Scotts Miracle‑Gro Company reported fiscal second‑quarter 2026 results that exceeded expectations. Net sales reached $1.459 billion, a 5 % year‑over‑year increase, while adjusted earnings per share climbed to $4.53, beating the consensus estimate of $4.02. Gross margin expanded to 41.8 %, a 200‑basis‑point lift that aligns with the 280‑basis‑point improvement reported on a GAAP basis and the 240‑basis‑point improvement on a non‑GAAP basis. The company reaffirmed its fiscal‑2026 guidance, maintaining an adjusted EPS range of $4.15 to $4.35 per share.
The margin expansion was driven by pricing power and a shift toward higher‑margin branded products. Management also highlighted disciplined cost control and the successful hedging of roughly 80 % of commodity exposure, which helped mitigate the impact of volatile raw‑material prices. The elimination of the Hawthorne cannabis business further sharpened the product mix and contributed to the higher gross margin.
Compared with the same quarter last year, EPS rose from $4.00 to $4.53, and net sales grew 5 %. The company’s leverage ratio improved from 4.41× to 3.71×, reflecting a reduction in debt relative to earnings. In the first quarter of fiscal 2026, the company posted a loss of $0.77 per share, underscoring the turnaround momentum that is now evident in Q2.
Scotts is executing its SMG 2.0 strategy, targeting $1 billion of incremental sales by 2030 through e‑commerce expansion, product innovation, and operational efficiencies. The company continues to return capital to shareholders with a $500 million share‑repurchase program and a quarterly dividend of $0.66 per share, yielding roughly 4 %. The focus on the core U.S. Consumer lawn and garden franchise remains central to the company’s growth plan.
Jim Hagedorn, Chairman and CEO, said, “Our performance reflects progress on all our financial imperatives. We continued our growth trajectory and delivered meaningful leverage ratio improvement, putting us in position for more shareholder friendly actions including the previously announced multi‑year share repurchase program. At the same time, we are reinvesting in our consumer franchise with a focus on achieving our fiscal 2026 guidance that is foundational to our longer‑range financial targets.” CFO Mark Scheiwer added, “We are pleased with our first quarter results, which align with our financial commitments and demonstrate that we are tracking well to our fiscal 2026 guidance. We met or exceeded key metrics and remain strategically focused on balancing investments in growth drivers with leverage improvement and other actions to further strengthen our capital structure.” Hagedorn also noted, “We are in a very good position when it comes to our cost of goods for fiscal 2026 and are fully confident that we will deliver on our gross margin recovery and growth plans. We do not expect supply or sourcing issues, and any fluctuations in commodities that we may encounter through the remainder of our fiscal year are manageable.”
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