Scotts Miracle-Gro Full-Year Adjusted EPS Beats Guidance

The Tip Desk · November 4, 2026 · 3 min read

Non-GAAP adjusted earnings from continuing operations were $4.48 a share for the year ended September 30, 2026, above the $4.30 to $4.45 range the company had set after the third quarter.

The Scotts Miracle-Gro Company (SMG), home to North America’s leading consumer lawn and garden brands, reported non-GAAP adjusted earnings from continuing operations of $4.48 a share for the fiscal year ended September 30, 2026, above the $4.30 to $4.45 range it had set after the third quarter.

GAAP diluted earnings from continuing operations were $3.30 a share, up 6% from $3.10 a year earlier. The company said the year-over-year improvement in both GAAP and non-GAAP results was aided by lower interest expense and a lower tax rate.

Full-year net sales were $3.29 billion, up 1% from $3.26 billion. The company attributed the increase to growth in branded products and continued e-commerce expansion.

GAAP gross margin rate for the year was 32.3% and the non-GAAP adjusted gross margin rate was 32.4%, up 100 and 80 basis points from 31.3% and 31.6%, respectively. The company said the expansion reflected continued supply chain savings, favorable mix from higher-margin branded product sales and pricing actions, partially offset by higher commodity and freight costs.

The fourth quarter was a different story. Net sales in the three months ended September 30, 2026 were $302.9 million, down 11% from $340.1 million a year earlier. GAAP gross margin swung to a $2.1 million loss, or 0.7% of sales, from $16.3 million, or 4.8% of sales.

U.S. Consumer, the company’s reportable segment covering its consumer lawn and garden business in the United States, posted net sales of $279.2 million, down 10% from $311.2 million. The Other segment, which primarily consists of the consumer lawn and garden business in Canada, recorded sales of $23.7 million, down 18% from $28.9 million.

U.S. Consumer segment profit (loss) widened to a $74.7 million loss from a $65.8 million loss a year earlier. Other segment profit (loss) was a $9.6 million loss versus a $9.8 million loss. Corporate recorded a $46.3 million loss. The company also recorded $13.5 million of IT transformation costs in the fourth quarter, a line not present in the year-ago quarter.

Adjusted EBITDA in the fourth quarter was a $106.7 million loss, 24% worse than the $86.1 million loss a year earlier.

For the full year, free cash flow was $278.4 million versus $273.9 million a year earlier. Net leverage of 3.89x improved 0.21x versus last year.

Chief financial officer Mark Scheiwer said the company met or exceeded its fiscal 2026 commitments for net sales, gross margin, EPS, free cash flow and leverage ratio, and that it expanded gross margin despite a challenging commodity and freight environment.

The company provided direction for fiscal 2027 that includes net sales growth of 2% to 4%, continued expansion of the non-GAAP adjusted gross margin rate, non-GAAP adjusted earnings per share from continuing operations of $4.70 to $4.90, free cash flow of approximately $275 million, and a leverage ratio declining year over year. The company said it remains on track to reach a target range of 3.0 to 3.5x by fiscal 2029.

President and CEO Nate Baxter said the company is making investments to transform the business into a modern lifestyle company with iconic brands in a growing category, and that the fiscal 2027 plan relies on what the company can control to navigate a volatile macroeconomic environment while advancing the SMG 2.0 strategy.