Scotts Miracle-Gro Company (SCQA) AI Stock Analysis

Company Guidance

Management reaffirmed fiscal 2026 guidance and raised non‑GAAP adjusted EPS from continuing operations to $4.30–$4.45 (from $4.15–$4.35); they expect full‑year net sales to land in low‑single‑digit growth (Q3 net sales $1.17B; YTD $2.99B; U.S. Consumer YTD $2.74B), with branded sales up 4.5% YTD, innovation contributing $75M this year and $278M from launches over the last three years, e‑commerce now 13% of POS (+300 bps y/y) and e‑com POS dollars +27% YTD. Gross margin expansion is on track (GAAP YTD 35.7%, +130 bps; non‑GAAP YTD 35.8% vs 34.7%), although the quarter was pressured (Q GAAP 31.2%, non‑GAAP 31.3%) by higher freight/commodity costs and a $15M incremental commodity impact this year; supply‑chain savings are expected to net roughly 1% of sales by year‑end. Profitability and balance‑sheet metrics show YTD non‑GAAP adjusted EBITDA $686.6M (Q $246.3M), YTD non‑GAAP adjusted net income $390.2M ($6.60/sh), GAAP YTD net income $319.1M ($5.40/sh), interest expense down (Q $28M; YTD $86.5M), leverage improved to 3.78x from 4.15x with a target below 3.12x, SG&A running toward ~17–18% of sales, retailer inventories slightly elevated (high‑single‑digit %), and a plan to remove ~30% of lowest‑performing SKUs by the close of FY2027 (about two‑thirds of the way there).