Scotts Miracle-Gro Co Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Eric Bosshard - Cleveland Research Co LLC - Analyst : Good morning. Thanks. Two questions. First of all, I'm curious on price and price mix in '25, how that has performed relative to your expectations, and what the strategy is for '26 and the expectations in '26? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Eric Bosshard - Cleveland Research Co LLC - Analyst : Great. And then secondly, in the neighborhood of Jim's comments. The comment about the category growth and you gaining share this year, what do you think the category growth is at retail in '25? And what have your numbers you compare to that?

Question: Eric Bosshard - Cleveland Research Co LLC - Analyst : And so within that, is this dollars or units? I'm sorry.

Question: Eric Bosshard - Cleveland Research Co LLC - Analyst : Okay. Very good. That's all I have. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Jon Andersen - William Blair - Analyst : Good morning. Thank you for the questions. Two questions. First is you commented about the performance of some of the customers that leaned in with you on your traffic driving strategy this year and the relative outperformance. Can you talk about how that is influencing your 2026 line reviews? Specifically, those retailers planning to kind of re-up and lean in again with you and maybe those customers that didn't to the same extent rethinking that given their relative underperformance? And then the second question is on margins. Great gross margin improvement last year. It looks like you set up for another significant improvement this year. If you get to 30% and then you have kind of the target in the mid-30s. Can you talk a little bit about your visibility to getting to mid-30s over the next couple few years? And what the cadence of that might look like '26 versus '27? Thank you.

Question: Chris Carey - Wells Fargo Securities LLC - Analyst : Hey guys. Just regarding -- like more of a mix question, and this is really more strategic longer-term. Can you just give maybe a state in on how you feel about the lawns business, delivery versus expectations this year and really how it informs your thought process over the next one to two years as you look to perhaps improve the mix between some of the growing media and mulch businesses relative to lawns over the medium-term horizon. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Chris Carey - Wells Fargo Securities LLC - Analyst : Okay, alright, I'm going to leave it there. Thanks so much.

Question: Martin Mitela - Raymond James - Analyst : Hey, good morning. This is Martin on for Joe. Earlier, you had mentioned that many of the retailers have shifted their replenishment to match the POS curve. Would you mind maybe a little bit more detail as to what's going on there? And sort of what's the shape of the retail inventories?

Question: Martin Mitela - Raymond James - Analyst : Great, thank you. That's all from me.

Question: Peter Grom - UBS - Analyst : Thanks operator. Good morning, guys. Mark, I just want to ask a follow-up question on gross margin. I said more of a clarification. So just 100 basis points of cost savings, 100 basis points on price at for each year and for both drivers. So I guess, all else equal, that bridge would assume kind of going from 30% in fiscal 25% to 32% in fiscal '26. And then building from there, and if something happens with Hawthorne, you could see another, call it, 100 basis points on. Is that the right way to think about it? I just wanted to clarify that.

Question: Peter Grom - UBS - Analyst : Okay. That's really helpful. And I guess just to the prior question, right, I think in your response to Chris' question, you kind of mentioned that you weren't really including benefits from mix and innovation in this bridge. So are there any guardrails you can provide in terms of what that benefit could look like? And is this something that actually could start to show its teeth in kind of the P&L next year? Or is that kind of more of a multiyear process?

Question: Peter Grom - UBS - Analyst : Yeah, that makes sense, Jim. I guess one last question for me, and then I'll pass it on. Just Jim, taking all the comments you made are just around the top line, the category and the retail activation, the innovation. Clearly, just a lot of momentum, a lot of enthusiasm. And I know your comment in the prepared remarks around the long-term algorithm for certain components in the multiyear target. But as you look out to next year, is there any sort of reason why the US consumer business wouldn't see that 3% level of growth that you kind of outlined it previously? Thanks.