NYSE:SMG
SCOTTS MIRACLE-GRO CO
A leading global provider of plant nutrition products, fertilizers, and gardening supplies backed by proprietary technology and a robust distribution network.
Key Metrics
Investment Thesis
Bull Case
Investors may find value in this turnaround story where operating profit reached $358.6M and free cash flow generation is robust enough to support dividend payments of $154.3M. The recovery from a multi-year loss streak suggests improving margin quality and effective cost management under the current leadership. Proprietary technology moats provide pricing power in a recession-resistant consumer discretionary sector.
Bear Case
The balance sheet remains fragile with negative shareholders' equity of -$357.5M and long-term debt of $2.05B, limiting financial flexibility for future growth. Interest expense of $128.8M heavily drags on profitability, leaving little room for error in a rising rate environment. Historical losses in 2023 and 2024 raise concerns about the sustainability of current earnings without further deleveraging or major strategic shifts.
About SCOTTS MIRACLE-GRO CO
Scotts Miracle-Gro Company is a premier provider of plant nutrition and gardening products serving residential and professional markets globally. The company specializes in premium soil amendments, fertilizers, and garden tools, leveraging its proprietary technology to deliver superior crop yields. With a strong focus on brand loyalty and distribution efficiency, it dominates the lawn care and home gardening sectors.
Analysis
Management Discussion
The company achieved a notable turnaround in 2025 with net income reaching $145.2M after years of losses, driven by operational efficiencies and revenue stabilization at $3.41B. Cash flow from operations surged to $371.3M, indicating strong liquidity generation despite high capital expenditures of $97.4M and substantial interest expenses of $128.8M. However, the net cash position declined by $35M due to significant financing outflows, suggesting active debt restructuring or strategic acquisitions.
Industry Overview
The global plant nutrition industry is experiencing steady growth driven by urbanization, aging populations seeking gardening hobbies, and climate-resilient farming solutions. Competition is fierce among legacy brands and private label store brands, yet technological differentiation in soil science remains a key barrier to entry. Consumers increasingly demand organic options and digital engagement through mobile apps for product tracking.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $3.55B | $3.55B | $3.41B |
| Cost of Revenue | $2.71B | $2.62B | $2.35B |
| Gross Profit | $657.3M | $850.5M | $1.04B |
| Operating Expenses | $831.7M | $641.7M | $685.6M |
| Operating Income | $-174.4M | $208.8M | $358.6M |
| R&D | $35.7M | $34.6M | $34.8M |
| G&A | $551.3M | $559.0M | $603.4M |
| Stock-Based Comp | $68.9M | $80.4M | $69.0M |
| D&A | $92.5M | $80.6M | — |
| Depreciation | $67.3M | $64.9M | $62.7M |
| Amortization | $25.2M | $15.7M | $12.3M |
| Other OpEx | $244.7M | $48.1M | $47.4M |
| Non-Operating Income | $-278.9M | $-232.4M | $-136.9M |
| Interest Expense | $178.1M | $158.8M | $128.8M |
| Pre-Tax Income | $-453.3M | $-23.6M | $221.7M |
| Income Tax | $-73.2M | $11.3M | $76.5M |
| Continuing Ops | $-380.1M | $-34.9M | $145.2M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $-380.1M | $-34.9M | $145.2M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $-380.1M | $-34.9M | $145.2M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $1.40B | $980.4M | $940.3M |
| Cash & Equivalents | $31.9M | $71.6M | $36.6M |
| Accounts Receivable | $304.2M | $176.8M | $186.9M |
| Inventory | $880.3M | $587.5M | $592.8M |
| Prepaid Expenses | $181.4M | $144.5M | $124.0M |
| Other Current Assets | $0 | $0 | $0 |
| Long-Term Assets | $2.02B | $1.89B | $1.80B |
| PP&E (Net) | $610.3M | $609.5M | $631.6M |
| Intangibles | $436.7M | $418.8M | $401.8M |
| Goodwill | $243.9M | $243.9M | $243.9M |
| Operating Leases | $262.6M | $265.4M | $256.3M |
| Other LT Assets | $370.5M | $308.7M | $214.5M |
| Total Assets | $3.41B | $2.87B | $2.74B |
| Current Liabilities | $773.7M | $750.3M | $739.7M |
| Accounts Payable | $271.2M | $254.7M | $229.2M |
| Current Debt | $52.3M | $52.6M | $57.2M |
| Current Leases | $76.4M | $75.3M | $71.6M |
| Taxes Payable | $28.5M | $16.7M | $16.6M |
| Other Current Liab | $345.3M | $351.0M | $365.1M |
| Long-Term Liabilities | $2.91B | $2.51B | $2.36B |
| Long-Term Debt | $2.56B | $2.17B | $2.05B |
| LT Operating Leases | $220.1M | $215.8M | $202.2M |
| Other LT Liab | $129.8M | $122.2M | $108.4M |
| Total Liabilities | $3.68B | $3.26B | $3.10B |
| Shareholders' Equity | $-267.3M | $-390.6M | $-357.5M |
| Paid-In Capital | $353.1M | $362.0M | $351.6M |
| Retained Earnings | $490.9M | $303.8M | $294.7M |
| AOCI | $-112.8M | $-107.3M | $-109.7M |
| Treasury Stock | $998.5M | $949.1M | $894.1M |
| Total L&E | $3.41B | $2.87B | $2.74B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $-380.1M | $-34.9M | $145.2M |
| Non-Cash Adjustments | $1.53B | $1.36B | $327.7M |
| Working Capital Changes | $-617.7M | $-659.6M | $-101.6M |
| Cash from Operations | $531.0M | $667.5M | $371.3M |
| Capital Expenditures | $92.8M | $84.0M | $97.4M |
| Cash from Investing | $-65.7M | $-100.4M | $-112.1M |
| Share Buybacks | $9.3M | $5.1M | $18.4M |
| Dividends Paid | $149.1M | $151.3M | $154.3M |
| Cash from Financing | $-520.1M | $-527.9M | $-294.0M |
| FX Effect | $-100.0K | $500.0K | $-200.0K |
| Net Change in Cash | $-54.9M | $39.7M | $-35.0M |
| Beginning Cash | $86.8M | $31.9M | $71.6M |
| Ending Cash | $31.9M | $71.6M | $36.6M |
Frequently Asked Questions
How does SCOTTS MIRACLE-GRO CO make money?
Residential garden centers providing bags, soil, and tools; professional turf and landscape markets for commercial growers; agricultural production offering crop-specific solutions; and international operations serving emerging markets with localized product portfolios.
What are the main risks for SMG?
Significant debt burden with total liabilities exceeding assets, creating refinancing risks in a high-interest environment; sensitivity to raw material price volatility affecting cost of revenue margins; regulatory changes regarding fertilizer ingredients; and economic downturns reducing discretionary spending on gardening products.
What is SMG's competitive advantage?
Proprietary plant nutrition technologies that enhance growth and yield efficiency; a massive direct-to-consumer distribution network reaching millions of retail locations; and a powerful brand portfolio trusted by home gardeners and professional landscapers alike.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.