ScottsMiracle-Gro Locks 80% Commodity Inputs, Cuts Debt-to-EBITDA Below 4x, Targets 32% Margin
ScottsMiracle-Gro reaffirmed fiscal 2026 guidance, locking 80% of its commodities by Q2 and sourcing 90% of cost of goods domestically, including nearly 100% of urea. It cut debt-to-EBITDA leverage below 4x and aims for low-single-digit U.S. sales growth with at least 32% non-GAAP gross margin and a planned share repurchase.
1. Fiscal 2026 Guidance Reaffirmed
ScottsMiracle-Gro reaffirmed its fiscal 2026 guidance, stating that global commodity volatility from the Iran War will not affect its full-year outlook due to proactive hedging of inputs.
2. Commodity Hedging and Domestic Sourcing
By the end of Q2, the company had locked 80% of its commodity requirements and sources 90% of its cost of goods domestically, with nearly 100% of urea supplied under previously negotiated contracts.
3. Margin and Sales Growth Targets
Management reiterated a non-GAAP adjusted gross margin target of at least 32% and low-single-digit U.S. net sales growth for fiscal 2026, citing strong consumer engagement in the lawn and garden category.
4. Debt Leverage Reduction and Capital Allocation
At quarter-end, debt-to-EBITDA leverage fell below 4x, positioning the company to reinvest in the business and initiate a share repurchase program later in the fiscal year.