Scotts Miracle-Gro Q1 Earnings Beat Expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1d ago
0mins
Source: seekingalpha
- Earnings Beat: Scotts Miracle-Gro reported a Q1 non-GAAP EPS of -$0.77, beating expectations by $0.23, indicating resilience despite challenges in the market.
- Revenue Decline: The company generated $354.4 million in revenue, a 3.3% year-over-year decrease, missing estimates and reflecting intensified market competition and weak consumer demand.
- Margin Improvement: The non-GAAP adjusted gross margin rate improved to 25.4%, up 90 basis points from the previous year, showcasing effective cost management and pricing strategies that enhance profitability.
- Share Repurchase Program: The Board approved a $500 million share repurchase program aimed at boosting shareholder value and market confidence, which is expected to have a positive impact on the stock price.
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Analyst Views on SMG
Wall Street analysts forecast SMG stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for SMG is 64.09 USD with a low forecast of 51.37 USD and a high forecast of 74.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
5 Analyst Rating
4 Buy
1 Hold
0 Sell
Strong Buy
Current: 62.800
Low
51.37
Averages
64.09
High
74.00
Current: 62.800
Low
51.37
Averages
64.09
High
74.00
About SMG
The Scotts Miracle-Gro Company is a manufacturer and marketer of branded consumer products for lawn and garden care. The Company's segments include United States (U.S.) Consumer, Hawthorne and Other. The U.S. Consumer segment consists of its consumer lawn and garden business in the United States. Its consumer lawn and garden brands include Scotts and Turf Builder lawn fertilizer and Scotts grass seed products; Miracle-Gro soil, plant food and gardening products; Ortho herbicide and pesticide products, and Tomcat rodent control and animal repellent products. The Hawthorne segment is engaged in providing nutrients, lighting and other materials used for indoor and hydroponic gardening in North America. Its key brands include General Hydroponics, Gavita, Botanicare, Agrolux, Gro Pro, Mother Earth, Grower’s Edge, HydroLogic Purification System and CYCO. The Other segment primarily consists of its consumer lawn and garden business in Canada.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Scotts Miracle-Gro to Announce Q1 Earnings on January 28
- Earnings Announcement: Scotts Miracle-Gro is set to release its Q1 2023 earnings on January 28 before market open, with consensus EPS estimate at -$1.00, reflecting a 12.4% year-over-year decline, and revenue estimate at $357.62 million, down 14.2% year-over-year.
- Historical Performance: Over the past two years, Scotts Miracle-Gro has beaten EPS estimates 100% of the time and revenue estimates 50% of the time, indicating a degree of financial stability in its performance.
- Estimate Adjustments: In the last three months, there have been no upward revisions to EPS estimates, with five downward revisions, and similarly, revenue estimates have seen five downward adjustments, suggesting market caution regarding the company's future performance.
- Strategic Transformation Goals: Scotts Miracle-Gro aims for an EPS target of $4.15 to $4.35 by 2026, indicating a strategic pivot towards branded growth and AI-driven innovation to enhance its competitive position in the market.
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Scotts Miracle-Gro Reports Wider Q1 Loss, Maintains Full-Year Growth Targets
- Financial Decline: Scotts Miracle-Gro reported a net loss of $125 million in Q1 2026, translating to a loss of $2.16 per share, which is significantly worse than the $69.5 million loss reported in the same quarter last year, indicating revenue weakness during the typical slow season.
- Divestiture of Cannabis Business: The company classified its Hawthorne Gardening cannabis unit as discontinued operations, reporting losses of $77.2 million, sharply up from $3.4 million a year earlier, highlighting increased volatility in this segment.
- Sales Drop: Quarterly sales fell by 3% to $354.4 million, missing the consensus estimate of $358 million, suggesting challenges in a competitive market environment.
- Stable Outlook: Despite short-term challenges, Scotts reaffirmed its fiscal year outlook ending September 2026, projecting adjusted earnings from continuing operations between $4.15 and $4.35 per share, demonstrating confidence in future growth.
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