SMG is executing on its SMG 2.0 strategy with improving leverage and raised guidance, supporting a positive outlook. Monitor Iran conflict impacts on freight/commodity costs and the pace of gross margin recovery toward the 32%+ target. The net leverage trajectory (3.78x) and free cash flow guidance of $275M provide a clear path to investment-grade credit metrics.
Price Chart
Executive Summary
Scotts Miracle-Gro reported Q3 fiscal 2026 non-GAAP adjusted EPS of $2.82, beating consensus of $2.52 by 11.9%, while revenue of $1.172B was slightly above estimates. The company raised its full-year non-GAAP EPS guidance to $4.30-$4.45 (from $4.15-$4.35), reflecting accelerating earnings power and successful margin management despite 90bps gross margin compression from higher freight and commodity costs related to the Iran conflict.
Key Financial Metrics
Key Facts
- Non-GAAP adjusted diluted EPS from continuing operations $2.82 vs consensus $2.52 (+11.9% beat), up 8% YoY from $2.62
- Revenue $1,172.1M, +1% YoY (consensus ~$1.17B), essentially in line
- Full-year non-GAAP adjusted EPS guidance raised to $4.30-$4.45 from $4.15-$4.35
- GAAP diluted EPS $1.75, down 34% YoY due to $63.9M in impairment/restructuring/other adjustments
- Net leverage ratio improved to 3.78x, down 0.37x vs prior year
- Gross margin rate GAAP 31.2% (down 90bps), adjusted 31.3% (down 100bps) driven by freight and commodity cost inflation
- Completed divestiture of Hawthorne business (discontinued ops) on April 8, 2026; classified as held for sale
- Adjusted EBITDA $246.3M, down 3% YoY; nine-month adjusted EBITDA $686.6M, +5% YoY
- Free cash flow guidance reaffirmed at $275M for fiscal 2026
Financial Impact
Non-GAAP EPS beat consensus by $0.30 (+11.9%), full-year EPS guidance raised by $0.15 at midpoint; ongoing gross margin pressure partially offset by SG&A leverage and lower tax rate (27-28% vs 29%)
Risk Factors
- GAAP EPS declined 34% due to one-time impairment/restructuring charges, obscuring underlying trend
- Gross margin compression from higher freight and commodity costs due to Iran conflict
- Net leverage at 3.78x remains elevated despite improvement; debt reduction is key to equity value
- Discontinued operations (Hawthorne) generated a $93.3M net loss through nine months
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0000825542-26-000036 |
| Document: smg-20260729.htm | 0000825542-26-000036 |
| Document: 0000825542-26-000036-index-headers.html | 0000825542-26-000036 |
| Document: 0000825542-26-000036-index.html | 0000825542-26-000036 |
| Document: 0000825542-26-000036.txt | 0000825542-26-000036 |
| 8-K Data (Synthetic) | 0000825542-26-000036 |
Track record builds as more directional reports settle.
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Sep 15, 2026 17d ago | 8-K | $56.09 $52.36 | ▼ −6.65% | ▼ −7.47% | $49.02 (−12.60%) |
Sep 11, 2026 21d ago | 8-K | $55.91 $51.42 | ▼ −8.03% | ▼ −8.14% | $49.02 (−12.32%) |
Aug 27, 2026 5w ago | 8-K | $60.59 $59.29 | ▼ −2.15% | ▼ −2.41% | $49.02 (−19.10%) |
Aug 11, 2026 7w ago | Insider Cluster | $62.03 $59.55 | ▼ −4.00% | ▼ −3.59% | $49.02 (−20.97%) |
Aug 5, 2026 8w ago | Insider Cluster | $66.13 $62.17 | ▼ −5.99% | ▼ −6.34% | $49.02 (−25.87%) |
Jul 29, 2026 9w ago | 8-K | $70.33 $66.13 | ▼ −5.97% | ▼ −11.50% | $49.02 (−30.30%) |
Jun 4, 2026 17w ago | Court Ruling | $56.83 $61.88 | ▲ +8.89% | ▲ +11.44% | $49.02 (−13.74%) |
Apr 29, 2026 22w ago | Press Release | $61.73 $62.15 | ▲ +0.69% | ▼ −2.42% | $49.02 (−20.58%) |
Apr 22, 2026 23w ago | Press Release | $64.33 $62.42 | ▼ −2.97% | ▼ −4.45% | $49.02 (−23.80%) |
Apr 20, 2026 23w ago | Press Release | $64.37 $65.38 | ▲ +1.57% | ▲ +0.49% | $49.02 (−23.85%) |
US Market Status
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