The Scotts Miracle-Gro (SMG) Q4 2025 earnings summary

Executive summary

• Achieved robust gross margin and EPS growth in fiscal 2025, with strong U.S. Consumer sales, significant free cash flow, and improved profitability, supported by supply chain optimization and operational efficiencies.

• Deepened competitive moat through brand strength, R&D, supply chain, and sales execution, gaining market share in a growing consumer category.

• Continued debt reduction, lowering leverage ratio to 4.1x and interest expense by $30 million.

• Retail partnerships remained robust, with increased predictability and financial flexibility; new credit facility expected on better terms.

• Proposed multi-year share buyback program for fiscal 2026, emphasizing shareholder returns beyond dividends.

Financial highlights

• Full-year company sales reached $3.41 billion; U.S. Consumer net sales were $2.99 billion, with adjusted EBITDA at $581 million, up 14% year-over-year.

• Gross margin improved by 490 basis points to 31.2% (non-GAAP), exceeding the 30% target.

• Free cash flow was $274 million, surpassing targets and used for debt reduction and dividends.

• GAAP net income for the year was $145.2 million ($2.47/share); non-GAAP adjusted EPS was $3.74, up 63% year-over-year.

• Q4 2025 net sales were $387.4 million, down 7% from Q4 2024; adjusted net loss improved to $(113.1) million.

Outlook and guidance

• Fiscal 2026 guidance: low single-digit U.S. Consumer net sales growth, non-GAAP gross margin of at least 32%, adjusted EPS of $4.15–$4.35, and free cash flow of $275 million.

• Leverage ratio expected to fall into the high threes by end of FY26 and below 3.5x by FY27; mid-single-digit adjusted EBITDA growth anticipated.

• Focus on branded product growth, e-commerce expansion, innovation, and continued cost savings and automation.