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1. Company Snapshot

1.a. Company Description

The Scotts Miracle-Gro Company engages in the manufacture, marketing, and sale of products for lawn, garden care, and indoor and hydroponic gardening in the United States and internationally.The company operates through three segments: U.S. Consumer, Hawthorne, and Other.It provides lawn care products comprising lawn fertilizers, grass seed products, spreaders, other durable products, and outdoor cleaners, as well as lawn-related weed, pest, and disease control products; gardening and landscape products include water-soluble and continuous-release plant foods, potting mixes and garden soils, mulch and decorative groundcover products, plant-related pest and disease control products, organic garden products, and lives goods and seeding solutions.


The company also offers hydroponic products that help users to grow plants, flowers, and vegetables using little or no soil; lighting systems and components for use in hydroponic and indoor gardening applications; insect, rodent, and weed control products for home areas; and non-selective weed killer products.It sells its products under the Scotts, Turf Builder, EZ Seed, PatchMaster, Thick'R Lawn, GrubEx, EdgeGuard, Handy Green II, Miracle-Gro, LiquaFeed, Osmocote, Shake ‘N Feed, Hyponex, Earthgro, SuperSoil, Fafard, Nature Scapes, Ortho, Miracle-Gro Performance Organics, Miracle-Gro Organic Choice, Whitney Farms, EcoScraps, Mother Earth, Botanicare, Hydroponics, Vermicrop, Gavita, Agrolux, Can-Filters, Sun System, Gro Pro, Hurricane, AeroGarden, Titan, Tomcat, Ortho Weed B Gon, Roundup, Groundclear, and Alchemist brands.The company serves home centers, mass merchandisers, warehouse clubs, large hardware chains, independent hardware stores, nurseries, garden centers, e-commerce platforms, and food and drug stores, as well as indoor gardening and hydroponic distributors, retailers, and growers.


The Scotts Miracle-Gro Company was founded in 1868 and is headquartered in Marysville, Ohio.

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1.b. Last Insights on SMG

The Scotts Miracle-Gro Company's recent performance was driven by its strong Q3 earnings, with EPS up 12% year-over-year, beating Zacks Consensus Estimate. The company's core lawn and garden business showed resilience, with positive consumer sales, effective marketing, and e-commerce growth offsetting Hawthorne's weakness. Improving margins, healthy retail inventories, and market share gains also contributed to its turnaround momentum. Debt reduction and margin expansion are on track, supporting a secure 4.25% dividend.

1.c. Company Highlights

2. Scotts Miracle-Gro's Fiscal 2025 Earnings: A Strong Performance

The Scotts Miracle-Gro Company reported a net sales figure of $3.41 billion for fiscal 2025, representing a slight increase from the previous year when excluding the impact of Hawthorne and non-recurring sales. The company's U.S. consumer segment saw a 1% increase in net sales to $2.99 billion, driven by demand across categories, listing gains, and e-commerce expansion. The gross margin rate improved significantly, with a GAAP gross margin rate of 30.6% and a non-GAAP adjusted gross margin rate of 31.2%, exceeding the 30% target. Adjusted EBITDA was $581 million, a $71 million increase over fiscal 2024. The company's earnings per share (EPS) came in at a loss of $1.96, slightly worse than the estimated loss of $1.88.

Publication Date: Nov -16

📋 Highlights
  • Strong U.S. Consumer Performance: Net sales of $2.99 billion (1% YoY growth) with EBITDA of $581 million and free cash flow of $1.3 billion over three years.
  • Gross Margin Expansion: Full-year non-GAAP adjusted gross margin hit 31.2% (exceeding 30% target) with 500 basis points improvement.
  • E-commerce Growth: E-commerce POS units surged 51%, now 10% of total POS, with $0.5 billion in market share capture opportunity.
  • Strategic Buyback Plan: Proposed $500–$1 billion multi-year share repurchase program to enhance shareholder value.
  • Hawthorne Divestiture Progress: Full-year Hawthorne sales dropped 44% ($165.8 million) as the company shifts focus to lawn and garden.

Segment Performance

The U.S. consumer business delivered 3.6% point-of-sale (POS) dollar growth and 11% unit growth in the quarter, with full-year POS dollar gains of 1.4% and unit growth of 8.5%. The Hawthorne segment's full-year net sales were $165.8 million, down 44%, as the business was largely exited. The company's e-commerce expansion is a key area of focus, with a $0.5 billion opportunity to capture market share.

Guidance and Outlook

The company expects to maintain low single-digit sales growth for U.S. Consumer in fiscal 2026 and deliver gross margin approaching 33%. The guidance for fiscal 2026 includes low single-digit growth in U.S. consumer net sales, a non-GAAP adjusted gross margin rate of at least 32%, and non-GAAP adjusted earnings per share of $4.15 to $4.35. The company also expects mid-single-digit growth in non-GAAP adjusted EBITDA and free cash flow of $275 million.

Valuation and Return to Shareholders

The company's current valuation metrics include a P/E Ratio of 22.53, P/B Ratio of -9.16, and EV/EBITDA of 12.7. The company is planning a multi-year share buyback program to return value to shareholders, with a proposed size of between $500 million to $1 billion over multiple years. The Dividend Yield is 4.65%, and the Free Cash Flow Yield is 7.47%. The company's leverage ratio is expected to be in the high 3x range, and the ROIC is 11.41%, indicating a relatively strong return on invested capital.

Strategic Shifts and Investments

The company is making a strategic shift towards branded products, pulling away from commoditized bulk business, and investing in advertising, which has shown a good return on investment. CEO James Hagedorn mentioned that they are not under private label pressure, and their share in categories has increased by 1%. The company plans to increase advertising spend, with a target of around 8% of revenue, and has allocated dollars to support growth initiatives.

3. NewsRoom

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ScottsMiracle-Gro to Webcast Presentation at Raymond James 2025 TMT & Consumer Conference on December 9

Dec -04

Source: globenewswire.com

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The Scotts Miracle-Gro Company $SMG Shares Sold by Fisher Asset Management LLC

Dec -04

Source: defenseworld.net

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Edgestream Partners L.P. Grows Stock Holdings in The Scotts Miracle-Gro Company $SMG

Dec -04

Source: defenseworld.net

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Cetera Investment Advisers Decreases Stock Position in The Scotts Miracle-Gro Company $SMG

Dec -02

Source: defenseworld.net

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Local Bounti (NYSE:LOCL) & Scotts Miracle-Gro (NYSE:SMG) Head-To-Head Comparison

Nov -30

Source: defenseworld.net

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Columbus Crew and ScottsMiracle-Gro expand long-standing partnership, highlighted by stadium naming rights

Nov -25

Source: globenewswire.com

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Scotts Miracle-Gro's Q4 Earnings and Revenues Miss Estimates

Nov -07

Source: zacks.com

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Scotts Miracle-Gro's Turnaround Is On Track

Nov -06

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.94%)

6. Segments

United States Consumer

Expected Growth: 2.0%

The 2.0% growth of United States Consumer segment for The Scotts Miracle-Gro Company is driven by increasing consumer spending on lawn and garden care, rising demand for outdoor living and DIY projects, and the company's successful marketing efforts to promote its brands, such as Scotts and Miracle-Gro.

Hawthorne

Expected Growth: 1.8%

Hawthorne's 1.8% growth is driven by increasing demand for hydroponics and organic gardening products, particularly among millennials and Gen Z consumers. Additionally, the rise of cannabis legalization and growing adoption of indoor gardening contribute to the segment's growth.

Other

Expected Growth: 1.5%

The 1.5% growth in the 'Other' segment of The Scotts Miracle-Gro Company is driven by increasing demand for outdoor living products, expansion of e-commerce platforms, and strategic partnerships. Additionally, the company's focus on innovation, product diversification, and geographic expansion also contribute to this growth.

7. Detailed Products

Lawn Fertilizers

Scotts offers a wide range of lawn fertilizers that provide essential nutrients for a healthy and lush lawn.

Grass Seed

Scotts offers a variety of grass seed products for different climates and lawn types, including mixes for sun, shade, and drought tolerance.

Gardening Soils

Scotts gardening soils are designed to provide optimal growing conditions for flowers, vegetables, and other plants.

Pest Control

Scotts pest control products help homeowners protect their lawns and gardens from unwanted pests and insects.

Hydroponic Growing Systems

Scotts hydroponic growing systems provide a soilless growing method for indoor and outdoor gardening.

Indoor Gardening Products

Scotts indoor gardening products include a range of items like planters, grow lights, and fertilizers designed for indoor gardening.

8. The Scotts Miracle-Gro Company's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Scotts Miracle-Gro Company is moderate due to the presence of alternative gardening and lawn care products in the market.

Bargaining Power Of Customers

The bargaining power of customers is low due to the company's strong brand presence and customer loyalty.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate due to the company's dependence on a few large suppliers for raw materials.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the gardening and lawn care industry, including high capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several established players in the market, leading to intense competition and pricing pressures.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 111.41%
Debt Cost 8.14%
Equity Weight -11.41%
Equity Cost 12.33%
WACC 7.66%
Leverage -976.32%

11. Quality Control: The Scotts Miracle-Gro Company passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
CF Industries

A-Score: 5.9/10

Value: 6.5

Growth: 5.8

Quality: 7.1

Yield: 4.0

Momentum: 5.0

Volatility: 7.0

1-Year Total Return ->

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Mosaic

A-Score: 5.7/10

Value: 6.7

Growth: 3.8

Quality: 4.6

Yield: 5.0

Momentum: 8.0

Volatility: 6.0

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Cabot

A-Score: 5.5/10

Value: 7.1

Growth: 6.4

Quality: 6.0

Yield: 5.0

Momentum: 1.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Scotts Miracle-Gro

A-Score: 4.6/10

Value: 5.2

Growth: 4.1

Quality: 4.3

Yield: 7.0

Momentum: 1.5

Volatility: 5.3

1-Year Total Return ->

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FMC

A-Score: 4.4/10

Value: 8.6

Growth: 3.6

Quality: 4.1

Yield: 8.0

Momentum: 0.0

Volatility: 2.3

1-Year Total Return ->

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CMC

A-Score: 4.4/10

Value: 3.9

Growth: 3.8

Quality: 4.5

Yield: 2.0

Momentum: 6.0

Volatility: 6.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

53.82$

Current Price

53.82$

Potential

-0.00%

Expected Cash-Flows