A maker of lawn and garden products, Scotts Miracle-Gro sells fertilizers, grass seed, soils and pest controls under brands like Scotts Turf Builder, Miracle-Gro plant food and Ortho. The company traces back to 1868, when Civil War veteran O.M. Scott began selling weed-free grass seed from his Ohio hardware store, and to 1951, when nurseryman Otto Stern and adman Horace Hagedorn launched Miracle-Gro. The two merged in 1995, and the "Miracle-Gro" name was actually suggested by Hagedorn's first wife, Peggy.
Scotts sells Hawthorne to Vireo, removing the cannabis segment, as Q3 operating income falls 23.5% on higher charges.
Hawthorne is gone — the sale to Vireo closed in April, ending years of cannabis-related losses and impairments. from continuing operations rose 1.1% to $1,172.1 million in Q3, but fell 23.5% to $169.6 million as $48.2 million in , restructuring, and other charges hit the quarter. Scotts is now a pure-play U.S. Consumer lawn and garden company with a of 3.78 and a non-cash stake in Vireo to manage.
Key takeaways
The Hawthorne was sold to Vireo on April 8, 2026, for 213.0 million Vireo shares plus a warrant, resulting in a $101.8 million loss on sale recorded in for the nine months.
Q3 from continuing operations rose 1.1% to $1,172.1 million, driven by favorable U.S. Consumer mix toward branded products and higher volume in the Other .
contracted 0.9 points to 31.2%, as higher transportation costs more than offset favorable product mix and pricing gains.
Section summaries
Management's Discussion and Analysis
Q3 FY2026 net sales rose 1.1% to $1,172.1M, but income from operations fell 23.5% on higher impairment and restructuring charges.
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Q3 increased 1.1% to $1,172.1M, driven by favorable U.S. Consumer mix toward branded products and higher Other volume, while nine-month net sales rose 2.4% to $2,986.1M.
fell 23.5% to $169.6 million, weighed down by $48.2 million in , restructuring, and other charges — including $16.6 million in credit losses on convertible debt and other investments and $21.5 million in severance.
The improved to 3.78 at quarter-end, down from 3.71 in Q2, with $1,381.8 million of borrowing availability under the Seventh A&R Credit Agreement.
Nine-month was $195.2 million, essentially flat with the prior year's $197.2 million, as the company funded operations and the while continuing to reduce debt.
What changed
The Hawthorne sale, flagged as a watch item since FY2022, closed on April 8, 2026, for non-cash consideration of 213.0 million Vireo shares and a warrant; the $101.8 million loss on sale and $104.8 million Q1 valuation adjustment are now recorded, removing the 's drag from continuing operations.
U.S. Consumer Q3 profit fell 2.3% to $229.8 million, a reversal from the 11.5% profit growth in Q2, as a lower rate offset the benefit of favorable product mix.
The reached 3.78, extending the steady improvement from 4.10 at FY2025 year-end and 4.41 a year ago, and remains well below the 4.50 that took effect in Q1 FY2026.
for the first nine months was $195.2 million, nearly unchanged from $197.2 million a year ago, failing to close the gap to the $549.0 million generated in the first nine months of FY2024 — a watch item that remains unresolved.
Risk factors and legal proceedings are unchanged from the 2025 Annual Report, with no material developments in the securities class actions and derivative lawsuits that have been flagged since mid-2024.
What to watch
U.S. Consumer volume and pricing in Q4 FY2026, to see whether the 1.1% Q3 growth and favorable branded mix carry into the seasonally smallest quarter or whether the pressure from higher transportation costs persists.
Monetization or mark-to-market impact of the 213.0 million Vireo shares and warrant received in the Hawthorne sale — whether the company sells the stake for debt reduction or holds it, and any valuation changes that flow through the income statement.
generation in Q4, after only $195.2 million was generated in the first nine months, to see whether the full-year figure can fund the and further debt reduction now that Hawthorne is no longer a cash drain.
Advertising spend and SG&A trajectory — SG&A rose 12.0% in Q2 on a $19.4 million advertising increase; whether that elevated spend level continued into Q3 and what it yields in U.S. Consumer volume in the second half.
Q3 declined 90 to 31.2% on higher transportation costs, while nine-month gross margin rate improved 130 basis points to 35.7% on favorable mix, pricing, and material cost savings.
Q3 fell 23.5% to $169.6M, primarily due to $48.2M of , restructuring and other charges, including $16.6M in credit losses on convertible debt and other investments and $21.5M in severance.
U.S. Consumer profit fell 2.3% to $229.8M in Q3 on a lower , while Other segment profit rose 10.1% to $18.6M on higher and .
Nine-month was $195.2M, down from $197.2M, and the company had $1,381.8M of borrowing availability under its Seventh A&R Credit Agreement with a of 3.78.
The Hawthorne business was sold to Vireo on April 8, 2026 for non-cash consideration, resulting in a $101.8M loss on sale recorded in for the nine months.
Quantitative and Qualitative Disclosures About Market Risk
Management believes that there are no material changes to our quantitative and qualitative disclosures about market risks during the nine months ended June 27, 2026 compared to those disclosed in the 2025 Annual Report.
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Management believes that there are no material changes to our quantitative and qualitative disclosures about market risks during the nine months ended June 27, 2026 compared to those disclosed in the 2025 Annual Report.
Reference is made to the legal proceedings that have been previously disclosed in Part I, Item 3 of the 2025 Annual Report. There have been no material developments to the pending legal proceedings set forth therein. We are involved in other lawsuits and claims which arise in th…
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Reference is made to the legal proceedings that have been previously disclosed in Part I, Item 3 of the 2025 Annual Report. There have been no material developments to the pending legal proceedings set forth therein.
We are involved in other lawsuits and claims which arise in the normal course of our business relating to advertising claims, securities matters, employment disputes, product complaints and the enforcement and defense of intellectual property rights. In our opinion, these claims individually and in the aggregate are not expected to have a material adverse effect on our financial condition, results of operations or cash flows.