The Scotts Miracle-Gro Company SMG reported a second-quarter fiscal 2025 (ended March 29, 2025) profit of $217.5 million or $3.72 per share, roughly 38% higher than $157.5 million or $2.74 per share in the prior-year quarter.

Barring one-time items, the adjusted earnings were $3.98 per share compared with $3.69 a year ago, topping the Zacks Consensus Estimate of $3.95.

The company’s net sales in the fiscal second quarter were $1,421 million, which missed the Zacks Consensus Estimate of $1,498.2 million. Net sales declined around 6.8% year over year. U.S. Consumer sales fell as a result of a colder and slower start to the lawn and garden season, pushing some expected second-quarter sales into the third quarter, as well as due to non-recurring fiscal 2024 net sales of bulk raw materials and AeroGarden products.

(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

SMG’s Segment Highlights

In the fiscal second quarter, net sales in the U.S. Consumer division were down 5% year over year to $1,311.5 million, missing our estimate of $1,373.2 million. The segment recorded a profit of $392.5 million, up 2% year over year.

Net sales in the Hawthorne segment tumbled 51% year over year to $32.7 million in the reported quarter, missing our estimate of $70.4 million. The segment reported a loss of $0.9 million. The figure was narrower than the year-ago loss of $3.4 million.

Net sales in the other segment fell 3% year over year to $76.8 million, beating our estimate of $62.3 million. The segment reported a profit of $9 million, up 41%.

SMG’s Financials

At the end of the fiscal second quarter, SMG had cash and cash equivalents of $16.9 million, down around 74% year over year. Long-term debt decreased roughly 9.7% to $2,493.2 million.

SMG’s Outlook

The company reiterated its previously stated guidance for U.S. Consumer segment net sales, adjusted gross margin, adjusted EBITDA and free cash flow. Given the ongoing uncertainty in the cannabis business, the company is no longer issuing full-year revenue guidance for its Hawthorne segment.

SMG’s Price Performance

SMG’s shares are down 23.7% over a year compared with an 10.1% fall recorded by its industry.

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SMG’s Zacks Rank & Key Picks

SMG currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth a look in the basic materials space include Hawkins, Inc. HWKN, SSR Mining Inc. SSRM and Coeur Mining CDE. While HWKN and CDE carry a Zacks Rank #1 (Strong Buy), SSRM has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Hawkins is scheduled to report fiscal fourth-quarter results on May 14. The consensus estimate for Hawkins’ earnings is pegged at 74 cents. HWKN beat the consensus estimate in one of the last four quarters while missing thrice, with the average earnings surprise being 6.1%. 

SSRM is scheduled to release first-quarter results on May 6. The Zacks Consensus Estimate for SSRM’s first-quarter earnings is pegged at 8 cents. SSRM has a trailing four-quarter earnings surprise of 155.7%, on average.  

Coeur Mining is slated to release first-quarter results on May 7. CDE has a trailing four-quarter earnings surprise of 27.9%, on average.  

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The Scotts Miracle-Gro Company (SMG) : Free Stock Analysis Report

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