Scotts Miracle-gro Company (the) · NYSE:SMG
Scotts Miracle-gro Company (the) — Q2 2025 Earnings Presentation
28 slides from Scotts Miracle-gro Company (the)'s earnings presentation, Apr 30, 2025
Slide 1: Second Quarter Quarterly Earnings Report
Second Quarter ended March 29, 2025 Quarterly Earnings Report Supplemental Financial Presentation April 30, 2025 Please view this presentation in conjunction with our Q2 2025 earnings release, which is furnished on Form 8-K, our related pre-recorded remarks and additional information regarding our n
Slide 2: Safe Harbor Disclosure
Safe Harbor Disclosure Statements contained in this presentation, which address activities, events and developments that the Company expects or anticipates will or may occur in the future, including, but not limited to, information regarding the future economic performance and financial condition of
Slide 3: Today's speakers
Today’s speakers Jim Hagedorn Chairman and Chief Executive Officer Mark Scheiwer Chief Financial Officer and Chief Accounting Officer 3
Slide 4: Q&A
Q&A A Q&A session will follow the earnings webcast at approximately 9:30 a.m. ET Jim Hagedorn Nate Baxter Mark Scheiwer Chris Hagedorn Chairman & CEO President & COO CFO & CAO EVP, Chief of Staff to Chairman & CEO Review the press release for registration details. ● To listen to the Q&A, please rema
Slide 5: Q2 2025 Business Update
Q2 2025 Business Update PRESENTED BY Jim Hagedorn Chairman and Chief Executive Officer 5
Slide 6: Our Core Convictions
OUR CORE CONVICTIONS. We Muat... POSSESS A DEEP UNDERSTANDING OF OUR CONSUMER AND INSTILL A LOVE OF GARDENING IN EVERY GENERATION. BE STEWARDS OF OUR BRANDS. THEY ARE THE CORE OF QUR BUSNESS PROVIDE CONSUMERS WITH INNOVATIVE AND SUSTAINABLE PRODUCTS THAT MAKE GARDENING EASTER, MORE ACCESSIBLE AND NO
Slide 7: Transforming our business: mid-range strategic focus areas
MID-RANGE (END OF FY27) STRATEGIC FOCUS AREAS. We are transforming our business by investing in our key competitive advantages and evolving into a consumer marketing powerhouse to propel our growth and maintain cost advantages ● Averaging 3 percent annually ● Focused on our consumer lawn & garden bu
Slide 8: Invest behind our brands to support long term brand health
Fiscal 2025. Invest behind our brands to support long term brand health Supported by incremental investments in our brands and more than 10% of net sales going to customer activation & other programs run by our retail partners Listings & New Innovation Channel Expansion Media & Consumer Share of She
Slide 9: Shift to educate consumers on the importance of regular feeding
Fiscal 2025. Shift to educate consumers on the importance of regular feeding FROM: TO: Single-Bag Solutions Scotts Turf Builder Program To treat specific problems To get a thick, healthy lawn 9
Slide 10: Incremental investments in advertising across multiple channels
Fiscal 2025. Incremental investments in advertising across multiple channels +6% +5% +100% Flat +40% Media Media Media Media Media Investment Investment Investment Investment Investment FY24 to FY25 FY24 to FY25 FY24 to FY25 FY24 to FY25 FY24 to FY25 10
Slide 11: Q2 2025 Financial Update
Q2 2025 Financial Update PRESENTED BY Mark Scheiwer Chief Financial Officer and Chief Accounting Officer 11
Slide 12: Second Quarter Performance Summary
2Q 2025 - 3 Months ended March 29, 2025. Second Quarter Performance Summary Total Company Non-GAAP Results vs. Q2 2024 Net Sales $1.42 billion -7% Adjusted Gross Margin Rate 39.1% +380 bps SG&A $188.3 million +5% Adjusted Net Income $232.2 million vs. $211.9M Interest Expense $36.6 million -17% Adju
Slide 13: Financial objectives for fiscal 2025 are on track
Fiscal 2025. Financial objectives for fiscal 2025 are on track Invest Behind Our Brands Drive Margin Recovery Strengthen Balance Sheet ● Maintain and build upon the ● $150 million of supply chain ● $250 million expected free cash additional listings and gains cost savings over 3 years; flow achieved i
Slide 14: Net sales performance for the quarter and year-to-date
2Q 2025 - 3 and 6 Months ended March 29, 2025. Net sales performance for the quarter and year-to-date In millions In millions - 5% - 1% - 1% - 3% - 1% - 1% 7% Decrease 5% Decrease Quarter Drivers Full Year Drivers ● Vol/Mix - Due to ● Price - Reflects the ● Other - Non-repeating ● Vol/Mix - Due to ●
Slide 15: Net sales performance by segment
2Q 2025 - 3 and 6 Months ended March 29, 2025. Net sales performance for the quarter and year-to-date by segment Fiscal Second Quarter (January - March 2025) Fiscal Year-to-Date (October 2024 - March 2025) Net Sales Volume & Foreign Price(2) Other(3) Net Sales Net Sales Volume & Foreign Price(2) Oth
Slide 16: Drive margin recovery through cost savings and material cost deflation
2Q 2025 - 3 Months and 6 Months ended March 29, 2025. Drive margin recovery through cost savings and material cost deflation + 380 bps + 490 bps Quarter and Full Year Drivers ~2/3 of ~$75M of U.S. Consumer supply chain Distribution savings related to network Favorable mix from Hawthorne’s exit of dis
Slide 17: Strengthen Balance Sheet through further leverage improvement
Fiscal 2025. Strengthen Balance Sheet through further leverage improvement 17 Non-GAAP Measures.
Slide 18: Historical YoY POS Unit growth shows recession resistance
Fiscal 2025. Historical YoY POS Unit growth shows SMG’s recession resistance U.S. Consumer Historical POS Unit YoY Growth Full Year Expectations Recession periods Non-recession periods Covid correction periods ● POS units +12.1% through March; +4.4% ~4% excluding mulch Average POS YoY unit growth ov
Slide 19: Lawn & Garden industry has low exposure to private label
Fiscal 2025. Lawn & Garden industry has low exposure to private label Private Label Unit Share of Lawn & Garden Industry POS Units Time Frame - Full Calendar Year 19 Definition - Lawns, Gardens and Controls
Slide 20: Continued improvement in adjusted gross margin
Fiscal 2025. Continued improvement in adjusted gross margin Full Year Expectations ● Improvement of ~370 bps or more vs. FY24 ~ ● ~$75 million of full year U.S. Consumer supply chain savings; ~1/3 is related to material cost deflation, most of which was realized in 1H25 ● Distribution savings from Ha
Slide 21: Limited exposure to tariffs
Fiscal 2025. Limited exposure to tariffs Full Year Expectations Percent of Total FY25 COGS Exposed to Tariffs ● Limited exposure in FY25 as ~80% of commodities are locked for the year as of ~10% the end of 2Q25 Internationally ● ~10% of FY25 total COGS is internationally Sourced sourced and potentia
Slide 22: Our Fiscal 2025 Guidance
Fiscal 2025. Our Fiscal 2025 Guidance ● US Consumer: Low single-digit growth (excluding impact of non-repeat Net Sales sales from FY24 for AeroGarden and other bulk raw material sales) Adjusted Gross Margin Rate ● ~30% SG&A ● ~17% of Total Company net sales Other Expense ● ~$10 million increase Inte
Slide 23: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 23
Slide 24: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Use of Non-GAAP Measures To supplement the financial measures prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company uses non-GAAP financial measures. The reconciliations of these non-GAAP financial measures to the m
Slide 25: Definitions of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Definitions of Non-GAAP Financial Measures The reconciliations of non-GAAP disclosure items include the following financial measures that are not calculated in accordance with GAAP: ● Adjusted gross margin: Gross margin excluding impairment, restructuring
Slide 26: Reconciliation of Non-GAAP Financial Measures
2Q 2025 - 3 Months ended March 29, 2025. Reconciliation of Non-GAAP Financial Measures 26
Slide 27: Reconciliation of Non-GAAP Financial Measures
2Q 2025 - 6 Months ended March 29, 2025. Reconciliation of Non-GAAP Financial Measures 27
Slide 28: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures For the three and six months ended March 29, 2025, the following items were adjusted, in accordance with the definitions above, to arrive at the non-GAAP financial measures: ● During the three and six months ended March 29, 2025, the Company incurred emplo
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