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Mar 29
Scotts Q2 2025 Earnings Report
Reported second quarter 2025 results with improved gross margin and EBITDA growth.
Key Takeaways
ScottsMiracle-Gro reported a decrease in total company sales for the second quarter of fiscal 2025, primarily due to a colder start to the lawn and garden season and non-repeating sales from the prior year. However, the company saw significant improvement in both GAAP and non-GAAP adjusted gross margins, driven by lower costs and better product mix. This margin recovery led to an increase in non-GAAP adjusted EBITDA and a substantial improvement in net income compared to the prior year. The company reaffirmed its full-year guidance for the U.S. Consumer segment, adjusted gross margin, adjusted EBITDA, and free cash flow.
Total Company sales for Q2 2025 were $1.42 billion, a 7% decrease from the prior year.
GAAP gross margin rate improved to 38.6% and non-GAAP adjusted gross margin rate improved to 39.1% in Q2 2025.
GAAP net income for Q2 2025 was $217.5 million ($3.72 per diluted share), a significant increase from the prior year.
Non-GAAP adjusted EBITDA for Q2 2025 increased to $402.8 million.
Scotts
Scotts
Scotts Revenue by Segment
Revenue by Segment
U.S. Consumer Segment Revenue
CapyFin.comHawthorne Segment Revenue
CapyFin.comOther Segment Revenue
CapyFin.com Forward Guidance
The Company reaffirms its previously announced U.S. Consumer segment net sales, adjusted gross margin, adjusted EBITDA and free cash flow guidance. They are no longer providing full-year revenue guidance for the Hawthorne segment due to the uncertain environment in the cannabis industry.
Positive Outlook
- Reaffirmed full-year U.S. Consumer segment net sales guidance.
- Reaffirmed full-year consolidated adjusted gross margin guidance.
- Reaffirmed full-year adjusted EBITDA guidance.
- Reaffirmed full-year free cash flow guidance.
- Continued focus on sustainable net sales growth, margin recovery, and a stronger balance sheet.
Challenges Ahead
- No longer providing full-year revenue guidance for the Hawthorne segment.
- Uncertain environment in the cannabis industry impacting the Hawthorne segment.
- Some expected second quarter sales pushed into the third quarter due to colder weather.
- Impact of non-repeating fiscal 2024 net sales on current year sales.
- Potential adverse effects from economic downturn and uncertainty on demand.
Revenue & Expenses
Visualization of income flow from segment revenue to net income