Scotts Miracle-Gro Navigates Regulatory Headwinds, Strong Seasonal Sales

Ticker: SMG · Form: 10-K · Filed: Nov 25, 2025 · CIK: 825542

Scotts Miracle-Gro CO 10-K Filing Summary
FieldDetail
CompanyScotts Miracle-Gro CO (SMG)
Form Type10-K
Filed DateNov 25, 2025
Risk Levelhigh
Pages15
Reading Time18 min
Key Dollar Amounts$0.01, $34.8 m, $34.6 million, $35.7 million, $8.9 m
Sentimentmixed

Sentiment: mixed

Topics: Lawn and Garden, Hydroponics, Consumer Staples, Regulatory Risk, Seasonal Business, Customer Concentration, PFAS

Related Tickers: SMG, SPB, CENTA, LOW, HD

TL;DR

**SMG is a seasonal powerhouse with strong brands, but regulatory risks and customer concentration could prune its growth.**

AI Summary

Scotts Miracle-Gro Co (SMG) reported a market value of Common Shares held by non-affiliates at approximately $2,415,372,479 as of March 28, 2025, with 57,995,369 Common Shares outstanding as of November 21, 2025. The company, a leading marketer of branded consumer lawn and garden products in North America, operates through its U.S. Consumer, Hawthorne (indoor and hydroponic gardening), and Other (primarily Canadian consumer lawn and garden) segments. Key brands include Scotts Turf Builder, Miracle-Gro, Ortho, and Tomcat. SMG is also the exclusive agent for Monsanto's consumer Roundup products in the U.S. and other specified countries. Research and development spending was $34.8 million in fiscal 2025, a slight increase from $34.6 million in fiscal 2024, but down from $35.7 million in fiscal 2023. The company faces significant regulatory risks, particularly concerning pesticide products under FIFRA and emerging PFAS regulations, including the U.S. EPA's April 2024 designation of PFOA and PFOS as hazardous substances under CERCLA. The business is highly seasonal, with over 75% of annual net sales in the second and third fiscal quarters.

Why It Matters

Scotts Miracle-Gro's strong brand portfolio, including Scotts and Miracle-Gro, positions it as a leader in the competitive lawn and garden market, but its reliance on a few major retailers like The Home Depot and Lowe's introduces significant customer concentration risk. The company's Hawthorne segment, focused on indoor and hydroponic gardening, offers diversification but also exposes it to a different set of market dynamics. Investors should closely monitor the evolving regulatory landscape, especially new PFAS regulations, which could significantly impact product formulations, manufacturing costs, and potential liabilities, affecting SMG's competitive standing against rivals like Central Garden & Pet Company and Spectrum Brands Holdings, Inc. The seasonal nature of its core business means financial performance is heavily weighted towards spring and summer, requiring careful inventory and supply chain management.

Risk Assessment

Risk Level: high — The company faces high risk due to its significant customer concentration, with The Home Depot and Lowe's individually representing over 10% of consolidated net sales, making it vulnerable to order reductions. Furthermore, the evolving and stringent regulatory environment, particularly the U.S. EPA's April 2024 designation of PFOA and PFOS as hazardous substances under CERCLA, poses substantial compliance and potential liability risks for its pesticide and other chemical-based products.

Analyst Insight

Investors should scrutinize SMG's upcoming earnings reports for detailed impacts of new PFAS regulations and any shifts in sales volumes from its top two customers. Consider hedging strategies or diversifying within the consumer staples sector to mitigate risks associated with customer concentration and regulatory changes.

Financial Highlights

debt To Equity
N/A
revenue
N/A
operating Margin
N/A
total Assets
N/A
total Debt
N/A
net Income
N/A
eps
N/A
gross Margin
N/A
cash Position
N/A
revenue Growth
N/A

Revenue Breakdown

SegmentRevenueGrowth
U.S. ConsumerN/AN/A
HawthorneN/AN/A
OtherN/AN/A

Key Numbers

Key Players & Entities

FAQ

What were Scotts Miracle-Gro's research and development expenses in fiscal year 2025?

Scotts Miracle-Gro's research and development spending was $34.8 million in fiscal 2025, which included $8.9 million in product registration costs. This represents a slight increase from $34.6 million in fiscal 2024.

Which customers represent a significant portion of Scotts Miracle-Gro's consolidated net sales?

The Home Depot and Lowe's are Scotts Miracle-Gro's two largest customers, with each individually representing more than 10% of reported consolidated net sales during the three most recent fiscal years. This indicates a significant customer concentration risk for the company.

How does seasonality impact Scotts Miracle-Gro's business operations?

Scotts Miracle-Gro's North America consumer lawn and garden business is highly seasonal, with over 75% of its annual net sales occurring in the second and third fiscal quarters combined. This concentration means significant orders are received late winter and continue through the spring season.

What are the key regulatory challenges facing Scotts Miracle-Gro, particularly regarding PFAS?

Scotts Miracle-Gro faces significant regulatory challenges, including compliance with FIFRA for pesticide products. A major emerging risk is the U.S. EPA's April 2024 designation of PFOA and PFOS as hazardous substances under CERCLA, which could have wide-ranging impacts on the company's products and operations.

What are Scotts Miracle-Gro's primary business segments?

Scotts Miracle-Gro divides its business into three primary segments: U.S. Consumer, which handles consumer lawn and garden products in the United States; Hawthorne, focused on indoor and hydroponic gardening; and Other, primarily covering its consumer lawn and garden business in Canada.

What is the aggregate market value of Scotts Miracle-Gro's common shares held by non-affiliates?

As of March 28, 2025, the aggregate market value of Scotts Miracle-Gro's Common Shares held by non-affiliates was approximately $2,415,372,479. There were 57,995,369 Common Shares outstanding as of November 21, 2025.

What is Scotts Miracle-Gro's relationship with Monsanto regarding Roundup products?

Scotts Miracle-Gro is Monsanto's exclusive agent for the marketing and distribution of certain consumer Roundup branded products within the United States and other specified countries. This arrangement is governed by the Third Amended and Restated Exclusive Agency and Marketing Agreement.

What are the main competitive factors for Scotts Miracle-Gro in its markets?

Scotts Miracle-Gro competes primarily on brand strength, product innovation, product quality, product performance, advertising, value, supply chain competency, field sales support, in-store sales support, and strong relationships with major retailers and distributors. Key competitors include Spectrum Brands Holdings, Inc. and Central Garden & Pet Company.

How does Scotts Miracle-Gro manage raw material price fluctuations?

Scotts Miracle-Gro manages raw material price fluctuations by negotiating contracts with favorable terms directly with vendors, committing to purchase a certain percentage of needs in advance, and hedging certain commodities like diesel and urea to improve cost predictability and control.

What is the potential impact if the marketing agreement for Monsanto's consumer Roundup products terminates?

If the Third Restated Agreement for Monsanto's consumer Roundup products terminates or the business materially declines, Scotts Miracle-Gro would lose a substantial source of future earnings and overhead expense absorption, as stated in their risk factors.

Risk Factors

Industry Context

Scotts Miracle-Gro operates as a leading marketer of branded consumer lawn and garden products in North America, with a significant presence in indoor and hydroponic gardening through its Hawthorne segment. The industry is characterized by strong brand recognition, seasonal demand, and increasing regulatory scrutiny, particularly concerning pesticide and environmental impact.

Regulatory Implications

The company faces substantial regulatory headwinds, notably from FIFRA for its pesticide products and emerging PFAS regulations. The EPA's recent actions on PFOA/PFOS under CERCLA signal a heightened compliance burden and potential for increased operational costs or product reformulation.

What Investors Should Do

  1. Monitor regulatory developments regarding PFAS and pesticide use.
  2. Analyze seasonality impact on quarterly performance and cash flow.
  3. Assess competitive positioning and brand strength in core segments.

Key Dates

Glossary

FIFRA
Federal Insecticide, Fungicide, and Rodenticide Act. This is the U.S. federal law that governs the registration, distribution, sale, and use of pesticides. (SMG's pesticide products are subject to FIFRA regulations, creating compliance requirements and potential risks.)
CERCLA
Comprehensive Environmental Response, Compensation, and Liability Act, also known as Superfund. It provides a federal framework for cleaning up uncontrolled or abandoned hazardous waste sites. (The EPA's designation of PFOA and PFOS as hazardous substances under CERCLA introduces potential liabilities and cleanup responsibilities for SMG.)
PFAS
Per- and polyfluoroalkyl substances. A group of man-made chemicals used in numerous industrial applications and consumer products, known for their persistence in the environment. (Emerging regulations around PFAS pose a significant risk to SMG's product lines and operations.)
Fiscal Year
The company's fiscal year ends on September 30. (Understanding the fiscal year end is crucial for interpreting financial reporting periods and comparing performance across years.)

Year-Over-Year Comparison

The provided text focuses on the current fiscal year (2025) and does not contain comparative data from the previous filing (fiscal 2024). Therefore, a direct comparison of revenue growth, margin changes, or new risks identified in the prior period cannot be made based on this excerpt.

Filing Stats: 4,435 words · 18 min read · ~15 pages · Grade level 13.2 · Accepted 2025-11-25 16:57:04

Key Financial Figures

Filing Documents

Business

Business 2 Item 1A.

Risk Factors

Risk Factors 8 Item 1B. Unresolved Staff Comments 23 Item 1C. Cybersecurity 24 Item 2.

Properties

Properties 26 Item 3.

Legal Proceedings

Legal Proceedings 27 Item 4. Mine Safety Disclosures 27 Part II Supplemental Item Executive Officers of the Registrant 28 Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 29 Item 6. [Reserved] 30 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 31 Item 7A.

Quantitative And Qualitative Disclosures About Market Risk

Quantitative And Qualitative Disclosures About Market Risk 50 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 51 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 51 Item 9A.

Controls and Procedures

Controls and Procedures 51 Item 9B. Other Information 51 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 51 Part III Item 10. Directors, Executive Officers and Corporate Governance 52 Item 11.

Executive Compensation

Executive Compensation 53 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 53 Item 13. Certain Relationships and Related Transactions, and Director Independence 53 Item 14. Principal Accountant Fees and Services 54 Part IV Item 15. Exhibits and Financial Statement Schedules 54 Item 16. Form 10-K Summary 54

Signatures

Signatures 55 Index to Exhibits 108 Table of Contents PART I

BUSINESS

ITEM 1. BUSINESS Company Description and Development of the Business The discussion below describes the business conducted by The Scotts Miracle-Gro Company, an Ohio corporation ("Scotts Miracle-Gro" and, together with its subsidiaries, the "Company," "we," "our" or "us"), including general developments in our business during fiscal 2025. Each reference in this Annual Report on Form 10-K ("Form 10-K") to a "fiscal" year is to our fiscal year ended or ending, as applicable, on September 30 of the referenced year. For additional information on recent business developments, see "ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" of this Form 10-K. Through our U.S. Consumer and Other segments, we are the leading marketer of branded consumer lawn and garden products in North America. Our products are marketed under some of the most recognized brand names in the consumer lawn and garden industry. Our key consumer lawn and garden brands include Scotts Turf Builder lawn fertilizer and Scotts grass seed products; Miracle-Gro soil, plant food and gardening products; Ortho herbicide and pesticide products; and Tomcat rodent control and animal repellent products. We are the exclusive agent of Monsanto Company, a subsidiary of Bayer AG ("Monsanto"), for the marketing and distribution of certain of Monsanto's consumer Roundup 1 branded products within the United States ("U.S.") and certain other specified countries. In addition, we have an equity interest in Bonnie Plants, LLC, a joint venture with Alabama Farmers Cooperative, Inc. ("AFC"), focused on planting, growing, developing, distributing, marketing and selling live plants. Through our Hawthorne segment, we are a leading provider of nutrients, lighting and other materials used for indoor and hydroponic gardening in North America. Our signature brands include General Hydroponics , Gavita , Botanicare , Gro Pro , Mother Earth , Grower's Edge , HydroLogic Purification System and

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