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Why Is Scotts (SMG) Down 11.3% Since Last Earnings Report?
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It has been about a month since the last earnings report for Scotts Miracle-Gro (SMG - Free Report) . Shares have lost about 11.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Scotts due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Scotts Miracle-Gro’s Q3 Earnings Beat on Bonnie Plants JV Strength, Revenues Miss
Scotts Miracle-Gro 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.
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.
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.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -11.56% due to these changes.
VGM Scores
At this time, Scotts has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock has a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Scotts has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Scotts (SMG) Down 11.3% Since Last Earnings Report?
It has been about a month since the last earnings report for Scotts Miracle-Gro (SMG - Free Report) . Shares have lost about 11.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Scotts due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Scotts Miracle-Gro’s Q3 Earnings Beat on Bonnie Plants JV Strength, Revenues Miss
Scotts Miracle-Gro 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.
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.
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.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -11.56% due to these changes.
VGM Scores
At this time, Scotts has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock has a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Scotts has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.