Scotts Miracle-Gro reported a non-GAAP adjusted net loss of $0.77 per share for the quarter ended December 27, 2025, narrowing from a loss of $0.89 per share a year earlier and outperforming the Zacks Consensus Estimate of a $1.04 loss. Total net sales in the U.S. Consumer segment reached $328.5 million, topping Street forecasts by roughly 5%, while GAAP gross margin expanded by 90 basis points year-over-year to 25.0%, and non-GAAP adjusted gross margin likewise improved by 90 basis points to 25.4%. Non-GAAP adjusted EBITDA rose by $2.1 million to $3.0 million, underscoring stronger operating leverage as the business continued its recovery trajectory.

The company announced that it has entered advanced discussions to sell its Hawthorne subsidiary to Vireo Growth, Inc., with the transaction expected to close in the fiscal second quarter. Effective in Q1, Hawthorne has been classified as a discontinued operation, and the proceeds are anticipated to deliver immediate margin-accretive benefits. Concurrently, the Board approved a multi-year share repurchase program authorizing up to $500 million in buybacks, to commence in late 2026 and subject to market conditions and leverage targets. Management indicated this repurchase plan complements its priorities of deleveraging and returning capital to shareholders.

Scotts Miracle-Gro reaffirmed its full-year fiscal 2026 outlook, projecting low single-digit net sales growth in the U.S. Consumer segment, non-GAAP adjusted gross margin of at least 32%, and non-GAAP adjusted net income per share from continuing operations of $4.15 to $4.35. The company expects mid-single-digit growth in non-GAAP adjusted EBITDA and free cash flow of $275 million, driving net leverage down to the high 3x range by year-end. Net leverage improved to 4.03x in Q1, a 0.49x reduction from the prior year, indicating tangible progress on debt reduction targets.