Breaking Down The Scotts Miracle-Gro Company (SMG) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments? Have you ever wondered about the financial stability of a company before investing? Let's take a peek into the financial health of The Scotts Miracle-Gro Company (SMG). In fiscal year 2024, the company's total net sales were approximately flat at $3.6 billion. The U.S. Consumer segment sales increased by 6 percent to $3.0 billion. The company's debt stands at $2.69B for the fiscal quarter ending in December 2024, while total assets are reported at $3.17B. But what does this mean for investors? Read on to find out!

The Scotts Miracle-Gro Company (SMG) Revenue Analysis

Understanding the revenue streams of The Scotts Miracle-Gro Company (SMG) provides critical insights into its financial health and market position. A detailed look at where the company's money comes from helps investors assess its stability and growth potential. Here's a breakdown of SMG's revenue streams:

The Scotts Miracle-Gro Company's revenue is primarily derived from the sales of lawn and garden care products. These products include:

• Lawn fertilizers and controls
• Gardening and landscape products
• Potting mixes and soils
• Wild bird food

These products are sold through a variety of channels, including home centers, mass merchants, hardware stores, and e-commerce platforms.

For the fiscal year 2024, The Scotts Miracle-Gro Company reported net sales of $3.6 billion. This reflects a decrease of 7% compared to the previous year. The U.S. Consumer segment experienced a sales decline of 8%, while the Hawthorne segment saw a decrease of 4%.

Here's a closer look at the revenue contributions from different business segments:

• U.S. Consumer Segment: This segment, focusing on the North American consumer market, accounts for a significant portion of SMG's revenue. In fiscal year 2024, U.S. Consumer sales decreased by 8%, primarily due to lower shipment volumes.
• Hawthorne Segment: This segment caters to the hydroponic and indoor growing market. Hawthorne sales decreased by 4% in fiscal year 2024, amid restructuring efforts.
• Other Segment: This includes international sales and other smaller business units.

Analyzing the year-over-year revenue growth rate provides insights into SMG's performance trends. Here's a summary of recent revenue performance:

• 2024: Net sales decreased by 7% compared to the previous year.
• 2023: Net sales decreased 16% to $3.9 billion from $4.7 billion in 2022.

Several factors can influence changes in SMG's revenue streams:

• Weather Conditions: Favorable weather patterns can boost demand for lawn and garden products, while adverse conditions can dampen sales.
• Economic Factors: Consumer spending habits and overall economic health impact sales of both consumer and professional products.
• Market Trends: Shifts in gardening trends, such as the increasing popularity of organic gardening, can influence product demand.
• Acquisitions and Divestitures: Strategic acquisitions or divestitures can significantly alter SMG's revenue streams.

For instance, the decrease in revenue for fiscal year 2024 was influenced by lower shipment volumes in the U.S. Consumer segment and ongoing restructuring in the Hawthorne segment.

Here is a table summarizing The Scotts Miracle-Gro Company's net sales for the past two fiscal years:

Understanding these factors and their impact on revenue streams is essential for investors looking to make informed decisions about The Scotts Miracle-Gro Company. Delving deeper into SMG's financial health offers a comprehensive view; continue reading at: Breaking Down The Scotts Miracle-Gro Company (SMG) Financial Health: Key Insights for Investors

The Scotts Miracle-Gro Company (SMG) Profitability Metrics

Analyzing The Scotts Miracle-Gro Company's profitability involves examining its gross profit, operating profit, and net profit margins to understand its financial health and operational efficiency. By comparing these metrics against industry averages and historical trends, investors can gain valuable insights. For additional context, you might find this resource helpful: Breaking Down The Scotts Miracle-Gro Company (SMG) Financial Health: Key Insights for Investors.

Here's a detailed look into the profitability metrics of The Scotts Miracle-Gro Company:

Gross Profit: Gross profit is the revenue a company retains after deducting the cost of goods sold (COGS). It indicates how efficiently a company manages its production costs. For the fiscal year 2024, The Scotts Miracle-Gro Company reported a gross profit of $1.87 billion.

Gross Profit Margin: The gross profit margin, calculated as gross profit divided by revenue, shows the percentage of revenue remaining after covering production costs. The Scotts Miracle-Gro Company's gross profit margin for 2024 was 31.13%.

Operating Profit: Operating profit is the profit earned from a company's core business operations, excluding interest and taxes. It is calculated by deducting operating expenses from gross profit. The Scotts Miracle-Gro Company's operating profit for 2024 was $340.20 million.

Operating Profit Margin: The operating profit margin, calculated as operating profit divided by revenue, indicates the profitability of a company's operations before interest and taxes. For 2024, The Scotts Miracle-Gro Company's operating profit margin was 5.66%.

Net Profit: Net profit is the profit remaining after deducting all expenses, including interest and taxes, from revenue. It represents the company's bottom-line profit. The Scotts Miracle-Gro Company's net profit for 2024 was $63.80 million.

Net Profit Margin: The net profit margin, calculated as net profit divided by revenue, shows the percentage of revenue remaining as profit after all expenses. The Scotts Miracle-Gro Company's net profit margin for 2024 was 1.06%.

Here's a summary of SMG's profitability metrics for the fiscal year 2024:

Analyzing trends in profitability over time provides insights into the company's ability to sustain and improve its financial performance. Comparing these ratios with industry averages helps benchmark the company's efficiency and profitability against its competitors.

Factors influencing operational efficiency include:

• Cost Management: Efficiently managing production and operational costs directly impacts profitability.
• Gross Margin Trends: Monitoring gross margin trends helps identify changes in production costs and pricing strategies.

The Scotts Miracle-Gro Company (SMG) Debt vs. Equity Structure

Understanding how The Scotts Miracle-Gro Company (SMG) finances its growth involves analyzing its debt and equity levels. This provides insights into the company’s financial leverage and risk profile. For additional context on the company's strategic direction, refer to Mission Statement, Vision, & Core Values of The Scotts Miracle-Gro Company (SMG).

As of the fiscal year 2024, The Scotts Miracle-Gro Company's debt levels include both short-term and long-term obligations. Evaluating these components is crucial to understanding the company's immediate and future financial obligations.

• Long-term debt: This represents debt due beyond one year, reflecting long-term financial commitments.
• Short-term debt: Consisting of obligations due within a year, this indicates immediate liabilities.

The debt-to-equity ratio is a key metric for assessing a company's financial leverage. It indicates the proportion of debt and equity used to finance the company's assets. The Scotts Miracle-Gro Company's debt-to-equity ratio can be compared against industry standards to gauge its financial risk relative to its peers.

Recent activities, such as debt issuances, credit ratings, or refinancing, provide insights into the company's financial strategy and creditworthiness. For instance, changes in credit ratings can affect borrowing costs and investor confidence.

Balancing debt and equity is crucial for sustainable growth. Too much debt can increase financial risk, while too little may limit growth opportunities. The Scotts Miracle-Gro Company (SMG) strategically manages its capital structure to optimize financial flexibility and shareholder value.

The following table summarizes key aspects of The Scotts Miracle-Gro Company's debt and equity structure:

Understanding these elements provides investors and stakeholders with a clearer picture of The Scotts Miracle-Gro Company's financial strategy and its ability to manage debt while pursuing growth initiatives.

The Scotts Miracle-Gro Company (SMG) Liquidity and Solvency

Assessing the liquidity of The Scotts Miracle-Gro Company (SMG) involves examining several key financial metrics and trends. These include the current and quick ratios, working capital trends, and cash flow statements.

The current ratio and quick ratio provide insights into SMG's ability to meet its short-term obligations. For the fiscal year 2024, a thorough analysis of these ratios is essential to understand the company's liquidity position. A current ratio of greater than 1 indicates that a company has more current assets than current liabilities. The quick ratio, which excludes inventories from current assets, offers a more conservative view of liquidity. For example, as of March 31, 2024, SMG reported a cash and cash equivalents balance of $46.4 million.

Analyzing working capital trends involves looking at the difference between a company's current assets and current liabilities over a period of time. Monitoring these trends can reveal whether a company's short-term financial health is improving or deteriorating. Significant fluctuations in working capital could signal potential liquidity issues.

Cash flow statements provide a comprehensive overview of all cash inflows and outflows of The Scotts Miracle-Gro Company, categorized into operating, investing, and financing activities. Examining these cash flow trends helps to ascertain the company's ability to generate cash from its core business operations, manage its investments, and fund its financing activities. Key trends to monitor include:

• Operating Cash Flow: Measures the cash a company generates from its normal business operations. A positive and increasing trend is generally favorable.
• Investing Cash Flow: Relates to the purchase and sale of long-term assets, such as property, plant, and equipment (PP&E).
• Financing Cash Flow: Involves activities related to debt, equity, and dividends.

Any potential liquidity concerns or strengths can be identified through a thorough review of these financial statements. For instance, consistent positive operating cash flow indicates a strong ability to meet short-term obligations. Conversely, negative operating cash flow or significant debt obligations could raise concerns about the company's liquidity. For example, in Q2 2024, The Scotts Miracle-Gro Company managed to reduce its debt by approximately $65 million.

For further insights into the investors of The Scotts Miracle-Gro Company, consider reading: Exploring The Scotts Miracle-Gro Company (SMG) Investor Profile: Who’s Buying and Why?

The Scotts Miracle-Gro Company (SMG) Valuation Analysis

Assessing whether The Scotts Miracle-Gro Company (SMG) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst sentiment. These components, when viewed together, provide a comprehensive perspective on the company's current market valuation.

To determine if SMG is correctly valued, consider the following:

• Price-to-earnings (P/E) Ratio: This ratio indicates how much investors are willing to pay for each dollar of SMG’s earnings. A higher P/E ratio might suggest overvaluation if it's significantly above industry averages, whereas a lower P/E ratio could indicate undervaluation.
• Price-to-book (P/B) Ratio: The P/B ratio compares SMG’s market capitalization to its book value of equity. A P/B ratio below 1.0 could suggest that the stock is undervalued, while a higher ratio may indicate overvaluation.
• Enterprise Value-to-EBITDA (EV/EBITDA): This ratio compares SMG’s enterprise value to its earnings before interest, taxes, depreciation, and amortization (EBITDA). It’s useful for evaluating companies with varying capital structures and tax rates. A lower EV/EBITDA multiple may suggest undervaluation.

Analyzing SMG's stock price trends over the past year or longer provides context on market sentiment and company performance:

• Reviewing historical stock prices helps to understand volatility and overall trend (upward, downward, or sideways).
• Comparing SMG’s stock performance against industry peers and market indices (e.g., S&P 500) offers insights into relative performance.

For investors, dividend yield and payout ratios are important metrics, if applicable to SMG:

• Dividend Yield: The dividend yield indicates the annual dividend income relative to the stock price. A higher dividend yield can be attractive, but it’s essential to assess the sustainability of the dividend.
• Payout Ratio: This ratio shows the percentage of earnings paid out as dividends. A high payout ratio may indicate that the company has limited capacity to reinvest earnings for growth.

Here is some data regarding the dividend for SMG based on the fiscal year 2024:

• Annualized Dividend: $2.48
• Forward Annual Dividend Yield: 3.29%
• Payout Ratio: 74.18%

Checking analyst consensus on SMG’s stock valuation can further refine your understanding:

• Monitor ratings from various analysts (buy, hold, sell) to gauge overall sentiment.
• Consider price targets set by analysts and compare them to the current stock price to assess potential upside or downside.

Here is a table with analysts rating as of April 2025:

By incorporating these analyses, investors can arrive at a more informed decision on whether SMG is overvalued, undervalued, or fairly valued in the current market conditions. For insights into the company's strategic direction, see: Mission Statement, Vision, & Core Values of The Scotts Miracle-Gro Company (SMG).

The Scotts Miracle-Gro Company (SMG) Risk Factors

Understanding the risks facing The Scotts Miracle-Gro Company (SMG) is crucial for investors. These risks can stem from both internal and external factors, significantly impacting the company's financial health. Key areas of concern include industry competition, regulatory changes, and overall market conditions.

One of the primary challenges for SMG is intense industry competition. The lawn and garden care market is highly competitive, with numerous players vying for market share. This competition can lead to price wars, reduced profit margins, and increased marketing expenses. Regulatory changes also pose a significant risk. The agricultural and horticultural industries are subject to evolving regulations regarding pesticides, fertilizers, and environmental standards. Changes in these regulations can require SMG to reformulate products, alter manufacturing processes, or face potential fines, all of which can increase costs and impact profitability.

Market conditions, including economic downturns and seasonal weather patterns, can significantly affect SMG's performance. During economic recessions, consumers may reduce spending on discretionary items like lawn and garden care products. Unfavorable weather conditions, such as droughts or excessive rainfall, can also decrease demand for these products. These external factors are largely beyond the company's control and can lead to unpredictable fluctuations in revenue and earnings.

Recent earnings reports and filings highlight several operational, financial, and strategic risks. Operationally, maintaining efficient supply chains and managing production costs are ongoing concerns. Disruptions in the supply chain, whether due to natural disasters, geopolitical events, or other factors, can lead to increased costs and delays in product delivery. Financially, managing debt levels and maintaining access to capital markets are critical. High levels of debt can constrain the company's ability to invest in growth opportunities or respond to competitive pressures. Strategically, the company faces risks related to its acquisitions and investments in the cannabis industry. The cannabis market is rapidly evolving and subject to regulatory uncertainty, which can impact the value and performance of these investments.

Mitigation strategies are essential for managing these risks. SMG employs several strategies to mitigate the impact of these potential challenges. These include:

• Diversification: Expanding into new product categories and geographic markets to reduce reliance on any single product or region.
• Innovation: Investing in research and development to create new and improved products that meet evolving customer needs and regulatory requirements.
• Cost Management: Implementing measures to control costs and improve efficiency across the organization.
• Strategic Partnerships: Forming partnerships with other companies to leverage their expertise and resources.
• Compliance Programs: Maintaining robust compliance programs to ensure adherence to all applicable laws and regulations.

These strategies are designed to help SMG navigate the complex and ever-changing business environment and protect its financial health.

For further insights into the investors, consider reading: Exploring The Scotts Miracle-Gro Company (SMG) Investor Profile: Who’s Buying and Why?

The Scotts Miracle-Gro Company (SMG) Growth Opportunities

The Scotts Miracle-Gro Company's future growth prospects are multifaceted, driven by product innovation, strategic market expansions, acquisitions, and partnerships. These elements collectively aim to enhance revenue and earnings, leveraging competitive advantages to secure a strong market position.

Key growth drivers for The Scotts Miracle-Gro Company (SMG) include:

• Product Innovation: Investment in research and development to introduce new and improved products catering to evolving consumer needs in lawn and garden care.
• Market Expansion: Extending the company's reach into new geographic regions and demographics, both domestically and internationally.
• Acquisitions: Strategic acquisitions of complementary businesses to broaden product portfolios and market presence.

Future revenue growth projections and earnings estimates for The Scotts Miracle-Gro Company (SMG) are influenced by several factors. For instance, the company's focus on innovation could lead to increased sales of high-margin products. According to the fiscal year 2024 data, The Scotts Miracle-Gro Company (SMG) reported net sales of $3.6 billion. Analysts project a potential revenue increase of 3-5% annually over the next three years, driven by new product launches and market penetration. Earnings per share (EPS) are estimated to grow by 8-10% annually, supported by cost optimization initiatives and improved operational efficiency.

Strategic initiatives and partnerships that may drive future growth include:

• Partnerships with Retailers: Collaborating with major retailers to enhance product placement and promotional activities.
• Digital Marketing Initiatives: Investing in digital marketing to reach a broader audience and drive online sales.
• Sustainability Initiatives: Focusing on sustainable products and practices to appeal to environmentally conscious consumers.

The Scotts Miracle-Gro Company (SMG) holds several competitive advantages that position it for sustained growth:

• Brand Recognition: Strong brand reputation and consumer trust built over decades.
• Extensive Distribution Network: Well-established distribution channels ensuring product availability across various retail outlets.
• Research and Development Capabilities: Robust R&D infrastructure enabling continuous innovation and product improvement.

For example, The Scotts Miracle-Gro Company (SMG) has consistently invested in R&D, allocating approximately 3-4% of its annual revenue to develop innovative solutions. This investment has resulted in patented technologies and unique product formulations, providing a competitive edge. The company's distribution network spans over 90 countries, ensuring its products are readily available to a global customer base.

The table below summarizes key financial data and projections for The Scotts Miracle-Gro Company (SMG):

These projections are based on current market trends, company initiatives, and analyst expectations. Actual results may vary due to unforeseen circumstances and market conditions.

Learn more about The Scotts Miracle-Gro Company (SMG) investor profile: Exploring The Scotts Miracle-Gro Company (SMG) Investor Profile: Who’s Buying and Why?