Q4 2024 Scotts Miracle-Gro Co Earnings Call Transcript
Key Points
- The Scotts Miracle Gro Co (SMG) achieved adjusted EBITDA growth of 20% in fiscal '24, reaching $539 million, despite challenging market conditions.
- The company successfully reduced its leverage to 4.86 times EBITDA, showing significant progress in debt management.
- SMG over-delivered on its commitment to generate $1 billion in free cash flow over two years, surpassing inventory reduction targets.
- The company made strategic investments in its brands, sales force, supply chain, and innovation, reinforcing its market position.
- Hawthorne Division achieved consecutive quarters of positive EBITDA for the first time in two years, indicating a successful restructuring effort.
- The Scotts Miracle Gro Co (SMG) faced challenges in securing significant price increases due to sensitive consumer sentiment and retailer margin concerns.
- The company had to discontinue AeroGarden due to its lack of profitability, reflecting difficulties in certain business segments.
- Despite improvements, the company acknowledged that recovering the remaining third of its gross margin loss from the COVID-19 peak will be challenging.
- Hawthorne's sales declined 37% for the full year, highlighting ongoing volatility and challenges in the cannabis-related segment.
- The company anticipates a flat working capital contribution to cash flow in fiscal '25, following significant contributions in the previous two years.
Good morning. Welcome to Scotts Miracle-Gro's Fiscal '24 year-end earnings Webcast. I'm Amy DeLuca, Head of Investor Relations. Speaking today are Chairman, President and CEO, Jim Hagedorn; and Chief Financial and Administrative Officer, Matt Garth. Jim will provide an overall business update, followed by Matt with a review of our financial results.
During our review, we will make forward-looking statements and discuss certain non-GAAP financial measures. Please be aware that our actual results could differ materially from what we share today. Please refer to our SEC filings for details of the risk factors that could impact our results.
Following the webcast, Chief Operating Officer, Nate Baxter; and Hawthorne Division President, Chris Hagedorn will join Jim and Matt for an audio-only Q&A session.
To listen to the Q&A, simply remain on this webcast. To participate, please join by the audio link shared in our press release. As always, today's session will be recorded. An archived version will be published on our website at
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