Fiscal 2026 full year
Filed Nov 4, 2026ScottsMiracle-Gro Reports Strong Fiscal 2026 Full-Year Results; GAAP and Non-GAAP Gross Margin Expands, Non-GAAP Adjusted EPS Exceeds Guidance
Fiscal 2026 net sales rose 1%, gross margin expanded, adjusted diluted EPS from continuing operations rose 18% to $4.48, free cash flow increased to $278.4 million, and net leverage improved to 3.89x. The fourth quarter was weaker, with net sales down 11% and a GAAP operating loss, while fiscal 2027 guidance calls for continued sales, adjusted EPS and free-cash-flow generation.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Fiscal 2026 net salesGAAP | $3.29B | – | 1% |
| Fiscal 2026 cost of salesGAAP | $2.22B | – | – |
| Fiscal 2026 gross marginGAAP | $1.06B | – | 4% |
| Fiscal 2026 gross margin as a % of salesGAAP | 32.3% | – | 100 basis points |
| Fiscal 2026 adjusted gross marginnon-GAAP | $1.07B | – | – |
| Fiscal 2026 adjusted gross margin as a % of salesnon-GAAP | 32.4% | – | 80 basis points |
| Fiscal 2026 selling, general and administrativeGAAP | $594.7M | – | 5% |
| Fiscal 2026 adjusted selling, general and administrativenon-GAAP | $581.2M | – | – |
| Fiscal 2026 income from operationsGAAP | $406.7M | – | 1% |
| Fiscal 2026 income from operations as a % of salesGAAP | 12.4% | – | – |
| Fiscal 2026 adjusted income from operationsnon-GAAP | $471.9M | – | – |
| Fiscal 2026 adjusted income from operations as a % of salesnon-GAAP | 14.3% | – | – |
| Fiscal 2026 net income from continuing operationsGAAP | $194.9M | – | 7% |
| Fiscal 2026 net incomeGAAP | $103.9M | – | (28)% |
| Fiscal 2026 diluted net income per common share from continuing operationsGAAP | $3.30 | – | 6% |
| Fiscal 2026 diluted net income per common shareGAAP | $1.76 | – | – |
| Fiscal 2026 adjusted net income from continuing operationsnon-GAAP | $264.8M | – | 19% |
| Fiscal 2026 adjusted diluted net income per common share from continuing operationsnon-GAAP | $4.48 | – | 18% |
| Fiscal 2026 adjusted EBITDAnon-GAAP | $579.9M | – | 2% |
| Fiscal 2026 net cash provided by operating activitiesGAAP | $373M | – | – |
| Fiscal 2026 free cash flownon-GAAP | $278.4M | – | – |
| Fiscal 2026 net leverageother | 3.89x | – | improved 0.21x versus last year |
| Fourth quarter fiscal 2026 net salesGAAP | $302.9M | – | (11)% |
| Fourth quarter fiscal 2026 gross marginGAAP | −$2.1M | – | (113)% |
| Fourth quarter fiscal 2026 gross margin as a % of salesGAAP | (0.7)% | – | – |
| Fourth quarter fiscal 2026 adjusted gross margin as a % of salesnon-GAAP | (0.7)% | – | – |
| Fourth quarter fiscal 2026 loss from operationsGAAP | −$143M | – | (16)% |
| Fourth quarter fiscal 2026 net loss from continuing operationsGAAP | −$124.2M | – | 2% |
| Fourth quarter fiscal 2026 diluted net loss per common share from continuing operationsGAAP | $(2.14) | – | 3% |
| Fourth quarter fiscal 2026 adjusted diluted net loss per common share from continuing operationsnon-GAAP | $(2.16) | – | (10)% |
| Fourth quarter fiscal 2026 adjusted EBITDAnon-GAAP | −$106.7M | – | (24)% |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| U.S. Consumer reportable segment, fiscal 2026Not separately specified. | $3.02B | – | 1% |
| Other, fiscal 2026Primarily consists of the Company’s consumer lawn and garden business in Canada. | $271.3M | – | 4% |
| U.S. Consumer reportable segment, fourth quarter fiscal 2026Not separately specified. | $279.2M | – | (10)% |
| Other, fourth quarter fiscal 2026Primarily consists of the Company’s consumer lawn and garden business in Canada. | $23.7M | – | (18)% |
Fiscal 2027 outlook
- RevenueNet sales growth of 2% to 4%.
- Gross marginContinued expansion of non-GAAP adjusted gross margin rate.
- NoteNon-GAAP adjusted earnings per share from continuing operations of $4.70 to $4.90.
- NoteFree cash flow of approximately $275 million.
- NoteLeverage ratio declining year over year.
- NoteTarget range of 3.0 to 3.5x by fiscal 2029.
Capital returns
- Dividends paid of $154.8 million for the year ended September 30, 2026, compared with $154.3 million for the year ended September 30, 2025.
- Purchase of Common Shares of $37.7 million for the year ended September 30, 2026, compared with $18.4 million for the year ended September 30, 2025.
What drove it
- Fiscal 2026 net-sales growth was driven by growth in branded products and continued e-commerce expansion.
- GAAP and non-GAAP adjusted gross-margin-rate expansion was driven by continued supply chain savings, favorable mix from higher-margin branded product sales and pricing actions.
- Higher commodity and freight costs partially offset gross-margin improvement.
- GAAP and non-GAAP earnings-per-share improvement was aided by lower interest expense and lower tax rate.
- Fiscal 2027 outlook reflects pricing and innovation, SG&A efficiencies and supply chain savings supported by continued capital reinvestment.
Concerns
- Fourth-quarter fiscal 2026 net sales declined 11% to $302.9 million.
- Fourth-quarter fiscal 2026 gross margin was $(2.1) million and gross margin as a percentage of sales was (0.7)%.
- Fourth-quarter fiscal 2026 loss from operations was $(143.0) million.
- Fiscal 2026 net income declined to $103.9 million from $145.2 million, reflecting $(91.0) million of loss from discontinued operations, net of tax.
- The Company recorded a pre-tax loss of $106.2 million related to the sale of the Hawthorne business in North America during fiscal 2026.
- Fiscal 2026 selling, general and administrative expense increased 5% to $594.7 million, including $13.5 million of IT transformation costs.
- Cash and cash equivalents declined to $7.4 million at September 30, 2026, while long-term debt was $1,992.0 million.
What to watch
- Delivery of fiscal 2027 net sales growth of 2% to 4%.
- Continued expansion of the non-GAAP adjusted gross margin rate amid commodity and freight costs.
- Delivery of fiscal 2027 non-GAAP adjusted EPS from continuing operations of $4.70 to $4.90.
- Delivery of approximately $275 million of fiscal 2027 free cash flow.
- Year-over-year leverage-ratio reduction and progress toward the 3.0 to 3.5x target range by fiscal 2029.
- Execution of the multi-year IT infrastructure transformation, which is expected to be substantially complete during fiscal year 2028 and is planned to involve over $100.0 million of capital expenditures and operating expenses over the course of the project.
Balance sheet and cash flow
- Cash and cash equivalents were $7.4 million at September 30, 2026, compared with $32.8 million at September 30, 2025.
- Current portion of debt was $35.5 million at September 30, 2026, compared with $57.2 million at September 30, 2025.
- Long-term debt was $1,992.0 million at September 30, 2026, compared with $2,049.2 million at September 30, 2025.
- Net cash provided by operating activities was $373.0 million for fiscal 2026, compared with $371.3 million for fiscal 2025.
- Investments in property, plant and equipment were $94.6 million for fiscal 2026, compared with $97.4 million for fiscal 2025.
- Net cash used in financing activities was $276.4 million for fiscal 2026, compared with $294.0 million for fiscal 2025.
- The Company repaid $250.0 million of 5.250% Senior Notes during fiscal 2026.
- Net decrease in cash and cash equivalents was $25.4 million for fiscal 2026, compared with $29.6 million for fiscal 2025.
Analysis
ScottsMiracle-Gro completed fiscal 2026 with modest top-line growth and improved underlying profitability. Net sales increased 1% to $3,288.9 million, driven by branded-product growth and continued e-commerce expansion. U.S. Consumer sales rose 1% to $3,017.6 million and Other sales increased 4% to $271.3 million. The fourth quarter was materially softer, however, as consolidated sales fell 11% to $302.9 million, with U.S. Consumer down 10% and Other down 18%.
Margin performance was the central full-year operating improvement. GAAP gross margin as a percentage of sales increased to 32.3% from 31.3%, while adjusted gross margin as a percentage of sales increased to 32.4% from 31.6%. The Company cited supply chain savings, a more favorable mix of higher-margin branded-product sales and pricing actions, partly offset by higher commodity and freight costs. GAAP income from operations increased 1% to $406.7 million, but SG&A rose 5% to $594.7 million and included $13.5 million of IT transformation costs.
Continuing-operations earnings improved more strongly than sales. GAAP diluted earnings per share from continuing operations rose 6% to $3.30, and adjusted diluted earnings per share from continuing operations rose 18% to $4.48. Lower interest expense and a lower tax rate aided the result. Fiscal-year GAAP net income nevertheless fell to $103.9 million from $145.2 million because discontinued operations produced a $(91.0) million loss, including a $106.2 million pre-tax loss on the sale of the Hawthorne business in North America.
Cash generation was stable and capital allocation included debt reduction, dividends and share repurchases. Operating cash flow was $373.0 million and free cash flow was $278.4 million, compared with $273.9 million in fiscal 2025. The Company repaid $250.0 million of 5.250% Senior Notes, paid $154.8 million of dividends and purchased $37.7 million of common shares. Net leverage improved 0.21x to 3.89x, although cash and cash equivalents declined to $7.4 million and long-term debt remained $1,992.0 million at year-end.
Fiscal 2027 direction calls for 2% to 4% net-sales growth, continued adjusted gross-margin expansion, adjusted EPS from continuing operations of $4.70 to $4.90 and approximately $275 million of free cash flow. Management also expects the leverage ratio to decline year over year and remains on track for a 3.0 to 3.5x range by fiscal 2029. Execution will include pricing, innovation, SG&A efficiencies, supply chain savings and continued capital reinvestment, alongside a multi-year IT transformation expected to be substantially complete during fiscal 2028.
Management, verbatim
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.
Nate Baxter, president and CEO
As we look to fiscal 2027, we have developed a sound plan that relies on what we can control and enables us to navigate a volatile macroeconomic environment while further advancing the building blocks of our SMG 2.0 strategy.
Nate Baxter, president and CEO
We met or exceeded our fiscal 2026 commitments for net sales, gross margin, EPS, free cash flow and leverage ratio.
Mark Scheiwer, chief financial officer and chief accounting officer
Not in the filing
stated, not guessed- Prior fiscal 2026 outlook was not provided, so comparisons of actual results with prior guidance are unavailable.
- Fiscal 2027 GAAP revenue, gross margin, operating expense, tax-rate, operating-income and GAAP EPS guidance were not provided.
- Fiscal 2027 quarterly guidance was not provided.
- Fourth-quarter fiscal 2026 operating cash flow and free cash flow were not provided.
- A fiscal 2026 tax rate and a fiscal 2027 tax-rate outlook were not provided.
- Prior-quarter comparisons for the reported fiscal 2026 and fourth-quarter financial metrics were not provided.
- Separate revenue drivers for the U.S. Consumer and Other segments were not provided.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.