74, with the adjusted figure beating the consensus of $‑1.97 by $0.01. The company guided for fiscal 2026 adjusted earnings of $4.15‑$4.35 per share, an adjusted gross margin of at least 32 percent, mid‑single‑digit adjusted EBITDA growth, and roughly $275 million in free cash flow.
The margin expansion was driven by lower material costs and a shift toward higher‑margin product mix. Management highlighted the impact of AI‑driven automation and other cost‑reduction initiatives, which helped offset the revenue shortfall. The company’s focus on operational efficiency is reflected in the sustained improvement in gross margin despite a modest decline in overall sales.
Segment performance showed a resilient U.S. Consumer portfolio, while the Hawthorne segment—covering indoor and hydroponics products—experienced a 38‑44 percent decline in net sales. The downturn in Hawthorne reflects broader market challenges in that sector, whereas the U.S. Consumer segment maintained flat or slightly decreased sales, supported by strong point‑of‑sale unit growth and dollar volume gains.
CEO Jim Hagedorn said the quarter demonstrated “significant results in the financial metrics that are central to our growth plans” and emphasized the company’s commitment to AI, robotic automation, and brand investment. CFO Mark Scheiwer noted that the year‑end results “enabled us to reduce debt levels and leverage ratio” and that the company is well positioned to execute its growth strategy in fiscal 2026.
Investors reacted positively to the earnings release, with the stock rising modestly in pre‑market trading. The market’s favorable response was largely driven by the EPS beat and the optimistic fiscal 2026 guidance, which exceeded analyst expectations for adjusted earnings by more than $0.4 per share.
The results suggest a company that is improving profitability through disciplined cost management while facing headwinds in legacy segments. The strong guidance signals confidence in continued margin expansion and the ability to invest in high‑return initiatives, positioning Scotts Miracle‑Gro for sustained growth in its core consumer markets.
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