Scotts Miracle-Gro shares rise 9% after fiscal 2027 outlook

Scotts Miracle-Gro (SMG) shares rose 8.8% in regular trading as of 3:59 p.m. ET, from a regular-session close of $61.80.

Scotts Miracle-Gro (SMG) posted a fiscal fourth-quarter adjusted loss of $2.16 per share for the three months ended Sept. 30, a smaller loss than the $2.23 per share consensus estimate. Net sales fell 11% to $302.9 million, below the $309.16 million estimate, the company said in a news release on Nov. 4.

Here's how the company did:

• Adjusted EPS: loss of $2.16 per share vs. loss of $1.97 a year earlier, against the $2.23 consensus estimate
• GAAP diluted EPS: loss of $2.10 per share vs. loss of $2.63 a year earlier
• Net sales: $302.9 million vs. $340.1 million a year earlier, against the $309.16 million estimate
• Full-year adjusted EPS: $4.48 vs. $3.80 a year earlier
• Full-year net sales: $3.29 billion, up 1% from a year earlier

For the full year, the company said adjusted EPS of $4.48 was above the $4.30 to $4.45 range it raised to on July 29, from $4.15 to $4.35.

Net income swung from a loss of $125.0 million in the first quarter of fiscal 2026 to a profit of $238.6 million in the second quarter, according to its SEC filings.

“I’m pleased with our performance and financial discipline in fiscal 2026, as we delivered on all our imperatives and significantly strengthened our balance sheet,” said Nate Baxter, president and CEO.

Fiscal 2027 outlook

The company expects net sales growth of 2% to 4% in fiscal 2027, with non-GAAP adjusted EPS from continuing operations of $4.70 to $4.90.

It also expects free cash flow of approximately $275 million, compared with $278.4 million in fiscal 2026, and continued expansion of its adjusted gross margin rate.

Net leverage improved 0.21x to 3.89x over the year. “We remain committed to de-levering with a path to 3.0 to 3.5x by fiscal 2029,” said chief financial officer and chief accounting officer Mark Scheiwer.

Hawthorne sale and IT costs

The company completed the divestiture of its Hawthorne business in North America on April 8, 2026. For the year, it recorded a pre-tax loss of $106.2 million on the sale and a loss of $91.0 million from discontinued operations, net of tax.

Fourth-quarter results include $13.5 million of IT transformation costs, recorded in selling, general and administrative expense. The company plans to invest over $100.0 million in the multi-year project, including capital expenditures and operating expenses, which is expected to be substantially complete during fiscal 2028.