Q2 2025 Scotts Miracle-Gro Co Earnings Call Transcript
Key Points
- The Scotts Miracle Gro Co (SMG) reaffirmed its full-year guidance of $570 to $590 million of EBITDA, indicating confidence in its financial outlook.
- The company reported a nearly 500 basis-point recovery in gross margin and a $36 million EBITDA increase, showcasing significant financial improvement.
- SMG achieved a 12.1% increase in POS units, with notable growth in its garden and mulch businesses, reflecting strong consumer demand.
- The company is making strategic investments in innovation, such as expanding the Miracle-Gro organic line and introducing new products in the controls portfolio.
- SMG is on track to achieve more than $75 million in supply chain cost savings this year, contributing to its long-term goal of $150 million by fiscal '27.
- Total company net sales declined by 7% in the quarter, with US consumer net sales down 5%, partly due to a colder start to the lawn and garden season.
- Hawthorne's net sales declined 51% due to hydroponic market softness and strategic exits from low-margin distribution, impacting overall revenue.
- The company faces challenges in communicating its value proposition to the investment community, as reflected in its current equity price.
- SG&A expenses increased by 5% in the quarter, driven by higher performance-based incentives and investments in technology and e-commerce.
- The company is experiencing a competitive consumer landscape, with heavy retailer promotions impacting the difference between POS dollars and units.
Good morning. Welcome to Scotts Miracle-Gro's second-quarter 2025 earnings webcast. I'm Brad Chelton, Head of Investor Relations. Speaking today are Chairman and CEO, Jim Hagedorn; and Chief Financial Officer and Chief Accounting Officer, Mark Scheiwer. Jim will provide a business update followed by Mark with a review of our financial results.
In conjunction with our commentary today, please review our earnings release and supplemental financial presentation slides, which were published on our website at investor.scotts.com prior to this webcast. 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 Form 10-K filed with the SEC for details of the full range of risk factors that could impact our results.
Following the webcast, President and Chief Operating Officer Nate Baxter; and Executive Vice President and Chief of Staff
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