Scotts Miracle-Gro Stock Run Nicked by Cost, Sales Pressures

By Dean Seal

Scotts Miracle-Gro shares have risen 20% in the past two months, though its run was tripped up on Wednesday by rising costs and signs of potential revenue challenges in its latest quarterly report.

The stock was down 3% at $70.89. Shares are still up 21% on the year.

The lawn-and-garden company said before the opening bell that adjusted earnings hit $2.82 a share in the fiscal third quarter, topping analyst projections for $2.48 a share, according to FactSet.

But adjusted gross margin pulled back by 100 basis points to 31.3%. That came in below the Wall Street consensus for 32.2%, as highlighted in a note from UBS analysts earlier this month. The company is dealing with rising freight and commodity costs tied to the war in Iran.

Scotts warned that purchasing activity is expected to slow in the current quarter as retailers clear excess inventory leftover from some weather-related softness in the spring months. As a result, the company is expecting to hit the low-end of its fiscal fourth-quarter revenue guidance, Chief Executive Nathan Baxter said.

Baxter also told analysts on the company's earnings call that management is reevaluating the company's capital allocation strategy, including its announced financial targets and share buyback plans.

Leadership is focusing on earnings growth and margin expansion, which means some financial targets for 2030 might be pushed back, Baxter said.

Write to Dean Seal at dean.seal@wsj.com

(END) Dow Jones Newswires

July 29, 2026 14:08 ET (18:08 GMT)