The Scotts Miracle-Gro Company (SMG) Bundle
A Brief History of Scotts Miracle-Gro Company
The Scotts Miracle-Gro Company, listed on the NYSE as SMG, has established itself as the world’s largest marketer of branded consumer lawn and garden products. As of 2024, the company has undergone significant transformations aimed at improving its financial health and operational efficiency.
Financial Performance Overview
For the fiscal year ending September 30, 2024, Scotts Miracle-Gro reported total net sales of approximately $3.6 billion, reflecting a marginal increase from $3.55 billion in the previous year. The U.S. Consumer segment saw growth, with sales rising by 6% to $3.0 billion, driven by enhanced shelf space and effective promotions in garden and control products. Conversely, the Hawthorne segment experienced a sharp decline, with sales dropping 37% to $294.7 million due to the cessation of its third-party distribution business.
| Financial Metrics | FY 2024 | FY 2023 | % Change |
|---|---|---|---|
| Total Net Sales | $3.6 billion | $3.55 billion | — |
| U.S. Consumer Segment Sales | $3.0 billion | $2.83 billion | +6% |
| Hawthorne Segment Sales | $294.7 million | $467.3 million | -37% |
| Gross Margin (GAAP) | 23.9% | 18.5% | +29% |
| GAAP Net Loss | $34.9 million | $380.1 million | -91% |
| Diluted Net Loss per Share | $0.61 | $6.79 | -91% |
Quarterly Performance Insights
In the fourth quarter of fiscal 2024, Scotts Miracle-Gro reported net sales of $414.7 million, an 11% increase compared to $374.5 million in the same quarter of the previous year. The U.S. Consumer segment showed a remarkable 54% increase, totaling $309.7 million, while the Hawthorne segment's sales plummeted by 46% to $80.5 million.
| Quarterly Metrics | Q4 FY 2024 | Q4 FY 2023 | % Change |
|---|---|---|---|
| Total Net Sales | $414.7 million | $374.5 million | +11% |
| U.S. Consumer Sales | $309.7 million | $201.0 million | +54% |
| Hawthorne Sales | $80.5 million | $149.7 million | -46% |
| Gross Margin (GAAP) | -7.1% | -15.2% | — |
| GAAP Net Loss | $244.0 million | $468.4 million | -48% |
Cost Management and Operational Adjustments
Scotts Miracle-Gro has implemented strategic cost-reduction initiatives, culminating in a 9% decrease in selling, general, and administrative expenses, amounting to $559.0 million for the fiscal year. The company also reported a significant improvement in its gross margin rate, which increased to 23.9% on a GAAP basis, primarily due to distribution network savings and favorable segment mix.
Debt and Cash Flow Analysis
As of September 30, 2024, the company had a debt-to-EBITDA ratio of 4.86 times, which is below the covenant maximum of 6.0 times. The total long-term debt stood at $2.17 billion, with interest expenses decreasing to $158.8 million, reflecting a lower debt balance.
| Debt and Cash Flow Metrics | FY 2024 | FY 2023 |
|---|---|---|
| Total Long-term Debt | $2.17 billion | $2.56 billion |
| Interest Expense | $158.8 million | $178.1 million |
| Free Cash Flow | $583.5 million | $438.2 million |
In summary, the Scotts Miracle-Gro Company has demonstrated resilience and strategic foresight in navigating its operational challenges, positioning itself for future growth and stability in the lawn and garden sector.
A Who Owns The Scotts Miracle-Gro Company (SMG)
Major Shareholders
As of 2024, The Scotts Miracle-Gro Company (NYSE: SMG) has a diverse ownership structure. The largest shareholder is the Hagedorn Partnership, L.P., which owns approximately 24% of the company’s common shares. This significant ownership allows the partnership to exert considerable influence over corporate decisions that require shareholder approval.
Institutional Ownership
Institutional investors also hold a substantial portion of the company’s stock. Here is a summary of the top institutional shareholders:
| Institution | Ownership Percentage | Shares Owned |
|---|---|---|
| BlackRock, Inc. | 14.5% | 8.2 million |
| Vanguard Group, Inc. | 11.3% | 6.4 million |
| State Street Corporation | 7.8% | 4.4 million |
| Invesco Ltd. | 3.5% | 2.0 million |
| Wellington Management Company, LLP | 3.1% | 1.7 million |
Insider Ownership
Insider ownership at Scotts Miracle-Gro is also notable. Key executives and board members hold a combined 5% of the company's shares. This includes:
- Jim Hagedorn (Chairman & CEO)
- Matt Garth (CFO)
- Other board members and executives
Stock Performance and Market Trends
As of September 30, 2024, Scotts Miracle-Gro reported a total company net sales of approximately $3.6 billion, reflecting a stable performance compared to the previous year. The company’s stock has shown fluctuations in response to market conditions, with a GAAP net loss of $34.9 million or $0.61 per share for the fiscal year. The company's stock price as of late 2024 is approximately $50 per share, which has been influenced by broader market trends in the lawn and garden industry, as well as the company's strategic shifts in business operations.
Conclusion of Ownership Dynamics
The ownership structure of The Scotts Miracle-Gro Company is characterized by significant institutional investment and a major stakeholder in the form of the Hagedorn Partnership. This dynamic plays a crucial role in the company's strategic direction and overall governance.
The Scotts Miracle-Gro Company (SMG) Mission Statement
The Scotts Miracle-Gro Company (SMG) focuses on enhancing the quality of life for consumers through innovative lawn and garden products. The mission statement emphasizes a commitment to sustainability, innovation, and community engagement, aiming to lead the industry in providing products that foster healthy gardens and landscapes.
Financial Overview
As of fiscal year ended September 30, 2024, Scotts Miracle-Gro reported total net sales of approximately $3.6 billion, remaining flat compared to the previous year. The U.S. Consumer segment saw a sales increase of 6%, totaling $3.0 billion, while the Hawthorne segment experienced a significant decline of 37%, bringing in $294.7 million.
| Financial Metric | FY 2024 | FY 2023 | % Change |
|---|---|---|---|
| Total Net Sales | $3.6 billion | $3.6 billion | 0% |
| U.S. Consumer Segment Sales | $3.0 billion | $2.8 billion | 6% |
| Hawthorne Segment Sales | $294.7 million | $467.3 million | (37%) |
| GAAP Net Loss | $34.9 million | $380.1 million | 91% |
| Non-GAAP Adjusted EBITDA | $510.1 million | $446.9 million | 14% |
Quarterly Performance
In the fourth quarter ended September 30, 2024, Scotts Miracle-Gro reported total net sales of $414.7 million, an increase of 11% compared to $374.5 million in the same quarter of the previous year. The U.S. Consumer segment experienced a remarkable increase of 54% in sales, totaling $309.7 million.
| Quarterly Metric | Q4 FY 2024 | Q4 FY 2023 | % Change |
|---|---|---|---|
| Total Net Sales | $414.7 million | $374.5 million | 11% |
| U.S. Consumer Sales | $309.7 million | $201.0 million | 54% |
| Hawthorne Sales | $80.5 million | $149.7 million | (46%) |
Cost Structure and Margins
The company’s GAAP gross margin rate for the fiscal year stood at 23.9%, an improvement from 18.5% in FY 2023. Non-GAAP adjusted gross margin was reported at 26.3%, up from 23.7% the previous year.
| Margin Metrics | FY 2024 | FY 2023 |
|---|---|---|
| GAAP Gross Margin Rate | 23.9% | 18.5% |
| Non-GAAP Adjusted Gross Margin Rate | 26.3% | 23.7% |
Debt and Cash Flow
Scotts Miracle-Gro reported a debt-to-EBITDA ratio of 4.86 times at the end of FY 2024. Free cash flow was reported at $583.5 million, compared to $438.2 million in FY 2023, reflecting improved cash management practices.
| Debt and Cash Flow Metrics | FY 2024 | FY 2023 |
|---|---|---|
| Debt-to-EBITDA Ratio | 4.86x | N/A |
| Free Cash Flow | $583.5 million | $438.2 million |
Outlook and Strategic Initiatives
The company is focused on a three-year growth plan aimed at enhancing its core strengths while driving sustainable growth and shareholder value. Investments in marketing and innovation are expected to exceed $40 million in FY 2025, aiming for additional gross margin recovery and adjusted EBITDA growth.
How The Scotts Miracle-Gro Company (SMG) Works
Company Overview
The Scotts Miracle-Gro Company, headquartered in Marysville, Ohio, is a leading marketer of branded consumer lawn and garden products. As of fiscal year 2024, the company reported total sales of approximately $3.6 billion.
Financial Performance
For the fiscal year ended September 30, 2024, Scotts Miracle-Gro's financial results included:
| Metric | FY 2024 | FY 2023 | % Change |
|---|---|---|---|
| Total Net Sales | $3.6 billion | $3.6 billion | — |
| U.S. Consumer Segment Sales | $3.0 billion | $2.8 billion | 6% |
| Hawthorne Segment Sales | $294.7 million | $467.3 million | (37)% |
| GAAP Net Loss | $34.9 million | $380.1 million | 91% |
| Adjusted EBITDA | $510.1 million | $446.9 million | 14% |
Segment Analysis
Scotts Miracle-Gro operates primarily through three segments: U.S. Consumer, Hawthorne, and Other. The performance of these segments is summarized below:
| Segment | Q4 FY 2024 Net Sales | Q4 FY 2023 Net Sales | % Change |
|---|---|---|---|
| U.S. Consumer | $309.7 million | $201.0 million | 54% |
| Hawthorne | $80.5 million | $149.7 million | (46)% |
| Other | $24.5 million | $23.8 million | 3% |
| Total | $414.7 million | $374.5 million | 11% |
Operational Metrics
Scotts Miracle-Gro has made significant strides in improving operational metrics. Key figures for FY 2024 include:
| Metric | Value |
|---|---|
| Gross Margin (GAAP) | 23.9% |
| Gross Margin (Non-GAAP) | 26.3% |
| SG&A Expenses | $559.0 million |
| Interest Expense | $158.8 million |
| Free Cash Flow | $583.5 million |
Cash Flow and Liquidity
For the fiscal year ended September 30, 2024, Scotts Miracle-Gro reported:
| Metric | Amount |
|---|---|
| Net Cash Provided by Operating Activities | $667.5 million |
| Investments in Property, Plant, and Equipment | ($84.0 million) |
| Cash and Cash Equivalents at Year-End | $71.6 million |
Debt and Financing
The Company's debt situation as of September 30, 2024, includes:
| Metric | Amount |
|---|---|
| Long-term Debt | $2.17 billion |
| Debt-to-EBITDA Ratio | 4.86x |
Future Outlook
Scotts Miracle-Gro is focusing on strategic growth plans and expects to achieve additional gross margin recovery in FY 2025. The company anticipates making incremental investments of at least $40 million in its brands to support long-term growth.
How The Scotts Miracle-Gro Company (SMG) Makes Money
Revenue Streams
The Scotts Miracle-Gro Company generates revenue primarily through three segments: U.S. Consumer, Hawthorne, and Other. For the fiscal year ended September 30, 2024, the total net sales were approximately $3.6 billion, showing stability compared to previous years.
| Segment | Net Sales (FY 2024) | Net Sales (FY 2023) | % Change |
|---|---|---|---|
| U.S. Consumer | $3.0 billion | $2.84 billion | 6% |
| Hawthorne | $294.7 million | $467.3 million | (37)% |
| Other | $244.3 million | $240.3 million | 2% |
| Total | $3.6 billion | $3.55 billion | — |
U.S. Consumer Segment
The U.S. Consumer segment is the largest contributor, accounting for approximately 84% of total sales. This segment includes products for lawn and garden care, such as fertilizers, soil, and pest control products. Sales increased by 6% year-over-year, attributed to new product listings, shelf space expansion, and promotional activities.
Hawthorne Segment
The Hawthorne segment, which focuses on indoor and hydroponic gardening products, saw a significant decline in sales of 37%. This drop was primarily due to the cessation of third-party distribution and reduced demand for professional horticultural lighting products. The sales figures for Hawthorne for FY 2024 were $294.7 million, down from $467.3 million in FY 2023.
Cost Structure
For FY 2024, the total cost of sales was $2.62 billion, leading to a gross margin of 23.9%. The gross margin improved from 18.5% in the previous year, largely due to cost-saving measures and material cost deflation.
| Financial Metrics | FY 2024 | FY 2023 |
|---|---|---|
| Gross Margin | 23.9% | 18.5% |
| SG&A Expenses | $559.0 million | $551.3 million |
| Interest Expense | $158.8 million | $178.1 million |
| Net Loss | $34.9 million | $380.1 million |
Adjusted Earnings and EBITDA
The non-GAAP adjusted EBITDA for FY 2024 was reported at $510.1 million, an increase from $446.9 million in FY 2023. This improvement was driven by stronger operational performance and strategic cost management.
Free Cash Flow
Free cash flow for FY 2024 reached $583.5 million, compared to $438.2 million in FY 2023. This increase was primarily due to efficient management of working capital and inventory levels, achieving a target of maintaining inventories below $600 million.
Conclusion of Segment Performance
The performance of each segment is evaluated based on net sales and segment profit. The U.S. Consumer segment showed resilience, while the Hawthorne segment faced challenges. The overall company strategy focuses on enhancing brand value and operational efficiency to drive future growth.
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Resources:
- The Scotts Miracle-Gro Company (SMG) Financial Statements – Access the full quarterly financial statements for Q4 2024 to get an in-depth view of The Scotts Miracle-Gro Company (SMG)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View The Scotts Miracle-Gro Company (SMG)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.