ScottsMiracle-Gro Lifts Full-Year EPS Outlook After Q3 Beat; New CEO Wins Family Backing
SMG sits 34% above its 52-week low of $52.
Summary
ScottsMiracle-Gro posted Q3 adjusted EPS of $2.82, beating estimates, and raised its full-year adjusted EPS guidance to $4.30–$4.45. The largest shareholder publicly backed new CEO Nate Baxter, and leverage improved to 3.78x.
Key Events · Earnings and Guidance · SMG
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Q3 Adjusted EPS Beats, Guidance Raised
Non-GAAP adjusted diluted EPS from continuing operations came in at $2.82, an 8% increase year-over-year and above the $2.62 consensus. Full-year adjusted EPS guidance was raised to $4.30–$4.45 from $4.15–$4.35.
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Gross Margin Pressure from Iran Conflict
GAAP gross margin of 31.2% and non-GAAP adjusted gross margin of 31.3% declined 90 and 100 basis points year-over-year, respectively, driven by higher freight and commodity costs. Full-year adjusted gross margin guidance is maintained at at least 32%.
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Largest Shareholder Endorses New CEO
The Hagedorn Partnership, L.P., the largest shareholder, publicly expressed support for new CEO Nate Baxter, who assumed the role on June 29, 2026, removing uncertainty around the leadership transition.
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Balance Sheet Strengthens
The net leverage ratio improved to 3.78x from 4.15x a year ago. Free cash flow guidance of $275 million for the full year remains on track.
Analysis · SMG · Industrial Applications And Services
A third-quarter adjusted EPS of $2.82, topping the $2.62 consensus, allowed ScottsMiracle-Gro to raise its full-year adjusted EPS guidance to $4.30–$4.45 from $4.15–$4.35. The upward revision reflects robust operating performance, a lower tax rate, and contributions from the Bonnie Plants joint venture. Gross margin contracted 100 basis points as higher freight and commodity costs tied to the Iran conflict weighed on results, yet the company still expects a full-year adjusted gross margin of at least 32%. In a move that removes a key overhang following the recent leadership transition, the Hagedorn Partnership—the largest shareholder—publicly endorsed new CEO Nate Baxter. The balance sheet continues to strengthen, with leverage falling to 3.78x. This is a solid quarter that reinforces the turnaround narrative, though the 34% decline in GAAP EPS reflects ongoing restructuring and impairment charges.
At the time of this filing, SMG was trading at $69.87 on NYSE in the Industrial Applications And Services sector, with a market capitalization of approximately $4.3B. The 52-week trading range was $52.00 to $75.34. This filing was assessed with positive market sentiment and an importance score of 7 out of 10.