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SMG Q3 Earnings Beat on Bonnie Plants JV Strength, Revenues Miss
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Key Takeaways
Scotts Miracle-Gro's adjusted EPS rose 7.6% to $2.82, beating estimates by 11.5%.
Higher freight and commodity costs cut adjusted gross margin by 100 basis points to 31.3%.
Fiscal 2026 adjusted EPS guidance increased to $4.30-$4.45; free cash flow stayed at $275 million.
The Scotts Miracle-Gro Company (SMG - Free Report) reported third-quarter fiscal 2026 (ended June 27, 2026) adjusted earnings of $2.82 per share, up 7.6% year over year. The figure beat the Zacks Consensus Estimate of $2.53 by 11.5%, aided by stronger results from the Bonnie Plants joint venture and a lower tax rate.
Net sales rose 1.1% year over year to $1.172 billion but marginally missed the consensus estimate of $1.174 billion by 0.2%. Adjusted gross margin contracted 100 basis points to 31.3% as higher freight and commodity costs tied to the Iran conflict weighed on profitability.
The Scotts Miracle-Gro Company Price, Consensus and EPS Surprise
U.S. Consumer sales were $1.03 billion, essentially flat compared with the year-ago quarter. It missed our estimate of $1.04 billion. Segment profit declined 2% to $229.8 million from $235.2 million, reflecting pressure from higher freight and commodity costs.
Hawthorne was classified as a discontinued operation after the company determined in the first quarter of fiscal 2026 that the business met the held-for-sale criteria. ScottsMiracle-Gro completed the divestiture of Hawthorne on April 8, 2026. Hawthorne was removed from reportable segment results, and prior-period continuing operations were reclassified.
Sales in the Other segment, which primarily includes the company’s Canadian consumer lawn-and-garden business, increased 8% to $139.2 million from $129.1 million. The figure beat our estimate of $131.5 million. Segment profit advanced 10% to $18.6 million.
Financials
Cash and cash equivalents were $27.7 million as of June 27, 2026. Long-term debt declined to $1.84 billion from $2.14 billion a year ago.
Outlook
Scotts Miracle-Gro raised its fiscal 2026 adjusted earnings guidance from continuing operations to $4.30-$4.45 per share from the previous range of $4.15-$4.35. Management linked the increase to disciplined execution, margin management, balance-sheet progress and strategic investments in the company’s brands and operations.
The company reaffirmed its expectation for low-single-digit growth in U.S. Consumer sales. It also maintained its forecast for an adjusted gross margin of at least 32% and mid-single-digit growth in adjusted EBITDA.
Management continues to expect free cash flow of $275 million, which is projected to reduce the leverage ratio to the high-3-times range. Supply-chain automation, expanded use of artificial intelligence, manufacturing capital expenditures and purchasing efficiencies are expected to support year-over-year margin expansion despite recent cost pressures.
SMG’s Price Performance
SMG’s shares have gained 11.1% in the past year compared with a 5.3% rise in the industry.
Image Source: Zacks Investment Research
SMG’s Zacks Rank & Key Picks
SMG currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Neo Performance Materials Inc. (NOPMF - Free Report) , Kronos Worldwide, Inc. (KRO - Free Report) and Avient Corporation (AVNT - Free Report) .
Neo Performance is slated to report second-quarter 2026 results on Aug. 11. The Zacks Consensus Estimate for earnings is pegged at $1.48 per share. NOPMF sports a Zacks Rank #1 (Strong Buy) at present. You can seethe complete list of today’s Zacks #1 Rank stocks here.
Kronos is scheduled to report second-quarter 2026 results on Aug. 5. The Zacks Consensus Estimate for KRO’s second-quarter loss per share is pegged at 33 cents, indicating 65.63% year-over-year growth. KRO also flaunts a Zacks Rank #2 (Buy) at present.
Avient is slated to report second-quarter 2026 results on Aug. 6. The consensus estimate for AVNT’s earnings per share is pegged at $3.08. AVNT presently carries a Zacks Rank #2.
View the Zacks #1 Rank List
Image: Bigstock
SMG Q3 Earnings Beat on Bonnie Plants JV Strength, Revenues Miss
Key Takeaways
The Scotts Miracle-Gro Company (SMG - Free Report) reported third-quarter fiscal 2026 (ended June 27, 2026) adjusted earnings of $2.82 per share, up 7.6% year over year. The figure beat the Zacks Consensus Estimate of $2.53 by 11.5%, aided by stronger results from the Bonnie Plants joint venture and a lower tax rate.
Net sales rose 1.1% year over year to $1.172 billion but marginally missed the consensus estimate of $1.174 billion by 0.2%. Adjusted gross margin contracted 100 basis points to 31.3% as higher freight and commodity costs tied to the Iran conflict weighed on profitability.
The Scotts Miracle-Gro Company Price, Consensus and EPS Surprise
The Scotts Miracle-Gro Company price-consensus-eps-surprise-chart | The Scotts Miracle-Gro Company Quote
Segment Details
U.S. Consumer sales were $1.03 billion, essentially flat compared with the year-ago quarter. It missed our estimate of $1.04 billion. Segment profit declined 2% to $229.8 million from $235.2 million, reflecting pressure from higher freight and commodity costs.
Hawthorne was classified as a discontinued operation after the company determined in the first quarter of fiscal 2026 that the business met the held-for-sale criteria. ScottsMiracle-Gro completed the divestiture of Hawthorne on April 8, 2026. Hawthorne was removed from reportable segment results, and prior-period continuing operations were reclassified.
Sales in the Other segment, which primarily includes the company’s Canadian consumer lawn-and-garden business, increased 8% to $139.2 million from $129.1 million. The figure beat our estimate of $131.5 million. Segment profit advanced 10% to $18.6 million.
Financials
Cash and cash equivalents were $27.7 million as of June 27, 2026. Long-term debt declined to $1.84 billion from $2.14 billion a year ago.
Outlook
Scotts Miracle-Gro raised its fiscal 2026 adjusted earnings guidance from continuing operations to $4.30-$4.45 per share from the previous range of $4.15-$4.35. Management linked the increase to disciplined execution, margin management, balance-sheet progress and strategic investments in the company’s brands and operations.
The company reaffirmed its expectation for low-single-digit growth in U.S. Consumer sales. It also maintained its forecast for an adjusted gross margin of at least 32% and mid-single-digit growth in adjusted EBITDA.
Management continues to expect free cash flow of $275 million, which is projected to reduce the leverage ratio to the high-3-times range. Supply-chain automation, expanded use of artificial intelligence, manufacturing capital expenditures and purchasing efficiencies are expected to support year-over-year margin expansion despite recent cost pressures.
SMG’s Price Performance
SMG’s shares have gained 11.1% in the past year compared with a 5.3% rise in the industry.
Image Source: Zacks Investment Research
SMG’s Zacks Rank & Key Picks
SMG currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Neo Performance Materials Inc. (NOPMF - Free Report) , Kronos Worldwide, Inc. (KRO - Free Report) and Avient Corporation (AVNT - Free Report) .
Neo Performance is slated to report second-quarter 2026 results on Aug. 11. The Zacks Consensus Estimate for earnings is pegged at $1.48 per share. NOPMF sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kronos is scheduled to report second-quarter 2026 results on Aug. 5. The Zacks Consensus Estimate for KRO’s second-quarter loss per share is pegged at 33 cents, indicating 65.63% year-over-year growth. KRO also flaunts a Zacks Rank #2 (Buy) at present.
Avient is slated to report second-quarter 2026 results on Aug. 6. The consensus estimate for AVNT’s earnings per share is pegged at $3.08. AVNT presently carries a Zacks Rank #2.