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Investing.com - ScottsMiracle-Gro (NYSE:SMG) reported better-than-expected fourth-quarter results on Wednesday, with adjusted earnings slightly exceeding analyst estimates despite revenue falling short of expectations.
The company also provided an optimistic outlook for fiscal 2026, projecting earnings well above Wall Street forecasts.
The leading lawn and garden products marketer posted an adjusted loss of $1.96 per share for its fiscal fourth quarter ended September 30, beating analyst expectations by 1 cent. Revenue came in at $387.4 million, below the consensus estimate of $396.2 million.
The company’s U.S. Consumer segment sales remained flat at $311.2 million compared to the same period last year, while Hawthorne segment sales declined 38% to $49.9 million.
For fiscal 2025, ScottsMiracle-Gro delivered adjusted earnings of $3.74 per share, up 63% from $2.29 per share in the previous year. The company reported significant gross margin expansion, with its adjusted gross margin rate improving by 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, ScottsMiracle-Gro provided fiscal 2026 guidance that exceeded analyst expectations, projecting adjusted earnings of $4.15 to $4.35 per share, well above the consensus estimate of $3.71.
The company anticipates low single-digit growth in U.S. Consumer net sales and expects its adjusted gross margin to reach at least 32%.
CFO Mark Scheiwer noted, "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."
The company generated free cash flow of $274 million in fiscal 2025, exceeding expectations and reducing its net leverage ratio to 4.10x, an improvement of 0.76x compared to the previous year.
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