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what it is
It sells branded lawn and garden products like grass seed, fertilizer, mulch, and weed killer.
how it gets paid
Last year Scotts Miracle-Gro made $3.4B in revenue. U.S. Consumer was the main engine at $3.0B, or 88% of sales.
why growth slowed
Revenue fell 3.9% last year. The $2.16 loss mattered most. It was 79% worse than a year ago.
what just happened
Scotts posted $354M in revenue and a $2.16 loss, with gross margin at 25.0%.
At a glance
B balance sheet — gets the job done, barely
35/100 earnings predictability — expect surprises
18.9x trailing p/e — priced about right
3.8% dividend yield — cash in your pocket every quarter
17.5% return on capital — nothing to write home about
xvary composite: 51/100 — below average
What they do
It sells branded lawn and garden products like grass seed, fertilizer, mulch, and weed killer.
88% of sales come from U.S. Consumer, while Hawthorne is 5%. That means your grass seed, fertilizer, and weed killer sit in one branded aisle, not a random shelf. The Jan. 29, 2025 release called Scotts, Miracle-Gro, and Ortho market-leading in their categories, so shelf space and habit do a lot of the work.
How they make money
$3.4B
annual revenue · their business grew -3.9% last year
U.S. Consumer
$3.0B
Hawthorne
$0.2B
Other
$0.2B
The products that matter
consumer lawn and garden products
Lawn and Garden Products
$3.4B revenue · 39% market share
it's the whole engine right now: $3.4B in annual revenue and a 39% share of the U.S. consumer lawn and garden market. If this category underdelivers, there is no second growth engine on this page coming to save you.
39% share
Key numbers
$3.4B
annual revenue
That is the whole top line. With 88% in U.S. Consumer, your spring sales matter more than your portfolio theory.
18.9x
trailing p/e
You pay 18.9 times trailing earnings for a company with a 3.8% dividend yield. That is not cheap, but it is not a panic price either.
17.5%
return on capital
The business earns 17.5 cents of operating profit for each dollar tied up. That is the difference between a hobby and a business.
$2.3B
long-term debt
Debt equals 35% of capital. That is a real claim on cash before you get to do anything fun with it.
Financial health
B
strength
- balance sheet grade B — adequate — nothing special
- risk rank 3 — safer than 50% of stocks
- price stability 25 / 100
- long-term debt $2.3B (35% of capital)
- net profit margin 8.4% — keeps 8 cents of every dollar in revenue
B — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in SMG 3 years ago → it's now worth $9,490.
The index would have given you $14,540.
source: institutional data · total return
What just happened
missed estimates
Scotts posted $354M in revenue and a $2.16 loss, with gross margin at 25.0%.
Revenue fell 3% vs. prior year. EPS fell 79% vs. prior year, so profit lagged sales by a wide margin.
$354M
revenue
-$2.16
eps
25.0%
gross margin
the number that mattered
The $2.16 loss mattered most. It was 79% worse than a year ago, even with $354M of revenue.
-
the company is off to a decent start in fiscal 2026.scotts miracle-gro posted a loss of $0.77 per share in its seasonally light fiscal first quarter, a meaningful improvement from the $0.88 loss a year earlier. despite the tough top-line comparison, and some strain on volumes, gross margins expanded 90 basis points on a combination of supply chain efficiencies and pricing actions. the pending divestiture of the hawthorne cannabis supply business, now classified as a discontinued operation, immediately added 40 basis points to gross margins and removes a source of earnings volatility that has weighed on the stock for years.
-
looking ahead, january retailer shipments hit record levels, e-commerce branded product sales are growing at a double-digit pace, and a strong innovation pipeline is launching into a spring season where management has expressed confidence in outperforming its full-year performance forecast of $4.15 to $4.35 a share.
-
the outlook for 2026 and 2027 is promising.near-term performance should accelerate as gross margins are propelled by ongoing supply-chain optimization and a deliberate shift toward higher-margined branded products where private label competition remains remarkably low. robust e-commerce growth, an attractive product development pipeline launching into a healthy spring season, and roughly $275 million in projected free cash flow directed toward deleveraging should collectively drive a double digit annual earnings growth rate over the next couple of years.
-
all told, the stock holds strong total return potential over the next 3 to 5 years.
source: company earnings report, 2026
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What could go wrong
SMG does not have the luxury of treating legal issues, weak spring demand, or a delayed cleanup as separate problems. With $2.3B of long-term debt, they all hit the same cash pile.
med
consolidated securities litigation
the lawsuits were consolidated by the court as in re the scotts miracle-gro company securities litigation. when an overhang has its own formal case name, it has graduated from nuisance to capital-allocation problem.
cash that goes to a legal resolution is cash that does not go to debt reduction, the dividend, or rebuilding investor trust.
med
spring season misses expectations
management reiterated $4.15–$4.35 of fiscal 2026 EPS while pointing to record january shipments and solid branded demand. that tells you the season matters. a company with 35/100 earnings predictability does not get many weather or retailer-order excuses.
if spring sell-through disappoints, the stock stops looking like a recovery story and starts looking like a low-growth consumer name carrying too much debt.
med
hawthorne cleanup helps less than expected
management said Hawthorne's classification as a discontinued operation added 40 basis points to gross margin. if the pending divestiture drags, or if that accounting tailwind fades without a matching operating improvement, one of the cleanest parts of the margin story gets thinner fast.
that would pressure the case for $4.15–$4.35 of fiscal 2026 EPS and make debt paydown look slower than the market wants.
med
local product rules chip away at margin
the company faces the risk of new and different legal and regulatory requirements in local jurisdictions. for a mass-market branded product company, that usually shows up as higher compliance cost, product restrictions, or both.
this is less about one dramatic headline and more about an 8.2% net margin getting squeezed a little at a time.
the common thread is simple: if the legal bill rises, spring underwhelms, or the Hawthorne benefit fades, the roughly $275M of projected free cash flow stops looking like cleanup cash and starts looking barely sufficient.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
fiscal 2026 EPS guidance
management guided to $4.15–$4.35. if results drift below that range, the recovery story loses its cleanest proof point.
risk
the consolidated securities case
watch for material updates in the in re the scotts miracle-gro company securities litigation. this is the overhang with the most direct line to cash use.
trend
free cash flow for debt paydown
management pointed to roughly $275M in free cash flow. if that lands, the debt story cools down. if it misses, debt becomes the story again.
calendar
hawthorne divestiture progress
hawthorne's pending exit already added 40 basis points to gross margin through discontinued-operations treatment. you want to see that simplification turn into a lasting cleaner P&L.
Analyst rankings
short-term outlook
average
momentum score 3 — middle of the pack. in human-speak, analysts think the setup is fine, not special.
risk profile
average
stability score 3 — typical market risk, but the 25 / 100 price stability score tells you the ride can still get rough.
chart momentum
below average
technical score 4 — the chart still wants harder evidence that the operating cleanup is durable.
earnings predictability
35 / 100
forecastability is low. you should assume a company this seasonal can surprise both ways.
source: institutional data
Institutional activity
institutions have been net selling for 2 consecutive quarters — 120 buyers vs. 189 sellers in 4q2025. total institutional holdings: 42.8M shares. net selling for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$51
$126
$70
current price
$89
target midpoint · +26% from current · 3-5yr high: $165 (+135% · 26% ann'l return)
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