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The Scotts Miracle-Gro (SMG) investor relations material
The Scotts Miracle-Gro Q1 2026 earnings summary
Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.Executive summary
Strategic focus on long-term value creation, with a multi-year growth plan targeting $1B in incremental sales and $1B in EBITDA by 2030, and major investments in innovation, marketing, automation, and technology, with annual investments approaching $1B.
Reaffirmed fiscal 2026 guidance and continued progress on Hawthorne divestiture, now classified as a discontinued operation, with closing expected in fiscal Q2 2026.
U.S. Consumer sales on track for low single-digit net sales growth; e-commerce POS dollars grew 12% and units 17% year-over-year.
Board approved a $500M multi-year share repurchase program to begin in late 2026, aiming to reduce share count to 40M, aligned with leverage reduction and capital priorities.
Retailers are building healthy inventory levels ahead of the 2026 lawn and garden season.
Financial highlights
Q1 net sales (excluding Hawthorne) were $354.4M, down 3% year-over-year; U.S. Consumer sales reached $328.5M, with e-commerce and branded product growth remaining strong.
GAAP gross margin rate was 25%, up 90 bps year-over-year; adjusted gross margin was 25.4% vs. 24.5% prior year.
Non-GAAP adjusted EBITDA for Q1 was $3M, up from $0.9M year-over-year, ahead of expectations due to timing of sales.
GAAP net loss from continuing operations was $47.8M ($0.83/share) vs. $66.1M ($1.15/share) prior year; adjusted loss was $44.6M ($0.77/share) vs. $50.2M ($0.88/share) prior year.
Interest expense fell 20% year-over-year to $27.2M; leverage ratio improved to 4.03x from 4.52x.
Outlook and guidance
Fiscal 2026 guidance: U.S. Consumer net sales growth in low single digits, adjusted gross margin rate of at least 32%, adjusted EPS of $4.15–$4.35, mid-single digit adjusted EBITDA growth, and $275M free cash flow.
Leverage ratio targeted to decline to high threes by year-end, below 3.5x by end of FY27.
Management expresses high confidence in outperforming guidance, with incentive plans requiring outperformance for full payout.
Long-term plan targets 5% annual top-line growth through innovation, pricing, volume, and modest M&A.
Sale of Hawthorne business expected within twelve months, representing a strategic shift.
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