ScottsMiracle-Gro Reports Second Quarter Results; Gross Margin Improvement Drives EBITDA Growth
- Company reaffirms full-year U.S. Consumer segment net sales, consolidated adjusted gross margin and adjusted EBITDA and free cash flow guidance
- Consumer POS units were up 12 percent through first half; 60 percent of full-year consumer takeaway expected in third quarter
- Q2 2025 GAAP gross margin rate of 38.6% and non-GAAP adjusted gross margin rate of 39.1% reflect 820 and 380 basis point improvements over prior year, respectively
- Q2 2025 GAAP EPS of $3.72; non-GAAP Adjusted EPS of $3.98
- Q2 2025 non-GAAP Adjusted EBITDA of $402.8 million, improvement of $6.5 million over prior year
- Net leverage at 4.41x, down from prior year of 6.95x
MARYSVILLE, Ohio, April 30, 2025 (GLOBE NEWSWIRE) — The Scotts Miracle-Gro Company (NYSE: SMG), the world’s leading marketer of branded consumer lawn and garden products as well as a leader in indoor and hydroponic growing products, today announced its results for the second quarter ended March 29, 2025.
“We have made substantial progress in the key financial metrics that support our full-year guidance,” said Jim Hagedorn, chairman and CEO. “We are equally pleased with our year-to-date consumer product sales to retailers, given they are essentially flat excluding non-repeating fiscal ‘24 sales.
“An important underlying story is POS, as for the second straight quarter we drove double-digit increases in consumer takeaway, reflecting the power of our franchise and health of our consumer. This, combined with the fact that we are largely unaffected by tariffs this fiscal year, reaffirms our confidence in our outlook.”
Consumer purchases are measured through POS, or point-of-sale, data from the Company’s largest retailers.
Fiscal 2025 Second Quarter Financial Results
For the quarter ended March 29, 2025, total Company sales of $1.42 billion declined 7 percent from prior year sales of $1.53 billion. U.S. Consumer sales decreased 5 percent, to $1.31 billion from $1.38 billion in the same period last year, resulting from the impact of a colder and slower start to the lawn and garden season pushing some expected second quarter sales into the third quarter and non-repeating fiscal 2024 net sales of bulk raw materials and AeroGarden products.
GAAP and non-GAAP adjusted gross margin rates for the quarter were 38.6 percent and 39.1 percent, respectively. These compare to 30.4 percent and 35.3 percent, respectively, in the prior year. The improvements were primarily attributable to lower material, manufacturing and distribution costs, and improved product and segment mix.
The Company reported GAAP net income of $217.5 million, or $3.72 per diluted share, compared with $157.5 million, or $2.74 per diluted share, in the same quarter a year ago. Non-GAAP adjusted net income for the quarter, which excludes impairment, restructuring and other non-recurring items, was $232.2 million, or $3.98 per diluted share, compared with $211.9 million, or $3.69 per diluted share, for the same period last year.
Non-GAAP adjusted EBITDA for the quarter was $402.8 million compared to $396.3 million a year ago. The improvement was driven by the Company’s significant gross margin recovery.
“We continue to advance our fiscal 2025 financial plan focused on sustainable net sales growth, margin recovery and a stronger balance sheet,” said Mark Scheiwer, chief financial officer and chief accounting officer. “We are driving significant free cash flow and debt paydown while making incremental investments in consumer activation programs. POS trends have remained consistent through April, and retailer replenishment is expected to be strong in our fiscal third quarter.”
Fiscal 2025 Outlook
The Company reaffirms its previously announced U.S. Consumer segment net sales, adjusted gross margin, adjusted EBITDA and free cash flow guidance. Given the continued uncertain environment in the cannabis industry, the Company is no longer providing full-year revenue guidance for its Hawthorne segment. More details will be shared during today’s call, and the Company also expects to provide an updated outlook in early June.
Conference Call and Webcast Scheduled for 9 a.m. ET Today, April 30, 2025
The Company will discuss results during a video presentation via webcast today at 9 a.m. ET. To watch the Company presentation and listen to the question-and-answer session, please register in advance at this webcast link. For those planning to participate in the question-and-answer session that follows the video presentation, please register for the webcast to view the presentation in addition to registering in advance via this audio link to receive call-in details and a unique PIN. Supplemental slides will be available approximately 15 minutes prior to the start of the conference call. A replay of the conference call will also be available on the Company’s investor website where an archive of the press release and any accompanying information will remain available for at least a 12-month period.
About ScottsMiracle-Gro
With approximately $3.6 billion in sales, the Company is the world’s largest marketer of branded consumer products for lawn and garden care. The Company’s brands are among the most recognized in the industry. The Company’s Scotts®, Miracle-Gro® and Ortho® brands are market-leading in their categories. The Company’s wholly-owned subsidiary, The Hawthorne Gardening Company, is a leading provider of nutrients, lighting and other materials used in the indoor and hydroponic growing segment. For additional information, visit us at www.scottsmiraclegro.com.
