Scotts Miracle-Gro Margins Outpace Sales Growth
Lawn and garden suppliers should watch commodity and freight costs that offset the company's supply chain and pricing gains.
Updated on Nov. 4, 2026 in Corporate Finance
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The Scotts Miracle-Gro Company reported fiscal 2026 results, with net sales of $3.29 billion, up 1% year over year, and issued fiscal 2027 guidance calling for net sales growth of 2% to 4%. Operators in lawn and garden supply and home-garden retail should note the company's full-year profitability and cash flow picture heading into the new year.
Why it matters
Adjusted earnings per share rose 18% while GAAP EPS rose 6%, and management credited supply chain savings, branded-product mix, and pricing, partly offset by higher commodity and freight costs. The gap between adjusted and GAAP results and the softer fourth quarter show that margin gains are not yet uniform across the year.
Fiscal 2026 net sales reached $3.29 billion, with non-GAAP adjusted gross margin at 32.4% versus GAAP at 32.3%, and free cash flow of $278.4 million. Net leverage improved 0.21x to 3.89x from the prior year.
The players
The Scotts Miracle-Gro Company
A Marysville, Ohio-based marketer of lawn and garden products, including branded consumer fertilizers, grass seed, and growing supplies sold through mass retail and home-improvement channels.
The details
Gross margin expansion came from continued supply chain savings, a favorable mix shift toward higher-margin branded products, and pricing actions. Those gains were partly offset by higher commodity and freight costs, which matter for any business that buys bulk materials or ships heavy goods. Earnings per share growth was also helped by lower interest expense and a lower tax rate, meaning part of the improvement reflects financing and tax conditions rather than operations alone.
Timeline
September 30, 2026: End of the fiscal 2026 reporting period.
November 4, 2026: Fiscal 2026 results announced and conference call held.
Fiscal 2029: Targeted net leverage ratio of 3.0 to 3.5x.
Market Landscape
Net sales grew only 1% in fiscal 2026 while adjusted earnings rose 18%, a spread that shows the company leaning on margin levers rather than volume. Fiscal 2027 guidance of 2% to 4% sales growth keeps that approach in place, with leverage targeted between 3.0 and 3.5x by fiscal 2029.
Operators in lawn, garden, and consumer-products supply should watch input costs for commodities and freight, which the company identified as offsetting margin gains. Firms with significant debt should note that lower interest expense helped this year's earnings, so rate changes will matter for comparable results.
The takeaway
Track gross margin against commodity and freight cost trends in your own purchasing, since those were the main offsets to pricing and supply chain gains. Review your debt terms in light of the company's targeted leverage range, and consult a qualified accountant before drawing conclusions about your own financing costs.
Further reading
For more on how public companies report and guide their results, explore Corporate Finance coverage.
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