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What changed in SCOTTS MIRACLE-GRO CO's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of SCOTTS MIRACLE-GRO CO's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+450 added−458 removedSource: 10-K (2025-11-25) vs 10-K (2024-11-26)

Top changes in SCOTTS MIRACLE-GRO CO's 2025 10-K

450 paragraphs added · 458 removed · 360 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

55 edited+21 added−14 removed28 unchanged
Biggest changeIn addition, in 2021 the Biden Administration announced a multi-agency plan to address per- and polyfluoroalkyl substances (“PFAS”) contamination nationwide. Agencies, including the U.S. EPA, the Department of Defense, the Food and Drug Administration, the U.S.
Biggest changeRegulatory agencies around the world have been establishing programs and restrictions relating to preventing the release of per- and polyfluoroalkyl substances (“PFAS”) into the air, drinking water systems and food supply and to expand cleanup efforts to remediate the impacts of PFAS pollution. In 2021, the federal government announced a multi-agency plan to address PFAS contamination nationwide.
The lawn care category also includes spreaders and other durables under the Scotts ® brand name, including Turf Builder ® EdgeGuard ® spreaders and Whirl TM and Wizz TM handheld spreaders. Gardening and Landscape: The gardening and landscape category is designed to help consumers grow and enjoy flower and vegetable gardens and beautify landscaped areas.
The lawn care category also includes spreaders and other durables under the Scotts ® brand name, including Turf Builder ® EdgeGuard ® spreaders and Whirl TM and Wizz ® handheld spreaders. Gardening and Landscape: The gardening and landscape category is designed to help consumers grow and enjoy flower and vegetable gardens and beautify landscaped areas.
EPA in addition to various local, state and federal environmental and/or public health agencies. These regulations may restrict or ban the use of certain ingredients or categories of products altogether. Analogous regulatory regimes apply to certain pesticides that we sell or distribute in other countries.
EPA in addition to various local, state and federal environmental and/or public health agencies. These regulations may restrict or ban the use of certain ingredients or categories of products altogether. Analogous regulatory regimes apply to pesticides that we sell or distribute in other countries.
Fertilizer and growing media products are also subject to various laws and regulations, some of which require registration, mandate labeling requirements, and/or govern the sale and distribution of the products. Our grass seed products are regulated in the U.S. by the Federal Seed Act and various state regulations.
Fertilizer and growing media products are also subject to various laws and regulations, some of which require registration, mandate labeling requirements and/or govern the sale and distribution of the products. Our grass seed products are regulated in the U.S. by the Federal Seed Act and state regulations.
SEGMENT INFORMATION” of the Notes to Consolidated Financial Statements included in this Form 10-K. 1 Roundup ® is a registered trademark of Monsanto Technology LLC, a company affiliated with Monsanto Company. 2 Table of Contents Principal Products and Services In our reportable segments, we manufacture, market and sell lawn and garden products in the following categories: Lawn Care: The lawn care category is designed to help users grow and enjoy the lawn they want.
SEGMENT INFORMATION” of the Notes to Consolidated Financial Statements included in this Form 10-K. 1 Roundup ® is a registered trademark of Monsanto Technology LLC, a company affiliated with Monsanto Company. 2 Table of Contents Principal Products and Services In our segments, we manufacture, market and sell lawn and garden products in the following categories: Lawn Care: The lawn care category is designed to help users grow and enjoy the lawn they want.
The report maps our sustainability efforts to the United Nations Sustainable Development Goals and provides detailed information regarding our ESG strategy, focus areas and governance structure. The Company’s ESG focus areas are Product Stewardship and Safety, Operations and Supply Chain, Associate Engagement and Wellness, Community Engagement and Governance and Transparency.
The report maps our sustainability efforts to the United Nations Sustainable Development Goals and provides detailed information regarding our ESG strategy, focus areas and governance structure. Our ESG focus areas are Product Stewardship and Safety, Operations and Supply Chain, Associate Engagement and Wellness, Community Engagement and Governance and Transparency.
We file reports with the SEC and make available, free of charge, on or through our website, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as well as our proxy and information statements, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
We file reports with the SEC and make available, free of charge, on or through our website, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as well as our proxy and information statements, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
Consumer and Other segments, we are the leading manufacturer and 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.
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.
The Scotts ® , Miracle-Gro ® , Ortho ® , Tomcat ® , Hyponex ® , Earthgro ® , General Hydroponics ® , Gavita ® , Botanicare ® , Agrolux ® and Mother Earth ® brand names and logos, as well as a number of product trademarks, including Turf Builder ® , EZ Seed ® , Organic Choice ® , Home Defense Max ® , Nature Scapes ® , and Weed B Gon Max ® are registered in the United States and/or internationally and are considered material to our business.
The Scotts ® , Miracle-Gro ® , Ortho ® , Tomcat ® , Hyponex ® , Earthgro ® , General Hydroponics ® , Gavita ® , Botanicare ® and Mother Earth ® brand names and logos, as well as a number of product trademarks, including Turf Builder ® , EZ Seed ® , Organic Choice TM , Home Defense Max ® , Nature Scapes ® and Weed B Gon Max ® are registered in the United States and/or internationally and are considered material to our business.
We recognize that certain other stakeholders (such as customers, associates and non-governmental organizations) may be interested in more detailed information on these topics. We encourage you to review the “Supporting Our People” section of our 2024 Corporate Responsibility Report, located on our website at https://scottsmiraclegro.com/responsibility/environmental-social-and-governance, for more detailed information regarding our human capital programs and initiatives.
We recognize that certain other stakeholders (such as customers, associates and non-governmental organizations) may be interested in more detailed information on these topics. We encourage you to review the “Supporting Our People” section of our 2025 Corporate Responsibility Report, located on our website at https://scottsmiraclegro.com/responsibility/environmental-social-and-governance, for more detailed information regarding our human capital programs and initiatives.
RISK FACTORS — Risks Related to Our Business — Because of the concentration of our sales to a small number of retail customers, the loss of one or more of, or a significant reduction in orders from, any of our top customers, or a material reduction in the inventory of our products that they carry, could adversely affect our financial results” of this Form 10-K and “NOTE 20.
RISK FACTORS — Risks Related to Our Business — Because of the concentration of our sales to a small number of retail customers, the loss of one or more of, or a significant reduction in orders from, any of our top customers, or a material reduction in the inventory of our products that they carry, could adversely affect our financial results” of this Form 10-K and “NOTE 19.
Sufficient raw materials were available during fiscal 2024. Trademarks, Patents, Trade Secrets and Licenses We believe that our trademarks, patents, trade secrets and licenses provide us with significant competitive advantages. We pursue a vigorous trademark protection strategy consisting of registration, renewal and maintenance of key trademarks and proactive monitoring and enforcement activities to protect against infringement.
Sufficient raw materials were available during fiscal 2025. Trademarks, Patents, Trade Secrets and Licenses We believe that our trademarks, patents, trade secrets and licenses provide us with significant competitive advantages. We pursue a vigorous trademark protection strategy consisting of registration, renewal and maintenance of key trademarks and proactive monitoring and enforcement activities to protect against infringement.
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 2024.
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.
The Company continues to benchmark, set and make progress towards goals and seek continuous improvement around these focus areas. We publish our Corporate Responsibility Report and several ESG-related policies and statements on the ESG section of our corporate website, which is located at https://scottsmiraclegro.com/responsibility/environmental-social-and-governance. These policies and statements address environmental, health and safety and human rights concerns.
We continue to benchmark, set and make progress towards goals and seek continuous improvement around these focus areas. We publish our Corporate Responsibility Report and several ESG-related policies and statements on the ESG section of our corporate website, which is located at https://scottsmiraclegro.com/responsibility/environmental-social-and-governance. These policies and statements address environmental, health and safety and human rights concerns.
This includes diversity in terms of gender, sexuality, race, thoughts, interests, languages, beliefs and more. 6 Table of Contents Our employee resource groups (“ERGs”) are voluntary, associate-led groups typically formed by people with a common affinity such as gender, race, national origin, sexual orientation, military status or other attributes.
This includes diversity in terms of gender, sexuality, race, thoughts, interests, languages, beliefs and more. Our employee resource groups (“ERGs”) are voluntary, associate-led groups typically formed by people with a common affinity such as gender, race, national origin, sexual orientation, military status or other attributes.
Our key brands include General Hydroponics ® , Gavita ® , Botanicare ® , Agrolux ® , Gro Pro ® , Mother Earth ® , Grower’s Edge ® , HydroLogic Purification System ® and CYCO ® . Scotts Miracle-Gro traces its heritage to a company founded by O.M. Scott in Marysville, Ohio in 1868.
Our signature brands include General Hydroponics ® , Gavita ® , Botanicare ® , Gro Pro ® , Mother Earth ® , Grower’s Edge ® , HydroLogic Purification System ® and CYCO ® . Scotts Miracle-Gro traces its heritage to a company founded by O.M. Scott in Marysville, Ohio in 1868.
In addition, we face competition from smaller regional competitors that operate in many of the areas where we compete. In Canada, we face competition in the lawn and garden market from Premier Tech Ltd. and a variety of local companies including private label brands.
In addition, we face competition from smaller regional competitors that operate in many of the areas where we compete. 4 Table of Contents In Canada, we face competition in the lawn and garden market from Premier Tech Ltd. and a variety of local companies including private label brands.
Today, the Scotts ® , Turf Builder ® , Miracle-Gro ® , Ortho ® and Roundup ® brands make us the most widely recognized company in the consumer lawn and garden industry in the U.S. Business Segments We divide our business into the following reportable segments: • U.S. Consumer • Hawthorne • Other U.S.
Today, the Scotts ® , Miracle-Gro ® , Ortho ® and Roundup ® brands make us the most widely recognized company in the consumer lawn and garden industry in the U.S. Business Segments We divide our business into the following segments: • U.S. Consumer • Hawthorne • Other U.S.
Included within these numbers, during fiscal 2024, we employed a total of approximately 2,500 full-time and seasonal in-store associates within the United States to help our retail partners merchandise our products in their lawn and garden departments directly to consumers. Engagement Our success depends on the engagement of our associates.
Included within these numbers, during fiscal 2025, we employed a total of approximately 2,100 full-time and seasonal in-store associates within the United States to help our retail partners merchandise our products in their lawn and garden departments directly to consumers. Engagement Our success depends on the engagement of our associates.
It is possible, therefore, that some of these actions will have an impact – direct or indirect – on our business. Packaging has also become subject to increased governmental scrutiny in many states.
It is possible, therefore, that some of these actions will have an impact – direct or indirect – on our business. Packaging has also become subject to increased governmental scrutiny.
We maintain a Supplier Code of Conduct that establishes the minimum standards that suppliers must satisfy to sell goods to or do business with the Company. Further ESG initiatives in fiscal 2024 included responding to the Carbon Disclosure Project’s climate change and water questionnaires.
We maintain a Supplier Code of Conduct that establishes the minimum standards that suppliers must satisfy to sell goods to or do business with us. Further ESG initiatives in fiscal 2025 included responding to the Carbon Disclosure Project’s climate change and water questionnaires.
The contents of our corporate website are not incorporated by reference in this Form 10-K or in any other report or document we file with the Securities and Exchange Commission (the “SEC”). Associates As of September 30, 2024, we employed approximately 5,300 associates.
The contents of our corporate website are not incorporated by reference in this Form 10-K or in any other report or document we file with the Securities and Exchange Commission (the “SEC”). Associates As of September 30, 2025, we employed approximately 5,200 associates.
Products within this category include growing systems, trays, fans, filters, humidifiers, dehumidifiers, water pumps, irrigation supplies and hand tools. These products are marketed under the Botanicare ® , CAN-FAN TM , CAN-FILTERS ® , EcoPlus ® , Gro Pro ® , Grower’s Edge ® and Hydro-Logic Purification System ® brand names.
Products within this category include trays, fans, filters, humidifiers, dehumidifiers, water pumps and irrigation supplies. These products are marketed under the Botanicare ® , CAN-FAN TM , CAN-FILTERS ® , EcoPlus ® , Gro Pro ® , Grower’s Edge ® and Hydro-Logic Purification System ® brand names.
Seasonality and Backlog Our North America consumer lawn and garden business is highly seasonal, with approximately 75% of our annual net sales occurring in our second and third fiscal quarters combined.
Seasonality and Backlog Our North America consumer lawn and garden business is highly seasonal, with more than 75% of our annual net sales occurring in our second and third fiscal quarters combined.
Lighting : The lighting category is designed to provide growers a complete selection of lighting systems and components for use in hydroponic and indoor gardening applications. Products in this category include lighting sensors, controls, fixtures, cords and hangars, and are marketed under the Gavita ® , Agrolux ® and Titan ® brand names.
Lighting : The lighting category is designed to provide growers a complete selection of lighting systems and components for use in hydroponic and indoor gardening applications. Products in this category include lighting controls, fixtures, cords and hangars, and are marketed under the Gavita ® brand name.
Primary competitors include Spectrum Brands Holdings, Inc., Central Garden & Pet Company, Kellogg Garden Products, Oldcastle Retail, Inc., Lebanon Seaboard Corporation, Reckitt Benckiser Group plc, FoxFarm Soil & Fertilizer Company, Nanolux Technology, Inc., Sun Gro Horticulture, Inc., Advanced Nutrients, Ltd., SBM Life Science Corp., Woodstream Corporation, Sunday Lawn Care and Hydrofarm Holdings Group, Inc.
Primary competitors include Spectrum Brands Holdings, Inc., Central Garden & Pet Company, Kellogg Garden Products, Oldcastle Retail, Inc., Lebanon Seaboard Corporation, Reckitt Benckiser Group plc, FoxFarm Soil & Fertilizer Company, Nanolux Technology, Inc., Sun Gro Horticulture, Inc., The Procter & Gamble Company, Advanced Nutrients, Ltd., Jonathan Green, Inc., SBM Life Science Corp., Woodstream Corporation, This Land, Inc. dba Sunday Lawn Care and Hydrofarm Holdings Group, Inc.
Spending on research and development was $34.6 million, $35.7 million and $45.3 million in fiscal 2024, fiscal 2023 and fiscal 2022, respectively, including product registration costs of $9.0 million, $12.4 million and $13.0 million, respectively.
Spending on research and development was $34.8 million, $34.6 million and $35.7 million in fiscal 2025, fiscal 2024 and fiscal 2023, respectively, including product registration costs of $8.9 million, $9.0 million and $12.4 million, respectively.
Effective August 1, 2019, we entered into the Third Amended and Restated Exclusive Agency and Marketing Agreement (the “Third Restated Agreement”) pursuant to which we provide certain consumer and trade marketing program services, sales, merchandising, warehousing and other selling and marketing support for certain of Monsanto’s consumer Roundup ® branded products.
We are party to the Third Amended and Restated Exclusive Agency and Marketing Agreement (the “Third Restated Agreement”) pursuant to which we provide certain consumer and trade marketing program services, sales, merchandising, warehousing and other selling and marketing support for certain of Monsanto’s consumer Roundup ® branded products.
Products within this category include a complete line of water-soluble plant foods under the Miracle-Gro ® brand and sub-brands such as LiquaFeed ® ; continuous-release plant foods under the Miracle-Gro ® brand and sub-brands such as Shake ‘N Feed ® ; potting mixes, garden soils, ground cover and mulches under the Miracle-Gro ® , Scotts ® , Hyponex ® and Earthgro ® brand names; plant-related pest and disease control products under the Ortho ® brand; organic garden products under the Miracle-Gro ® Performance Organics ® , Miracle-Gro ® Organic, Miracle-Gro ® Organic Choice TM , Scotts ® and Whitney Farms ® brand names; and live goods and seeding solutions under the Miracle-Gro ® brand.
Products within this category include a complete line of water-soluble plant foods under the Miracle-Gro ® brand and sub-brands such as LiquaFeed ® ; continuous-release plant foods under the Miracle-Gro ® brand and sub-brands such as Shake ‘N Feed ® ; potting mixes, garden soils, ground cover and mulches under the Miracle-Gro ® , Scotts ® , Hyponex ® and Earthgro ® brand names; and organic garden products under the Miracle-Gro ® Organic, Miracle-Gro ® Organic Choice TM , Scotts ® and Whitney Farms ® brand names.
Recognizing there is significant value in hearing directly from our leadership team, we continue to host Town Hall meetings each quarter to disseminate enterprise-wide information and to allow for interactive communication. Diversity We value our associates’ diversity and encourage them to leverage their varied life experiences at our Company.
Recognizing there is value in hearing directly from our leadership team, we host Town Hall meetings each quarter to disseminate enterprise-wide information and enable direct communication between our leadership team and our associates. Diversity We value our associates’ diversity and encourage them to leverage their varied life experiences at our Company.
Financial information about these segments for each of the three fiscal years ended September 30, 2024, 2023 and 2022 is presented in “NOTE 20.
Financial information about our segments for each of the three fiscal years ended September 30, 2025, 2024 and 2023 is presented in “NOTE 19.
The expansion of our business may expand the regulatory oversight to which we are subject. If we enter new product categories and/or new jurisdictions, we may become subject to additional applicable legal and regulatory requirements. 5 Table of Contents For more information regarding how compliance with local, state, federal and foreign laws and regulations may affect us, see “ITEM 1A.
If we enter new product categories and/or new jurisdictions, we may become subject to additional applicable legal and regulatory requirements. For more information regarding how compliance with local, state, federal and foreign laws and regulations may affect us, see “ITEM 1A.
Principal Markets and Methods of Distribution We sell our products through our direct sales force, e-commerce website and network of brokers and distributors primarily to home centers, mass merchandisers, warehouse clubs, large hardware chains, independent hardware stores, nurseries, garden centers, e-commerce platforms, food and drug stores, indoor gardening and hydroponic product distributors, retailers and growers. 3 Table of Contents The majority of our shipments to customers are made via common carriers or through distributors in the U.S.
Principal Markets and Methods of Distribution We sell our products through our direct sales force, e-commerce website and network of brokers and distributors primarily to home centers, mass merchandisers, warehouse clubs, large hardware chains, independent hardware stores, nurseries, garden centers, e-commerce platforms, food and drug stores, indoor gardening and hydroponic product distributors, retailers and growers.
During peak sales and production periods in fiscal 2024, our workforce totaled approximately 7,100, comprised of approximately 6,200 associates including seasonal associates and approximately 900 in temporary labor.
During peak sales and production periods in fiscal 2025, our workforce totaled approximately 6,900, comprised of approximately 5,900 associates including seasonal associates and approximately 1,000 in temporary labor.
Products within this category include lawn fertilizer products under the Scotts ® and Turf Builder ® brand and sub-brand names; grass seed products under the Scotts ® , EZ Seed ® , PatchMaster ® and Thick’R Lawn TM brand and sub-brand names; and lawn-related weed, pest and disease control products primarily under the Scotts ® brand name, including sub-brands such as GrubEx ® .
SCOTT & Sons TM , Scotts ® , EZ Seed ® , PatchMaster ® and Thick’R Lawn TM brand and sub-brand names; and lawn-related weed, pest and disease control products primarily under the Scotts ® brand name, including sub-brands such as GrubEx ® .
To drive engagement, we take a purposeful approach focused on enhancing the associate experience centering on creating a positive workplace and fostering trust in leadership. We recognize that two-way communication enhances trust and improves collaboration and overall engagement. We gather associate feedback both formally and informally throughout the year through such initiatives as pulse surveys, leadership meetings and roundtable discussions.
To drive engagement, we take a purposeful approach focused on enhancing the associate experience centering on creating a positive workplace and fostering trust in leadership. We recognize that two-way communication between our associates and our leadership team builds trust and improves collaboration and overall engagement. We gather formal and informal associate feedback through pulse surveys, leadership meetings and roundtable discussions.
RISK FACTORS — Risks Related to Regulation of Our Company — Compliance with environmental and other public health regulations or changes in such regulations or regulatory enforcement priorities could increase our costs of doing business or limit our ability to market all of our products ” of this Form 10-K.
RISK FACTORS — Risks Related to Regulation of Our Company — Compliance with environmental and other public health regulations or changes in such regulations or regulatory enforcement priorities could increase our costs of doing business or limit our ability to market certain products ” of this Form 10-K. 5 Table of Contents Regulatory Matters We are subject to various regulatory proceedings, none of which are expected to be material to our business.
MARKETING AGREEMENT” of the Notes to Consolidated Financial Statements included in this Form 10-K. Acquisitions and Divestitures There were no material acquisitions or divestitures during fiscal 2024 or fiscal 2023. Refer to “NOTE 7. ACQUISITIONS AND INVESTMENTS” of the Notes to the Consolidated Financial Statements included in this Form 10-K for more information regarding fiscal 2022 acquisitions.
MARKETING AGREEMENT” of the Notes to Consolidated Financial Statements included in this Form 10-K. Acquisitions and Divestitures There were no material acquisitions or divestitures during fiscal 2025 or fiscal 2024.
Results from the fiscal 2024 Associate Experience Survey highlighted focus areas for fiscal 2024 and beyond. Another source of associate sentiment comes from exit interviews, when we ask for ratings, rankings and feedback from all salaried associates who voluntarily leave our organization. These valuable inputs are shared with senior leadership and integrated into practice as human capital initiatives are deployed.
Another source of associate sentiment comes from exit interviews, when we ask for ratings, rankings and feedback from all salaried associates who voluntarily leave our organization. These inputs are shared with senior leadership and integrated into practice as human capital initiatives are deployed. We believe that an informed workforce contributes to an engaged workforce.
We compete primarily on the basis of brand strength, product innovation, product quality, product performance, advertising, value, supply chain competency, field sales support, in-store sales support and the strength of our relationships with major retailers and distributors. 4 Table of Contents In the lawn and garden, pest control and indoor gardening and hydroponic markets, our products compete against private label as well as branded products.
We compete primarily on the basis of brand strength, product innovation, product quality, product performance, advertising, value, supply chain competency, field sales support, in-store sales support and the strength of our relationships with major retailers and distributors.
Our ERGs consist of the Scotts Associate Board, Scotts Associates For A Greener Earth, the Scotts Black Employees Network, the Scotts Christian Fellowship, Scotts Gro-Masters, Scotts GroPride, the Scotts Veterans Network, the Scotts Women’s Network and the Scotts Young Professionals.
Each ERG establishes a mission to cultivate relationships through networking and develop talent through experiences, programs and mentoring. Our ERGs consist of Scotts Associate Board, Scotts Associates For A Greener Earth, Scotts Black Employees Network, Scotts Christian Fellowship, Scotts Gro-Masters, Scotts GroPride, Scotts Veterans Network, Scotts Women’s Network and Scotts Young Professionals.
We had no material capital expenditures during the last three fiscal years related to environmental or regulatory matters. Human Capital We believe our culture and commitment to our associates provides unique value to us and our shareholders. Every associate, and every job, is important to our success and helping us achieve our purpose.
Human Capital We believe our culture and commitment to our associates provides unique value to us and our shareholders. Every associate, and every job, is important to our success and helping us achieve our purpose.
Consumer consists of our consumer lawn and garden business in the United States. Hawthorne consists of our indoor and hydroponic gardening business. Other primarily consists of our consumer lawn and garden business in Canada.
Consumer consists of our consumer lawn and garden business in the United States. Hawthorne consists of our indoor and hydroponic gardening business. Other primarily consists of our consumer lawn and garden business in Canada. Corporate consists of general and administrative expenses and certain other income and expense items not allocated to the reportable business segments.
Further, many states have taken action to address PFAS concerns ranging from appropriation legislation to funding scientific research, bans on certain categories of consumer products containing PFAS and/or broad prohibitions on PFAS across all products. Complicating this patchwork of state regulation is that various jurisdictions may define PFAS differently.
Further, many states have taken independent action to address PFAS ranging from appropriation bills for funding research to complete bans on any PFAS-containing products. Complicating this patchwork of state regulation is that various jurisdictions define PFAS differently with some definitions being comparatively broad.
We believe that an informed workforce contributes to an engaged workforce. As such, we have prioritized ensuring our associates have access to the information they need to understand the business decisions being made, the reasons behind them and how changes will impact them in their role.
As such, we ensure that our associates have access to the information that we believe they need to understand business decisions, the reasons behind them and how they may be impacted.
We primarily utilize third parties to manage the key distribution centers for our consumer lawn and garden business, which are strategically located across the U.S. and Canada. Growing media products are generally shipped direct-to-store without passing through a distribution center. Raw Materials We purchase raw materials for our products from various sources.
Growing media products are generally shipped direct-to-store without passing through a distribution center. 3 Table of Contents Raw Materials We purchase raw materials for our products from various sources.
For example, permits must be obtained in order to harvest peat and to discharge storm water run-off or water pumped from peat deposits. The permits typically specify the condition in which the property must be left after the peat is fully harvested, with the residual use typically being natural wetland habitats combined with open water areas.
In some locations, these facilities have been required to create water retention ponds to control the sediment content of discharged water. The permits typically specify the condition in which the property must be left after the peat is fully harvested, with the residual use typically being natural wetland habitats combined with open water areas.
Specifically, state legislation is seeking to reduce single use plastics and establish extended producer responsibility programs, which are designed to bolster the recycling industry by transferring the cost of packaging disposal to the manufacturers. Extended producer responsibility programs typically include targets and reporting responsibilities for, among other things, post-consumer recycling usage, compostable packaging, material reduction and refill strategies.
Several states in the U.S. have enacted legislation to reduce single use plastics and establish extended producer responsibility programs, which are designed to bolster the recycling industry by transferring the cost of packaging disposal to the manufacturers.
Regulatory Matters We are subject to various regulatory proceedings, none of which are expected to be material to our business. At September 30, 2024, $2.6 million was accrued for environmental matters. During fiscal 2024, fiscal 2023 and fiscal 2022, we expensed $0.1 million, $0.4 million and $0.2 million, respectively, for such environmental matters.
At September 30, 2025, $3.1 million was accrued for environmental matters. During fiscal 2025, fiscal 2024 and fiscal 2023, we expensed $0.5 million, $0.1 million and $0.4 million, respectively, for such environmental matters. We had no material capital expenditures during the last three fiscal years related to environmental or regulatory matters.
We endeavor to make our workforce more inclusive, our business more sustainable, and our communities more engaged by maintaining strong environmental, social and governance (“ESG”) practices. In fiscal 2024, we published our annual Corporate Responsibility Report, prepared in reference to the Global Reporting Initiative Standards (2021) and with consideration for the Sustainability Accounting Standards Board’s Chemicals industry standard.
In fiscal 2025, we published our annual Corporate Responsibility Report, prepared in reference to the Global Reporting Initiative Standards (2021) and with consideration for the Sustainability Accounting Standards Board’s Chemicals industry standard, the Task Force on Climate-Related Financial Disclosures and the California statutory greenhouse gas emission reporting requirements.
To further manage health and safety risks, we develop compliance calendars that highlight dates for health and safety inspections and deadlines to meet voluntary and regulatory requirements.
To further mitigate risks and align all team members to our EHS system, we use compliance calendars that highlight important dates for EHS inspections and deadlines to meet voluntary and regulatory requirements. We assess our health and safety performance using an EHS scorecard composed of leading and lagging indicators.
In addition, governmental agencies regulate the disposal, transport, handling and storage of waste, the remediation of contaminated sites, air and water discharges from our facilities, and workplace health and safety. Governmental authorities generally require operating facilities to obtain permits (sometimes on an annual basis) relating to site-specific conditions and/or activities.
In addition, governmental agencies regulate the disposal, transport, handling and storage of waste, the remediation of contaminated sites, air and water discharges from our facilities and workplace health and safety. Similar to pesticides, analogous international regulations apply to fertilizers, growing media and seeds that we sell or distribute outside of the United States.
Each year we conduct an analysis of our pay and compensation practices, from both an external market and internal consistency perspective, to ensure that our pay decisions are fair and equitable, adjusting as needed. To ensure transparency and understanding of our compensation programs, we have enhanced our education opportunities and communications for our managers and associates.
Each year, we conduct an analysis of our compensation amounts and practices from external market and internal consistency perspectives to ensure our compensation decisions are fair and competitive, and we make adjustments to those amounts and practices as we deem appropriate. We believe our associates should share our financial success.
Our managers support associates as development happens on the job through cross-functional team assignments, expanded roles and rotational assignments. Our ongoing development processes are designed to grow knowledge, improve skills and capabilities, and achieve competence in specific behaviors to meet performance expectations and prepare for potential future roles within our Company.
Our ongoing development efforts expand knowledge, improve skills and capabilities and achieve competence in specific behaviors to meet performance expectations and prepare for future roles. Our leadership team establishes enterprise goals, and each associate is asked to identify individual goals and align them to enterprise goals.
We use an EHS scorecard composed of leading and lagging indicators to evaluate our health and safety performance including progress measurements for safety training, behavioral-based safety observations, near-miss reporting, total recordable incident rate and lost time accident rate. 7 Table of Contents Environmental, Social and Governance Our stakeholders, including shareholders, customers, suppliers, associates, communities as well as the environment and society, are essential to our business.
Our evaluation includes progress measurements for safety training, behavioral-based safety observations, near-miss reporting, total recordable incident rate and lost time accident rate. Environmental, Social and Governance Our Board of Directors has ultimate oversight for sustainability matters while the Nominating and Governance Committee receives quarterly environmental, social and governance (“ESG”) briefings.
Removed
This division of reportable segments is consistent with how the segments report to and are managed by our Chief Executive Officer (the chief operating decision maker of the Company). In addition, Corporate consists of general and administrative expenses and certain other income and expense items not allocated to the reportable business segments.
Added
Products within this category include lawn fertilizer products under the Scotts ® , O.M. SCOTT & Sons TM and Turf Builder ® brand and sub-brand names; clover and grass seed products under the O.M.
Removed
Our Hawthorne segment is also impacted by seasonal sales patterns for certain product categories due to the timing of growing patterns in North America during our second and third fiscal quarters, and the timing of certain controlled agricultural lighting project sales during our third and fourth fiscal quarters.
Added
The majority of our shipments to customers are made via common carriers or through distributors in the U.S. We primarily utilize third parties to manage the key distribution centers for our consumer lawn and garden business, which are strategically located across the U.S. and Canada.
Removed
We are generally required by these permits to limit our harvesting and to restore the property consistent with the intended residual use. In some locations, these facilities have been required to create water retention ponds to control the sediment content of discharged water.
Added
In the lawn and garden, pest control and indoor gardening and hydroponic markets, our products compete against branded products as well as private label products.
Removed
Department of Agriculture, the Department of Homeland Security, and the Department of Health and Human Services, will take actions to prevent the release of PFAS into the air, drinking systems, and food supply and to expand cleanup efforts to remediate the impacts of PFAS pollution. As part of this announcement, the U.S.
Added
Governmental authorities generally require operating facilities to obtain permits (sometimes on an annual basis) relating to site-specific conditions and/or activities. For example, permits must be obtained to harvest peat and to discharge storm water run-off or water pumped from peat deposits.
Removed
EPA released its PFAS Strategic Roadmap: EPA’s Commitments to Action 2021-2024, which sets timelines by which the U.S. EPA plans to take specific actions during the Biden Administration.
Added
Further, in April 2024, the U.S. EPA designated two PFAS chemicals – perfluorooctanoic acid (“PFOA”) and perfluorooctanesulfonic acid (“PFOS”), including their salts and structural isomers – as hazardous substances under section 102(a) of the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), which could have wide-ranging impact on companies across industries.
Removed
In fiscal 2024, we surveyed our global associate population on topics spanning the employee experience. Categories included positive workplace, strong leadership, health & well-being, meaningful work, growth opportunity, trust in the organization and ethics. Engagement surveys provide us with insight into what we are doing well and where we have opportunities to improve.
Added
Extended producer responsibility programs typically include targets and reporting responsibilities for, among other things, post-consumer recycling usage, compostable packaging, material reduction and refill strategies. Similar extended producer responsibility programs are active in several Canadian provinces. The expansion of our business may expand the regulatory oversight to which we are subject.
Removed
Each ERG establishes a mission to positively impact the business by cultivating relationships through networking and developing talent through experiences, programs and mentoring. Our ERGs drive continuous improvement of our inclusive work environment and are open to all associates.
Added
In fiscal 2024, we conducted a global associate engagement survey focused on employee experience that provided us with insight into both areas of strength and opportunities for improvement. We used the results from this survey to develop action plans to drive improvement.
Removed
Professional Development We view development and retention of our associates as valuable components of our business operations and critical to creating a culture of leadership throughout our Company. Our associates have the opportunity to learn new skills through exposure and involvement in business challenges.
Added
Growth and Development We create authentic learning opportunities for our associates to develop throughout their careers through our blended development model which consists of experiential learning, exposure and formal education.
Removed
In fiscal 2024, we developed and implemented a leadership development framework for our people leaders, delivering on two key areas — leader accountabilities at the Company and critical skill training for our front line leaders.
Added
By embedding learning in day-to-day work, we encourage associates to embrace a growth mindset to promote personal and professional growth. 6 Table of Contents We support associate development through cross-functional team assignments, expanded roles and rotational opportunities.
Removed
Compensation and Benefits We believe financial health and mental wellness are core components of our associates’ overall well-being and we are committed to ensuring fair and competitive compensation to our associates based on their roles.
Added
This goal-setting exercise ensures all associates are aligned with Company objectives and establishes a foundation for individual growth and development. Compensation and Benefits We are committed to compensating our associates fairly and competitively based on their roles.
Removed
We also prioritize sharing our financial successes with associates through our incentive plans for eligible participants and our profit-sharing program and discretionary bonuses for those who are not incentive eligible. Through our LiveTotal Health program, we demonstrate our commitment to the overall well-being of our associates.
Added
We accomplish this through our incentive plans and our profit-sharing program. These compensation programs enable us to reward associates, from frontline hourly associates to our leadership team, for their contributions when the Company achieves its operational or financial objectives. Our benefit plans are designed to support total well-being, with healthcare coverage, wellness resources and supportive family leave and financial benefits.
Removed
In response to feedback from our most recent Associate Experience Survey, we enhanced our benefits to provide more comprehensive mental health support, including a broader range of services and improved access to mental healthcare. This focus on mental well-being is complemented by our suite of benefits, designed to meet the diverse needs of our workforce.
Added
Of special note are our retirement benefits, with a 7.5 percent match on 401(k) contributions, and our discounted stock purchase plan that makes ownership of common shares of Scotts Miracle-Gro (“Common Shares”) more accessible by allowing associates to buy Common Shares at a 15 percent discount.
Removed
Our offerings include healthcare coverage, family leave, 401(k) matching, and other essential benefits that support both our associates and their families. Additionally, we provide tailored benefits such as a discounted stock purchase plan, healthcare navigation and advocacy concierge services, structured reimbursement for adoption and surrogacy expenses, a Marysville onsite fitness facility, and limited reimbursement for well-being expenses.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

128 edited+22 added−21 removed94 unchanged
Biggest changeFor example, under our credit facility the maximum permitted leverage ratio is (i) 6.00 for the fourth quarter of fiscal 2024, (ii) 5.50 for the first quarter of fiscal 2025, (iii) 5.25 for the second quarter of fiscal 2025, (iv) 5.00 for the third quarter of fiscal 2025, (v) 4.75 for the fourth quarter of fiscal 2025 and (vi) 4.50 for the first quarter of fiscal 2026 and thereafter.
Biggest changeOur fixed charge coverage ratio was 1.42 for the twelve months ended September 30, 2025. Under the Seventh A&R Credit Agreement, the maximum permitted leverage ratio is 5.00 for the first quarter of fiscal 2026 and thereafter.
Further, sustained price increases may lead to declines in volume as competitors may not adjust their prices or customers and/or consumers may decide not to pay the higher prices, which could lead to sales declines and loss of market share.
Further, sustained price increases may lead to declines in volume as competitors may not adjust their prices or customers and consumers may decide not to pay the higher prices, which could lead to sales declines and loss of market share.
If our information or operational technology systems are damaged or cease to function properly for an extended period of time, whether as a result of a significant cyber-incident or any other adverse event, our ability to operate or communicate internally as well as with our retail customers, vendors, suppliers and other parties critical to our business, could be significantly impaired, which may adversely impact our business.
If our information or operational technology systems are damaged or cease to function properly for an extended period of time, whether as a result of a significant cyber incident or any other adverse event, our ability to operate or communicate internally as well with our retail customers, vendors, suppliers and other parties critical to our business, could be significantly impaired, which may adversely impact our business.
Although we have a robust portfolio of registered trademarks, we have not sought to register each of our marks either in the United States or in every country in which such mark is used.
Although we have a robust portfolio of registered trademarks, we have not sought to register each of our marks either in the United States or in every country in which each such mark is used.
Some of these suits may purport or may be determined to be class actions and/or involve parties seeking large and/or indeterminate amounts of damages, including punitive or exemplary damages, and may remain unresolved for several years.
Some of these suits may purport or be determined to be class actions and/or involve parties seeking large and/or indeterminate amounts of damages, including punitive or exemplary damages, and may remain unresolved for several years.
Although the Company has taken steps to reduce our exposure to variable rate debt instruments, if interest rates remain relatively high or increase in the future, we could see increases in our borrowing costs which could have a material adverse effect on our results of operations, financial condition and cash flows.
Although the Company has taken steps to reduce our exposure to variable rate debt instruments, if interest rates remain relatively high or increase in the future, we could see increases in our borrowing costs which could have a material adverse effect on our financial condition, results of operations and cash flows.
As a result, business decisions or other actions or omissions of controlling owners, management, or other persons or entities who control companies in which we invest may adversely affect the value of our investment, result in litigation or regulatory action against us, or otherwise damage our reputation. • Liability for or reputational harm from activities of the acquired company before the acquisition or from our strategic partners, including patent and trademark infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities. • Litigation or other claims in connection with the acquired company, including claims from terminated associates, customers, former shareholders or other third parties.
As a result, business decisions or other actions or omissions of controlling owners, management or other persons or entities who control companies in which we invest may adversely affect the value of our investment, result in litigation, commercial or regulatory action against us or otherwise damage our reputation. • Liability for or reputational harm from activities of the acquired company before the acquisition or from our strategic partners, including patent and trademark infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities. • Litigation or other claims in connection with the acquired company, including claims from terminated associates, customers, former shareholders or other third parties.
Our acquisitions, strategic alliances and investments could also result in dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities or amortization expenses, or impairment of goodwill and purchased long-lived assets, and restructuring charges, any of which could harm our financial condition or results of operations and cash flows.
Our acquisitions, strategic alliances and investments could also result in dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities or amortization expenses or impairment of goodwill and purchased long-lived assets, and restructuring charges, any of which could harm our financial condition, results of operations and cash flows.
The areas where we face risks include: • Assumptions implicit to our acquisition strategy or valuations are not realized. • Diversion of management time and focus from operating our business to acquisition integration challenges. • Failure to successfully further develop the acquired business or product lines. • Implementation or remediation of controls, procedures and policies at the acquired company. • Integration of the acquired company’s accounting, human resources and other administrative systems, and coordination of product, engineering and sales and marketing functions. • Transition of operations, users and customers onto our existing platforms. • Reliance on the expertise of our strategic partners with respect to market development, sales, local regulatory compliance and other operational matters. • Failure to obtain required approvals on a timely basis, if at all, from governmental authorities, or conditions placed upon approval, under competition and antitrust laws which could, among other things, delay or prevent us from completing a transaction, or otherwise restrict our ability to realize the expected financial or strategic goals of an acquisition. • In the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political and regulatory risks associated with specific countries. • Cultural challenges associated with integrating associates from the acquired company into our organization, and retention of associates from the businesses we acquire. 18 Table of Contents • Strategic investments in which we have a minority ownership stake and that we do not control may from time to time have economic, business, or legal interests or goals that are inconsistent with our goals.
The areas where we face risks include: • Assumptions implicit to our acquisition strategy or valuations are not realized. • Diversion of management time and focus from operating our business to acquisition integration challenges. • Failure to successfully further develop the acquired business or product lines. • Implementation or remediation of controls, procedures and policies at the acquired company. • Integration of the acquired company’s accounting, human resources and other administrative systems and coordination of product, engineering and sales and marketing functions. • Transition of operations, users and customers onto our existing platforms. • Reliance on the expertise of our strategic partners with respect to market development, sales, local regulatory compliance and other operational matters. • Failure to obtain required approvals on a timely basis, if at all, from governmental authorities, or conditions placed upon approval, under competition and antitrust laws which could, among other things, delay or prevent us from completing a transaction, or otherwise restrict our ability to realize the expected financial or strategic goals of an acquisition. • In the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political and regulatory risks associated with specific countries. • Cultural challenges associated with integrating associates from the acquired company into our organization, and retention of associates from the businesses we acquire. • Strategic investments in which we have a minority ownership stake and that we do not control may from time to time have economic, business or legal interests or goals that are inconsistent with our goals or the goals of regulators or business partners.
We may not have the resources or technical sophistication to anticipate or prevent rapidly-evolving types of cyber-attacks. Any such attacks or precautionary measures taken to prevent anticipated attacks may result in increasing costs, including costs for additional technologies, training and third-party consultants.
We may not have the resources or technical sophistication to anticipate or prevent rapidly evolving types of cyber attacks. Any such attacks or precautionary measures taken to prevent attacks may result in increasing costs, including costs for additional technologies, training and third-party consultants.
Our business could be negatively impacted by corporate citizenship and sustainability matters - including climate change - and/or our reporting of such matters. Certain investors, customers, consumers, associates, governmental authorities and other stakeholders are increasing their focus on corporate citizenship and sustainability matters (including climate changes).
Our business could be negatively impacted by corporate citizenship and sustainability matters (including climate change) and/or our reporting of such matters. Certain investors, customers, consumers, associates, governmental authorities and other stakeholders are increasing their focus on corporate citizenship and sustainability matters (including climate change).
From time to time, we communicate certain initiatives, including goals, regarding environmental matters, responsible sourcing and social investments, including pursuant to our Corporate Responsibility Report. We could fail, or be perceived to fail, to achieve such initiatives or goals, or we could fail to fully and accurately report our progress on such initiatives and goals.
From time to time, we communicate certain initiatives, such as goals, regarding environmental matters, responsible sourcing and social investments, including pursuant to our Corporate Responsibility Report. We could fail, or be perceived to fail, to achieve such initiatives or goals, or we could fail to fully and accurately report our progress on such initiatives and goals.
We cannot provide assurance that we will not undertake additional workforce reductions or that we will be able to realize the cost savings and other anticipated benefits from our previous or any future workforce reduction plans.
We cannot provide any assurance that we will not undertake additional workforce reductions or that we will be able to realize the cost savings and other anticipated benefits from any of our previous or future workforce reduction plans.
There can be no assurances that our marketing strategies will be effective or that the amount we invest in advertising activities will result in a corresponding increase in sales of our products.
There can be no assurances that our marketing strategies will be effective or that the amount we invest in marketing activities will result in a corresponding increase in sales of our products.
Also, our ability to finance the development of climate resilient product offerings may suffer if consumers become less engaged in lawn and gardening. Our failure to adequately manage the consumer and retail impacts of climate change could have a material adverse effect on our financial condition, results of operations and cash flows.
Our ability to finance the development of climate appropriate product offerings may also suffer if consumers become less engaged in lawn and gardening. Our failure to adequately manage the consumer and retail impacts of climate change could have a material adverse effect on our financial condition, results of operations and cash flows.
Prior to fiscal 2022, we generally increased the cash dividends on our Common Shares as well as engaged in share repurchase activity. Since fiscal 2022, we have not changed the dividend amount nor have we engaged in share repurchase activity outside of our compensation programs. As of September 30, 2024, we do not have a board authorized share repurchase program.
Prior to fiscal 2022, we generally increased the cash dividends on our Common Shares as well as engaged in share repurchase activity. Since fiscal 2022, we have not changed the dividend amount nor have we engaged in share repurchase activity outside of our compensation programs. As of September 30, 2025, we do not have a board authorized share repurchase program.
Forward-looking statements in this Form 10-K and our 2024 Annual Report are predictions only and actual results could differ materially from management’s expectations due to a variety of factors, including those described below.
Forward-looking statements in this Form 10-K and our 2025 Annual Report are predictions only and actual results could differ materially from management’s expectations due to a variety of factors, including those described below.
For example, certain countries and 38 U.S. states have adopted frameworks that authorize, regulate, and tax the cultivation, processing, sale, and use of cannabis for medicinal and/or non-medicinal use, while the U.S. Controlled Substances Act and the laws of other U.S. states prohibit growing cannabis.
For example, certain countries and 39 U.S. states have adopted frameworks that authorize, regulate and tax the cultivation, processing, sale and use of cannabis for medicinal and/or non-medicinal use, while the U.S. Controlled Substances Act and the laws of other U.S. states prohibit growing cannabis.
The forward-looking statements that we make in this Form 10-K and our 2024 Annual Report are based on management’s current views and assumptions regarding future events and speak only as of their dates.
The forward-looking statements that we make in this Form 10-K and our 2025 Annual Report are based on management’s current views and assumptions regarding future events and speak only as of their dates.
Such disruptions could require us to take measures to conserve cash until the markets stabilize or until alternative credit arrangements or other funding for our business needs can be arranged. Acquisitions, other strategic alliances and investments could result in operating difficulties, dilution, and other harmful consequences that may adversely impact our business and results of operations.
Such disruptions could require us to take measures to conserve cash until the markets stabilize or until alternative credit arrangements or other funding for our business needs can be arranged. 18 Table of Contents Acquisitions, other strategic alliances and investments could result in operating difficulties, dilution and other harmful consequences that may adversely impact our business and results of operations.
Operations at our and our suppliers’ facilities are subject to disruption for a variety of reasons, including fire, flooding or other natural disasters, disease outbreaks or pandemics, acts of war, terrorism, government shutdowns and work stoppages.
Operations at our and our suppliers’ facilities are subject to disruption for a variety of reasons, including fire, flooding or other natural disasters, pandemics, acts of war, terrorism, government shutdowns and work stoppages.
Consequently, we may have to cease use of those chemicals and/or be forced to substitute less effective or more expensive alternatives to continue manufacturing and/or distributing such goods. A substantial increase in liability exposure or the loss of customers or product offerings could each have a material adverse effect on our results of operations and financial condition.
Consequently, we may have to cease use of those chemicals and/or substitute less effective or more expensive alternatives to continue manufacturing and/or distributing such goods. A substantial increase in liability exposure or the loss of customers or product offerings could have a material adverse effect on our results of operations and financial condition.
Our ability to manage our inventory levels to meet our customers’ demand for our products is important for our business. Our production levels and inventory management goals for our products are based on estimates of demand, taking into account production capacity, timing of shipments, and inventory levels.
Our ability to manage our inventory levels to meet our customers’ demand for our products is important for our business. Our production levels and inventory management goals for our products are based on estimates of demand and take into account production capacity, timing of shipments and inventory levels.
An operational failure or breach of security from increasingly sophisticated cyber-threats could lead to loss, misuse or unauthorized disclosure of this information about our associates or consumers, which may result in regulatory or other legal proceedings, and have a material adverse effect on our business and reputation.
An operational failure or breach of security from increasingly sophisticated cyber threats could lead to the loss, misuse or unauthorized disclosure of this information about our customers, consumers, associates and suppliers, which may result in regulatory or other legal proceedings, and have a material adverse effect on our business and reputation.
A significant product liability, legal judgment or a related regulatory enforcement action against us, or a significant product recall or voluntary withdrawal, may materially and adversely affect our business, financial condition and results of operation.
A significant product liability, legal judgment or a related regulatory enforcement action against us, or a significant product recall or voluntary withdrawal, may materially and adversely affect our business, financial condition and results of operations.
In particular, the carrying value of deferred tax assets, which are predominantly related to our operations in the United States, is dependent on our ability to generate future taxable income of the appropriate character in the relevant jurisdiction. 21 Table of Contents From time to time, tax proposals are introduced or considered by the U.S.
In particular, the carrying value of deferred tax assets, which are predominantly related to our operations in the United States, is dependent on our ability to generate future taxable income of the appropriate character in the relevant jurisdiction. From time to time, tax proposals are introduced or considered by the U.S.
If we are unable to effectively provide for the succession of senior management, including our chief executive officer, our business, prospects, results of operations, financial condition and cash flows may be materially adversely affected. Our workforce reductions may cause undesirable consequences and adversely affect our business and results of operations.
If we are unable to effectively provide for the succession of senior management, including our Chief Executive Officer, our business, prospects, financial condition, results of operations and cash flows may be materially adversely affected. 16 Table of Contents Our workforce reductions may cause undesirable consequences and adversely affect our business and results of operations.
This workforce reduction may yield unintended consequences, such as attrition beyond our intended reduction in workforce and reduced employee morale, which may cause our associates who were not affected by the reduction in workforce to seek alternate employment. Associates whose positions were eliminated or those who determine to seek alternate employment may seek employment with our competitors.
These workforce reductions may yield unintended consequences, such as attrition beyond our intended reduction in workforce and reduced employee morale, which may cause our associates who were not affected by the workforce reductions to seek alternate employment. Associates whose positions were eliminated or those who determine to seek alternate employment may seek employment with our competitors.
High-profile security breaches of the information systems of a number of U.S. companies and/or government agencies may result in increased regulations and new security laws.
High profile security breaches of the information systems of a number of U.S. companies and/or government agencies may result in increased regulations and new data privacy and security laws.
The volatility of the insurance and reinsurance markets are also subject to macroeconomic conditions and events that are outside of our control. 14 Table of Contents Additionally, it is possible one or more of our insurers could specifically exclude from our policy certain chemicals used in our products.
The volatility of the insurance and reinsurance markets are also subject to macroeconomic conditions and events that are outside of our control. Additionally, it is possible one or more of our insurers could specifically exclude from our policy certain chemicals used in our products.
Hagedorn Partnership, L.P.’s interests could differ from, or conflict with, the interests of other shareholders. ITEM 1B. UNRESOLVED STAFF COMMENTS None. 22 Table of Contents
Hagedorn Partnership, L.P.’s interests could differ from, or conflict with, the interests of other shareholders. ITEM 1B. UNRESOLVED STAFF COMMENTS None. 23 Table of Contents
For example, our debt level could: • make it more difficult for us to satisfy our obligations with respect to our indebtedness; • make us more vulnerable to general adverse economic and industry conditions; • require us to dedicate a substantial portion of cash flows from operating activities to payments on our indebtedness, which would reduce the cash flows available to fund working capital, capital expenditures, advertising, research and development efforts, pay dividends, repurchase our Common Shares and other general corporate activities; • limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; • limit our ability to borrow additional funds; • expose us to risks inherent in interest rate fluctuations because some of our borrowings are at variable rates of interest, which could result in higher interest expense in the event of increases in interest rates; and • place us at a competitive disadvantage compared to our competitors that have less debt.
For example, our debt level could: • make it more difficult for us to satisfy our obligations with respect to our indebtedness; • make us more vulnerable to general adverse economic and industry conditions; • require us to dedicate a substantial portion of cash flows from operating activities to payments on our indebtedness, which would reduce the cash flows available to fund working capital, capital expenditures, advertising, research and development efforts, dividends, Common Share repurchases and other general corporate activities; • limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; • limit our ability to borrow additional funds; 17 Table of Contents • expose us to risks inherent in interest rate fluctuations because some of our borrowings are at variable rates of interest, which could result in higher interest expense in the event of increases in interest rates; and • place us at a competitive disadvantage compared to our competitors that have less debt.
The hedge agreements are designed to mitigate the earnings and cash flow fluctuations associated with the costs of urea and fuel. In periods of declining prices, utilizing these hedge agreements may effectively increase our expenditures for these raw materials.
The hedging agreements are designed to mitigate the earnings and cash flow fluctuations associated with the costs of urea and fuel. In periods of declining prices, utilizing these hedge agreements may effectively increase our expenditure for these raw materials.
Some of our competitors have significant financial resources. The strong competition that we face in all of our markets may prevent us from achieving our revenue goals, which may have a material adverse effect on our financial condition, results of operations and cash flows. Our manufacturing operations, including our reliance on third-party manufacturers, could harm our business.
The strong competition that we face in all of our markets may prevent us from achieving our revenue goals, which may have a material adverse effect on our financial condition, results of operations and cash flows. Our manufacturing operations, including our reliance on third-party manufacturers, could harm our business.
RISK FACTORS Cautionary Note Regarding Forward-Looking Statements This Form 10-K, including the exhibits hereto and the information incorporated by reference herein, as well as our 2024 Annual Report to Shareholders (our “2024 Annual Report”), contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to risks and uncertainties.
RISK FACTORS Cautionary Note Regarding Forward-Looking Statements This Form 10-K, including the exhibits hereto and the information incorporated by reference herein, as well as our 2025 Annual Report to Shareholders (our “2025 Annual Report”), contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act, which are subject to risks and uncertainties.
In addition, several provinces in Canada have adopted regulations that substantially restrict our ability to market and sell certain consumer pesticide products. Under the Food Quality Protection Act, enacted by the U.S. Congress in 1996, food-use pesticides are evaluated to determine whether there is reasonable certainty that no harm will result from the cumulative effects of pesticide exposures.
In addition, several provinces in Canada have adopted regulations that substantially restrict our ability to market and sell certain consumer pesticide products. Under the Food Quality Protection Act, food-use pesticides are evaluated to determine whether there is reasonable certainty that no harm will result from the cumulative effects of pesticide exposures. Under this Act, the U.S.
This may increase our warehousing costs or result in excess inventory that may become difficult to manage, unusable or obsolete and adversely impact our ability to realize anticipated returns from product sales.
Carrying additional inventory may increase our warehousing costs and result in excess inventory that may become difficult to manage, unusable or obsolete and adversely impact our ability to realize anticipated returns from product sales.
In addition, if we continue to reduce our workforce, it may adversely impact our ability to respond rapidly to any new product, growth or revenue opportunities and to execute our business plans. Additionally, reductions in workforce may make it more difficult to recruit and retain associates if they perceive uncertainty in employment.
In addition, continued workforce reductions may adversely impact our ability to respond rapidly to any new product, growth or revenue opportunities and to execute our business plans. Additionally, workforce reductions may make it more difficult to recruit and retain associates if they perceive uncertainty in employment.
The need to obtain such approval could delay the launch of new products or product innovations that contain active ingredients or otherwise prevent us from developing and manufacturing certain products and product innovations. Our marketing activities may not be successful. We invest substantial resources in advertising, consumer promotions and other marketing activities to maintain, extend and expand our brand image.
The need to obtain such approval could delay the launch of new products or product innovations or otherwise prevent us from developing and manufacturing certain products and product innovations. Our marketing activities may not be successful. We invest substantial resources in advertising, consumer promotions and other marketing activities to maintain and expand our brand image.
A failure to pay dividends, an inability to resume increases of our cash dividends or an inability to begin repurchasing Common Shares at historical levels could result in a lower market valuation of our Common Shares. Hagedorn Partnership, L.P. beneficially owns approximately 24% of our Common Shares and can significantly influence decisions that require the approval of shareholders.
A failure to pay dividends, an inability to resume increases of our cash dividends or an inability to begin repurchasing Common Shares at historical levels could result in a lower market valuation of our Common Shares. 22 Table of Contents Hagedorn Partnership, L.P. beneficially owns approximately 23% of our Common Shares and can significantly influence decisions that require the approval of shareholders.
If the perception of our brands or organizational reputation are damaged, our consumers, distributors and retailers may react negatively, which could materially and adversely affect our business, financial condition and results of operations. We believe we have built our reputation on the efficacy and safety of our brands.
If the perception of our brands or organizational reputation are damaged, our consumers, distributors and retailers may react negatively, which could materially and adversely affect our business, financial condition and results of operations. We believe we have built our reputation on the trust of consumers and performance of our brands.
Forward-looking statements also include, but are not limited to, statements regarding our future economic and financial condition and results of operations, the plans and objectives of management and our assumptions regarding our performance and such plans and objectives, as well as the amount and timing of dividends and repurchases of common shares of Scotts Miracle-Gro (“Common Shares”) or other uses of cash flows.
Forward-looking statements also include, but are not limited to, statements regarding our future economic and financial condition and results of operations, the plans and objectives of management and our assumptions regarding our performance and such plans and objectives, as well as the amount and timing of dividends and repurchases of Common Shares or other uses of cash flows.
We cannot provide any assurance that the holders of such indebtedness would waive a default or that we would have the resources to pay the accelerated indebtedness in full. Subject to compliance with certain covenants under our credit facility and the indentures governing the Senior Notes, we may incur additional debt in the future.
We cannot provide any assurance that the holders of such indebtedness would waive a default or that we would have the resources to pay the accelerated indebtedness in full. Subject to compliance with certain covenants under the Seventh A&R Credit Agreement and the indentures governing the Senior Notes, we may incur additional debt in the future.
While we have taken steps to ensure the security of our information and operational technology systems, including those of our customers, vendors, suppliers and other third-party service providers on whom we rely, our systems, as well the systems utilized by our customers, vendors, suppliers and other third-party service providers, have, in the past, been and may, in the future, be vulnerable to cyber threats such as malware, security breaches, phishing attacks, unauthorized activity, system failures, defects, unintentional or malicious actions of associates, contractors, and bad actors (e.g., cyber criminal groups, nation state actors and hacktivist organizations).
While we have taken steps to ensure the security of our information and operational technology systems, including those of our customers, vendors, suppliers and other third-party service providers on whom we rely, our systems, as well the systems utilized by our customers, vendors, suppliers and other third-party service providers, have, in the past, been and may, in the future, be vulnerable to cyber threats such as malware, security breaches, phishing attacks, unauthorized activity, system failures, defects, unintentional or malicious actions of associates, contractors and bad actors (e.g., cyber criminal groups, nation state actors and hacktivist organizations). 14 Table of Contents We have experienced and may continue to experience an increase in the number of such cyber threats.
As consumers demonstrate greater reliance on e-commerce channels, the success of our business depends on our investment in e-commerce platforms, consumer preferences and buying trends relating to e-commerce, and our ability to both maintain the continuous operation of our online store and our fulfillment operations that support both our own and our retail customers’ e-commerce platforms.
As consumers increasingly utilize e-commerce channels, the success of our business depends on our investment in e-commerce platforms, consumer preferences and buying trends relating to e-commerce, and our ability to both maintain the continuous operation of our online store and our fulfillment operations that support both our own and our retail customers’ e-commerce platforms.
Unanticipated changes in our tax provisions, the adoption of new tax legislation or exposure to additional tax liabilities could affect our profitability and cash flows. We are subject to income and other taxes in the United States federal jurisdiction and various local, state and foreign jurisdictions.
Unanticipated changes in our tax provisions, the adoption of new tax legislation or exposure to additional tax liabilities could affect our financial condition, results of operations and cash flows. We are subject to income and other taxes in the United States federal jurisdiction and various local, state and foreign jurisdictions.
Utilizing these hedge agreements exposes us to certain counterparty risks. The failure of one or more of the counterparties to fulfill their obligations under the hedge agreements, whether as a result of weakening financial stability or otherwise, could adversely affect our financial condition, results of operations or cash flows.
Utilizing these hedge agreements exposes us to certain counterparty risks. The failure of one or more of the counterparties to fulfill their obligations under the hedge agreements, whether because of weakening financial stability or otherwise, could adversely affect our financial condition, results of operations and cash flows.
Hagedorn Partnership, L.P. beneficially owned approximately 24% of our outstanding Common Shares as of November 18, 2024. As a result, it has sufficient voting power to significantly influence the election of directors and the approval of other actions requiring the approval of our shareholders, including entering into certain business combination transactions.
Hagedorn Partnership, L.P. beneficially owned approximately 23% of our outstanding Common Shares as of November 21, 2025. As a result, it has sufficient voting power to significantly influence the election of directors and the approval of other actions requiring the approval of our shareholders, including entering into certain business combination transactions.
Our operations are dependent on our ability to protect our infrastructure against damage from catastrophe, natural disaster, or severe weather, as well as events resulting from unauthorized security breach, power loss, telecommunications failure, terrorist attack, pandemic, or other events that could have a significant disruptive effect on our operations.
Our operations depend on our ability to protect our infrastructure against damage from catastrophe, natural disaster or severe weather, as well as events resulting from unauthorized security breach, power loss, telecommunications failure, act of war, terrorist attack, pandemic or other events that could have a significant disruptive effect on our operations.
Our exposure to credit losses on these financing balances and strategic investments will depend on the financial condition of these counterparties as well as legal, regulatory and macroeconomic factors beyond our control, such as deteriorating conditions in the world economy or in the industries served by the borrowers and federal legalization of the U.S. cannabis market.
Our exposure to credit losses on these financing balances and strategic investments will depend on the financial condition of these counterparties as well as legal, regulatory and macroeconomic factors beyond our control, such as deteriorating conditions in the world economy or in the industries served by the borrowers.
Our insurance coverage may not be sufficient to avoid or effectively mitigate the material impact on our financial position or results of operations resulting from claims or liabilities against us, and we may not be able to obtain appropriate insurance coverage in the future.
Our insurance coverage may not be sufficient to avoid or effectively mitigate or transfer the adverse impact of claims or liabilities against us on our financial position or results of operations and we may not be able to obtain appropriate insurance coverage in the future.
LEGAL PROCEEDINGS” of this Form 10-K. We cannot predict with certainty the outcomes of these legal proceedings and other contingencies, and the costs incurred in litigation can be substantial, regardless of the outcome. Substantial unanticipated verdicts, fines and rulings do sometimes occur.
We cannot predict with certainty the outcomes of these legal proceedings and other contingencies, and the costs incurred in litigation can be substantial, regardless of the outcome. Substantial unanticipated verdicts, fines and rulings do sometimes occur.
Under this Act, the U.S. EPA is evaluating the cumulative and aggregate risks from dietary and non-dietary exposures to pesticides. The pesticides in our products, certain of which may be also used on crops processed into various food products, are manufactured by independent third parties and continue to be evaluated by the U.S.
EPA is evaluating the cumulative and aggregate risks from dietary and non-dietary exposures to pesticides. The pesticides in our products, certain of which may be also used on crops processed into various food products, are manufactured by independent third parties and continue to be evaluated by the U.S. EPA as part of this exposure risk assessment. The U.S.
If we are unable to effectively execute our e-commerce business, our reputation and operating results may be harmed. We sell certain of our products over the Internet through our online store and our retail customer’s e-commerce retail platforms.
If we are unable to effectively execute our e-commerce business, our reputation and operating results may be harmed. We sell certain of our products through our online store and our retail customers’ e-commerce retail platforms.
Our international operations make us susceptible to the costs and risks associated with operating internationally. We operate manufacturing, sales and service facilities outside of the United States, particularly in Canada, the Netherlands, Mexico and China.
Our international operations subject us to the costs and risks associated with operating internationally. We operate manufacturing, sales and service facilities outside of the United States, particularly in Canada and Mexico.
Moreover, the obligations of the lenders under our credit facility are several and not joint and, as a result, a funding default by one lender does not need to be made up by the others.
Moreover, the obligations of the lenders under the Seventh A&R Credit Agreement are several and not joint and, as a result, a funding default by one lender does not need to be made up by the others.
It is essential that these platforms provide a shopping experience that will generate orders and return visits to the respective platforms.
It is essential that these platforms provide a shopping experience that will generate orders and return visits.
A significant interruption in the operation of our or our suppliers’ facilities could significantly impact our capacity to produce products and service our customers in a timely manner, which could have a material adverse effect on our revenues, earnings and financial position, particularly with respect to products that we manufacture at a limited number of facilities, such as our fertilizer and liquid products.
A significant interruption in the operation of our or our suppliers’ facilities could significantly impact our capacity to manufacture products and supply our products in a timely manner, particularly with respect to products that we manufacture at a limited number of facilities such as our fertilizer and liquid products, which could have a material adverse effect on our results of operations and financial position.
In addition, our efforts to remain competitive with technology trends, including the use of new or improved technology, creative user interfaces and other e-commerce marketing tools such as paid search and mobile applications, among others, may increase our costs and may not increase sales or attract consumers.
In addition, our efforts to remain competitive with technology trends, including the use of new or improved technology such as generative artificial intelligence powered search platforms, creative user interfaces and other e-commerce marketing tools such as paid search and mobile applications may increase our costs but may not increase sales or attract consumers.
An economic downturn and economic uncertainty may adversely affect demand for our products. We have observed increased economic uncertainty in the U.S. including the potential for an economic recession. Impacts of such general economic weakness include, without limitation: reduced credit availability; reduced liquidity; volatility in credit, equity and foreign exchange markets; bankruptcies and rising interest rates.
An economic downturn and economic uncertainty may adversely affect demand for our products. There are indications of increased economic uncertainty in the U.S. including the potential for an economic recession. Impacts of such general economic weakness include, without limitation: reduced credit availability; reduced liquidity; volatility in credit, equity and foreign exchange markets; increasing job losses, bankruptcies and rising interest rates.
A breach of any of these financial ratio covenants or other covenants could result in a default and/or a cross default under the credit facility and Senior Notes, as applicable.
A breach of any of the financial ratio covenants or other covenants in the Seventh A&R Credit Agreement or Senior Notes could result in a default and/or a cross default under the Seventh A&R Credit Agreement or Senior Notes, as applicable.
We may experience disruptions to the transportation channels used to distribute our products, including increased congestion, a lack of transportation capacity, increased fuel expenses, import or export controls or delays, and labor disputes or shortages.
Disruptions to transportation channels that we use to distribute our products may adversely affect our margins and profitability. We may experience disruptions to the transportation channels we use to distribute our products, including increased congestion, a lack of transportation capacity, increased fuel expenses, import or export controls or delays and labor disputes or shortages.
Accordingly, we are subject to risks associated with operating in foreign countries, including: • fluctuations in currency exchange rates; • limitations on the remittance of dividends and other payments by foreign subsidiaries; • additional costs of compliance with local regulations; • historically, in certain countries, higher rates of inflation than in the United States; • changes in the economic conditions or consumer preferences or demand for our products in these markets; • restrictive actions by multinational governing bodies, foreign governments or subdivisions thereof; • changes in foreign labor laws and regulations affecting our ability to hire and retain associates; • changes in U.S. and foreign laws regarding trade and investment, including the impact of tariffs; • less robust protection of our intellectual property under foreign laws; and • difficulty in obtaining distribution and support for our products, including the impact of shipping port delays.
Accordingly, we are subject to risks associated with operating in foreign countries, including: • fluctuations in currency exchange rates; • limitations on the remittance of dividends and other payments by foreign subsidiaries; • additional costs of compliance with local regulations; • historically, in certain countries, higher rates of inflation than in the United States; • changes in the economic conditions or consumer preferences or demand for our products in these markets; • restrictive actions by multinational governing bodies, foreign governments or subdivisions thereof; • changes in foreign labor laws and regulations affecting our ability to hire and retain associates; • changes in U.S. and foreign laws regarding trade and investment, including the impact of tariffs; • less robust protection of our intellectual property under foreign laws; and • difficulty in obtaining distribution and support for our products, including the impact of shipping port delays. 11 Table of Contents In addition, our operations outside the United States are subject to the risk of new and different legal and regulatory requirements in local jurisdictions, potential difficulties in staffing and managing local operations and potentially adverse tax consequences.
Monsanto may also terminate the Third Restated Agreement in the event of (a) a change of control of Monsanto or a sale of the Roundup ® business effective at the end of the fifth full year after providing notice of termination, subject to certain terms and conditions as set forth in the applicable agreements, or (b) Monsanto’s decision to decommission the permits, licenses and registrations needed for, and the trademarks, trade names, packages, copyrights and designs used in, the sale of the Roundup ® products in the lawn and garden market (a “Brand Decommissioning Event”), but, in each case, Monsanto would have to pay a termination fee to the Company.
In addition, if Program EBIT (as defined in the Third Restated Agreement) falls below $50.0 million in any program year, Monsanto may terminate the Third Restated Agreement without paying a termination fee to the Company, subject to certain terms and conditions as set forth therein. 15 Table of Contents Monsanto may also terminate the Third Restated Agreement in the event of (a) a change of control of Monsanto or a sale of the Roundup ® business effective at the end of the fifth full year after providing notice of termination, subject to certain terms and conditions as set forth in the applicable agreements, or (b) Monsanto’s decision to decommission the permits, licenses and registrations needed for, and the trademarks, trade names, packages, copyrights and designs used in, the sale of the Roundup ® products in the lawn and garden market (a “Brand Decommissioning Event”), but, in each case, Monsanto would have to pay a termination fee to the Company.
Our ability to make payments on or to refinance our indebtedness, fund planned capital expenditures and acquisitions, pay dividends and repurchase our Common Shares will depend on our ability to generate cash in the future which, to some extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.
Our ability to make payments on or to refinance our indebtedness (including, for example, our 5.250% Senior Notes due 2026 (the “5.250% Senior Notes”)), fund planned capital expenditures and acquisitions, pay dividends and repurchase our Common Shares will depend on our ability to generate cash in the future which, to some extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.
Our top two retail customers, The Home Depot and Lowe’s, together accounted for 48% of our fiscal 2024 net sales and 18% of our outstanding accounts receivable as of September 30, 2024.
Our top two retail customers, The Home Depot and Lowe’s, together accounted for 52% of our fiscal 2025 net sales and 25% of our outstanding accounts receivable as of September 30, 2025.
Our credit facility and the indentures governing our 5.250% Senior Notes due 2026 (the “5.250% Senior Notes”), our 4.500% Senior Notes due 2029 (the “4.500% Senior Notes”), our 4.000% Senior Notes due 2031 (the “4.000% Senior Notes”) and our 4.375% Senior Notes due 2032 (the “4.375% Senior Notes” and, collectively with the 5.250% Senior Notes, the 4.500% Senior Notes and the 4.000% Senior Notes, the “Senior Notes”) contain restrictive covenants and cross-default provisions.
The Sixth A&R Credit Agreement, Seventh A&R Credit Agreement and the indentures governing our 5.250% Senior Notes, our 4.500% Senior Notes due 2029 (the “4.500% Senior Notes”), our 4.000% Senior Notes due 2031 (the “4.000% Senior Notes”) and our 4.375% Senior Notes due 2032 (the “4.375% Senior Notes” and, collectively with the 5.250% Senior Notes, the 4.500% Senior Notes and the 4.000% Senior Notes, the “Senior Notes”) contain restrictive covenants and cross-default provisions.
Extended producer responsibility programs typically include targets and reporting responsibilities for, among other things, post-consumer recycling usage, compostable packaging, material reduction and refill strategies.
Extended producer responsibility programs typically include targets and reporting responsibilities for, among other things, post-consumer recycling usage, compostable packaging, material reduction and refill strategies. Similar extended producer responsibility programs are active in several Canadian provinces.
Our failure to successfully respond to these risks and uncertainties might adversely affect the sales of our e-commerce business, as well as damage our reputation and brands. 13 Table of Contents Additionally, the success of our e-commerce business and the satisfaction of our consumers depend on the timely receipt of our products by our consumers.
Our failure to effectively address these risks and uncertainties may adversely affect the sales of our e-commerce business, as well as damage our reputation and brands. Additionally, the success of our e-commerce business and the satisfaction of our consumers depend on the timely receipt of our products by our consumers.
Any incident that erodes consumer affinity for our brands or our business operations could significantly reduce our value and damage our business. For example, negative third-party research or media reports on our product safety or efficacy, whether accurate or not, may adversely affect consumer perceptions, which could cause the value of our brands to suffer and adversely affect our business.
For example, negative third-party research or media reports on our product quality, efficacy and safety, whether accurate or not, may adversely affect consumer perceptions, which could cause the value of our brands to suffer and adversely affect our business.
We may also be adversely affected by news or other negative publicity, regardless of accuracy, regarding other aspects of our business, such as: • public health concerns, illness or safety; • the perception of our environmental stewardship and the effects our business has on the environment; • security breaches of confidential company, customer or employee information; or • employee related claims relating to alleged employment discrimination, health care and benefit issues.
We may also be adversely affected by news or other negative publicity, regardless of accuracy, regarding other aspects of our business, including: • public health concerns, illness or safety; • the perception of our environmental stewardship and the impacts our business has on the environment (including packaging, energy and water use and matters related to climate impact and waste management) and other sustainability issues; • security breaches of confidential company, customer or employee information; or • employee related claims relating to alleged employment discrimination, health care and benefit issues.
This reliance generates a number of risks, including decreased control over the production and related processes, which could lead to production delays or interruptions and inferior product quality control.
We rely on third parties to manufacture certain products. This reliance generates a number of risks, including decreased control over the production and related processes, which could lead to production delays or interruptions and inferior product quality control.
The Senior Notes contain an interest coverage ratio covenant which sets the minimum permitted interest coverage ratio at 2.00. Our interest coverage ratio was 3.57 for the twelve months ended September 30, 2024.
The Senior Notes contain an independently calculated interest coverage ratio covenant which sets the minimum permitted interest coverage ratio at 2.00. Our interest coverage ratio was 4.78 for the twelve months ended September 30, 2025.
The costs of compliance, remediation or products liability have adversely affected operating results in the past and could materially adversely affect future quarterly or annual operating results. 20 Table of Contents Our products and operations may be subject to increased regulatory and environmental scrutiny in jurisdictions in which we do business.
The costs of compliance, remediation or products liability have adversely affected operating results in the past and could adversely affect our financial condition, results of operations and cash flows. Our products and operations may be subject to increased regulatory and environmental scrutiny in jurisdictions in which we do business.
We are also vulnerable to certain additional risks and uncertainties associated with our e-commerce business, including: changes in required technology interfaces; website downtime and other technical failures; costs and technical issues associated with website software, systems and technology investments and upgrades; data and system security; system failures, disruptions and breaches and the costs to address and remedy such failures, disruptions or breaches; computer viruses; and changes in and compliance with applicable federal and state regulations.
Our e-commerce business is subject to various risks and uncertainties, including: changes in required technology interfaces; website downtime and other technical failures; costs and technical issues associated with website software, systems and technology investments and upgrades; data and system security; system failures, disruptions and breaches and the costs to address and remedy such failures, cyber attacks; and changes in and compliance with applicable federal and state regulations.
Increases in the prices of key commodities and other raw materials could adversely affect our ability to manage our cost structure. Market conditions may limit our ability to raise selling prices to offset increases in our raw material costs.
A significant disruption in the availability or price of any of our key raw materials could negatively impact our business. Increases in the prices of key commodities and other raw materials could adversely affect our ability to manage our cost structure. Market conditions may limit our ability to raise selling prices to offset increases in our raw material costs.
Because our consumers may associate the public figures that market and endorse our products with us, any negative publicity on behalf of such individuals may cause negative publicity about us and our products. This negative publicity could materially and adversely affect our brands and reputation and our revenue and profits.
Because our consumers may associate the public figures that market and endorse our products with us, any negative publicity on behalf of such individuals may cause negative publicity about us and our products.
Compliance with any new or more stringent laws or regulations, or stricter interpretations of existing laws, could require additional expenditures by us or our suppliers, in which case, the costs of raw materials and component parts could increase. We may incur some of these costs directly and others may be passed on to us from our third-party suppliers.
Compliance with any new or more stringent laws or regulations, or stricter interpretations of existing laws, could require additional expenditures by us or our suppliers, in which case, the costs of raw materials and component parts could increase.
Certain of our products may be purchased for use in new and emerging industries or segments and/or be subject to varying, inconsistent, and rapidly changing laws, regulations, administrative practices, enforcement approaches, judicial interpretations, and consumer perceptions.
This negative publicity could materially and adversely affect our brands and reputation and our revenue and profits. 13 Table of Contents Certain of our products may be purchased for use in new and emerging industries or segments and/or be subject to varying, inconsistent and rapidly changing laws, regulations, administrative practices, enforcement approaches, judicial interpretations and consumer perceptions.
The general availability and price of those raw materials can be affected by numerous forces beyond our control, including political instability, trade restrictions and other government regulations, duties and tariffs, price controls, changes in currency exchange rates and weather. A significant disruption in the availability or price of any of our key raw materials could negatively impact our business.
We source many of our commodities and other raw materials on a global basis. The general availability and price of those raw materials can be affected by numerous forces beyond our control, including political instability, trade restrictions and other government regulations, duties and tariffs, price controls, changes in currency exchange rates and weather.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Audit Committee reports to our Board of Directors at least annually on cybersecurity matters. At the management level, our Chief Information Security Officer (“CISO”) leads the team responsible for implementing, monitoring, and maintaining information security, including data protection practices across our business.
Biggest changeOur Chief Information Security Officer (“CISO”) and information security management team report to our Audit Committee on a quarterly basis on cybersecurity matters. At the management level, our CISO leads the team responsible for implementing, monitoring and maintaining information security, including data protection practices across our business.
We determine applicable security controls based on the inherent risk level to drive the residual risk score to an acceptable level where possible. The goal of the assessment process is to evaluate the risks associated with each third party, including operational, financial, legal, and reputational risks.
We determine applicable security controls based on the inherent risk level to drive the residual risk score to an acceptable level where possible. The goal of the risk assessment process is to evaluate the risks associated with each third party, including operational, financial, legal and reputational risks.
Our Audit Committee reviews the measures implemented by the Company to identify and mitigate data protection and cybersecurity risks on a quarterly basis.
On a quarterly basis, our Audit Committee reviews the measures implemented by the Company to identify and mitigate data protection and cybersecurity risks.
As part of our continued investment in developing our overall enterprise risk management program, our Audit Committee receives reports and presentations from management which address a range of topics including recent developments, evolving standards, vulnerability assessments, third-party and independent reviews, the threat environment, and technological trends.
As part of our continued investment in developing our overall enterprise risk management program, our Audit Committee receives reports and presentations from management which address a range of cybersecurity topics including recent developments, evolving standards, vulnerability assessments, third-party and independent reviews, the threat environment and technological trends.
RISK FACTORS — Risks Related to Our Business — Our operations, financial condition or reputation may be impaired if our information or operational technology systems fail to perform adequately or if we are the subject of a data breach or cyber-attack” in this Form 10-K. 24 Table of Contents
RISK FACTORS — Risks Related to Our Business — Our operations, financial condition or reputation may be impaired if our information or operational technology systems fail to perform adequately or if we are the subject of a data breach or cyber attack” in this Form 10-K. 25 Table of Contents
Our CISO works closely with our Company’s legal team to ensure compliance with legal and regulatory cybersecurity requirements. Our CISO has over a decade of cybersecurity and risk management experience and holds CISA, CISM, and CISSP certifications as well as a bachelor’s degree in Business Information Systems.
Our CISO works closely with our legal team to ensure compliance with legal and regulatory requirements related to cybersecurity. Our CISO has over a decade of cybersecurity and risk management experience and holds CISA, CISM and CISSP certifications as well as a bachelor’s degree in Business Information Systems.
During fiscal 2024, fiscal 2023 and fiscal 2022, the Company did not experience any cybersecurity threats or incidents that have materially affected or are reasonably likely to materially affect the Company or its business strategy, results of operations and/or financial condition.
During fiscal 2025, fiscal 2024 and fiscal 2023, the Company did not experience any cybersecurity threats or incidents that have materially affected or are reasonably likely to materially affect the Company or its business strategy, results of operations and/or financial condition.
Ongoing Monitoring Based on the residual risk score of a third party, we conduct assessments on a periodic basis to help ensure that we maintain current, up-to-date information on our vendors.
Ongoing Monitoring Based on the residual risk score of a third party, we conduct assessments on a periodic basis to help ensure that we maintain current information on our vendors.
ITEM 1C. CYBERSECURITY Risk Management and Strategy Cybersecurity risk was identified as a significant enterprise risk based on the results of our most recent enterprise risk assessment. As a significant enterprise risk, management has worked to identify the underlying drivers of cybersecurity risk, identify the activities in place to manage it, and assess its residual risk level.
ITEM 1C. CYBERSECURITY Risk Management and Strategy Cybersecurity risk was identified as a significant enterprise risk based on the results of our most recent enterprise risk assessment. As a significant enterprise risk, we have worked to identify the underlying drivers of cybersecurity risk, identify the activities in place to manage it and assess its residual risk level.
We regularly review and report on third-party risk management activities and any significant issues to senior management and/or our Audit Committee or Board of Directors. External Resources; Associate Training and Awareness We have developed a comprehensive information security protocol that relies on support from third-party experts and an internal training and awareness program aligned with industry standards and best practices.
We regularly review and report on third-party risk management activities and any significant issues to senior management and/or our Audit Committee. External Resources; Associate Training and Awareness We have developed a comprehensive information security program that relies on support from third-party experts and an internal training and awareness program aligned with industry standards and best practices.
For example, we work with third parties to regularly conduct simulated attack exercises to identify additional needs for training and overall program refinement. Internally, our training and awareness program creates multi-layered defenses by empowering associates with knowledge and tools to recognize and respond to security risks.
For example, we work with third parties to regularly conduct simulated attack exercises to identify additional needs for training and overall program refinement. 24 Table of Contents Internally, our training and awareness program creates multi-layered defenses by empowering associates with knowledge and tools to recognize and respond to security risks.
Incident Management We have developed an incident response plan that includes a process for addressing issues arising from third-party relationships which includes communication channels for reporting and managing incidents involving third parties. Documentation and Reporting We maintain detailed records of our third-party assessments and any evidence or documentation that is provided during the assessment process.
Incident Management We have developed an incident response plan that establishes a process for addressing issues arising from third-party relationships and communication channels for reporting and managing incidents involving third parties. Documentation and Reporting We maintain detailed records of our third-party assessments and any information or documentation that is provided during the assessment process.
Through role-specific and comprehensive training, we seek to maintain a workforce that actively contributes to our cybersecurity goals. Key components of our training program include: 23 Table of Contents • Onboarding Training — All new associates participate in an initial cybersecurity training module at onboarding.
Through role-specific and comprehensive training, we seek to maintain a workforce that actively contributes to the achievement of our cybersecurity goals. Key components of our training program include: • Onboarding Training — All new associates participate in an initial cybersecurity training module at onboarding.
Our CISO receives reports on cybersecurity threats from both our internal personnel and external partners on a regular basis. Our Chief Operating Officer and Chief Administrative Officer receive regular reports from our CISO on the cyber program and measures implemented by the Company to identify and mitigate cybersecurity risks.
Our CISO receives reports on cybersecurity threats from both our internal personnel and external partners on a regular basis. Our Chief Operating Officer and Chief Financial Officer receive regular reports from our CISO on the information security program and measures implemented by the Company to identify and mitigate cybersecurity risks.
Cybersecurity Threats and Incidents To date, risks from cybersecurity threats, including as a result of previous cybersecurity incidents, have not materially affected us, including our business strategy, results of operations, or financial condition.
Cybersecurity Threats and Incidents To date, cybersecurity incidents have not materially affected us, including our business strategy, results of operations or financial condition.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeDisposition and sublease efforts are underway or in place. 25 Table of Contents
Biggest changeDisposition and sublease efforts are underway or in place. 5 Includes one research and development property that is not operational. Disposition efforts are underway. 26 Table of Contents
ITEM 2. PROPERTIES Our corporate headquarters is located in Marysville, Ohio, where we own approximately 729 acres of land. In addition, we own and lease numerous industrial, commercial and office properties located in North America, Europe and Asia that support the management, manufacturing, distribution and research and development of our products and services.
ITEM 2. PROPERTIES Our corporate headquarters is located in Marysville, Ohio, where we own approximately 729 acres of land. In addition, we own and lease numerous industrial, commercial and office properties located in North America and Asia that support the management, manufacturing, distribution and research and development of our products and services.
Most of the manufacturing properties, which include growing media properties and peat harvesting properties, have production lines, warehouses, offices and field processing areas. 2 Includes one manufacturing location that is not operational. 3 Includes one manufacturing location under development with operations scheduled to begin in fiscal 2025. 4 Includes ten distribution centers that are not operational.
Most of the manufacturing properties, which include growing media properties and peat harvesting properties, have production lines, warehouses, offices and field processing areas. 2 Includes one manufacturing location that is not operational. 3 Includes one manufacturing and one distribution location under development with operations scheduled to begin in fiscal 2026. 4 Includes five distribution centers that are not operational.
We own or lease 15 manufacturing properties, 1 distribution property and 1 research and development property in Canada, 2 manufacturing properties in the Netherlands and 1 research and development property in China.
We own or lease 16 manufacturing properties, 1 distribution property and 1 research and development property in Canada and 1 research and development property in China.
The following is a summary of owned and leased primary operating properties by country as of September 30, 2024: Location Owned Leased United States 35 2 55 3,4 Canada 10 13 Mexico — 1 China — 6 The Netherlands — 3 Total 45 78 We own or lease 45 manufacturing properties, 16 distribution properties and 4 research and development properties in the United States.
The following is a summary of owned and leased primary operating properties by country as of September 30, 2025: Location Owned Leased United States 35 2 48 3,4 Canada 11 5 11 Mexico — 1 China — 5 Total 46 65 We own or lease 45 manufacturing properties, 12 distribution properties and 4 research and development properties in the United States.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThese lawsuits, which will likely be consolidated with any subsequently filed lawsuits alleging similar facts, assert claims under Section 10(b), Rule 10b-5 and Section 20(a) of the Securities Exchange Act against the Company and certain of its current and former officers based on alleged misstatements about the Company’s inventories, sales and business prospects.
Biggest changeThe amended consolidated complaint was filed on May 9, 2025 on behalf of a proposed class of purchasers of Common Shares between May 5, 2021, and August 1, 2023, and asserts claims under Section 10(b), Rule 10b-5 and Section 20(a) of the Exchange Act against the Company and certain of its current and former officers based on alleged misstatements about the Company’s inventories, sales and business prospects.
The actions seek a judgment in favor of the Company for damages in an unspecified amount, disgorgement, interest, and costs and expenses, including attorneys’ and experts’ fees.
The actions seek a judgment in favor of the Company for unspecified damages, disgorgement, interest and costs and expenses, including attorneys’ and experts’ fees.
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. 26 Table of Contents
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.
The actions seek, among other things, unspecified monetary damages, reasonable costs and expenses and equitable/injunctive or other relief as deemed appropriate by the Court. The Company believes that the claims asserted are without merit and intends to vigorously defend the actions.
The action seeks, among other things, unspecified monetary damages, reasonable costs and expenses and equitable/injunctive or other relief as deemed appropriate by the Court. The Company believes that the claims asserted are without merit and intends to vigorously defend the action.
We are involved in other lawsuits and claims which arise in the normal course of our business including the initiation and defense of proceedings to protect intellectual property rights, advertising claims, securities matters and employment disputes.
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 and the enforcement and defense of intellectual property rights.
All of the lawsuits include allegations that generally mirror those asserted in the securities lawsuits described above and assert claims for breaches of fiduciary duties and unjust enrichment, as well as abuse of control, gross mismanagement, and waste of corporate assets.
The lawsuits include allegations that generally mirror those asserted in the securities lawsuits described above and assert claims for breach of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement and waste of corporate assets. The federal lawsuits also assert claims under the Exchange Act.
On July 3, 2024, a purported shareholder filed a shareholder derivative lawsuit in the United States District Court for the Southern District of Ohio (Case No. 2:24-cv-03636), purportedly on behalf of the Company against certain of the Company’s current and former officers and directors.
Beginning in July 2024, purported shareholders filed a series of shareholder derivative lawsuits in state and federal courts in Ohio against certain of the Company’s current and former directors and officers.
Removed
On July 30, 2024, a second purported shareholder filed a shareholder derivative lawsuit in the United States District Court for the Southern District of Ohio (Case No.1:24-cv-00402), purportedly on behalf of the Company against certain of the Company’s current and former officers and directors.
Added
The lawsuits were consolidated by the court as In re The Scotts Miracle-Gro Company Securities Litigation (Case No. 2:24-cv-03132).
Removed
On August 23, 2024, a third purported shareholder filed a shareholder derivative lawsuit in the United States District Court for the Southern District of Ohio (Case No. 2:24-cv-03880), purportedly on behalf of the Company against certain of the Company’s current and former officers and directors.
Removed
On September 9, 2024, a fourth purported shareholder filed a shareholder derivative lawsuit in the Union County (Ohio) Court of Common Pleas (Case No. 24CV0193), purportedly on behalf of the Company against certain of the Company’s current and former officers and directors.
Removed
On September 26, 2024, a fifth purported shareholder filed a shareholder derivative lawsuit in the Union County (Ohio) Court of Common Pleas (Case No. 24CV0203), purportedly on behalf of the Company against certain of the Company’s current and former officers and directors.
Removed
On November 19, 2024, a sixth purported shareholder filed a shareholder derivative lawsuit in the United States District Court for the Southern District of Ohio (Case No. 2:24-cv-04180), purportedly on behalf of the Company against certain of the Company’s current and former officers and directors.
Removed
On November 22, 2024, a seventh purported shareholder filed a shareholder derivative lawsuit in the United States District Court for the Southern District of Ohio (Case No. 2:24-cv-04190), purportedly on behalf of the Company against certain of the Company’s current and former officers and directors.
Removed
The federal lawsuits will likely be consolidated with one another, along with any subsequently filed federal lawsuits alleging similar facts, and the state court lawsuits will likely be consolidated with one another, along with any subsequently filed state lawsuits alleging similar facts.
Removed
The federal lawsuits also assert claims under Section 10(b), Rule 10b-5, Section 14(a), Rule 14a-9, and Section 20(a) of the Securities Exchange Act, and contribution under Sections 10(b) and 21D of the Securities Exchange Act.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeHagedorn served as Senior Vice President & General Manager, Hawthorne, a position he held since January 2017. Mr. C. Hagedorn is the son of Mr. Hagedorn, the Chief Executive Officer, President & Chairman of the Board of Scotts Miracle-Gro. Mr. Todorov was named Executive Vice President, Chief Legal Officer & Corporate Secretary in November 2024. Prior to this appointment, Mr.
Biggest changeHagedorn, the Chairman & Chief Executive Officer of Scotts Miracle-Gro. Mr. Todorov was named Executive Vice President, Chief Legal Officer & Corporate Secretary of Scotts Miracle-Gro in November 2024. Prior to this appointment, Mr. Todorov served as Executive Vice President, General Counsel, Corporate Secretary & Chief Ethics and Compliance Officer from October 2024 until November 2024. Previously, Mr.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II SUPPLEMENTAL ITEM. EXECUTIVE OFFICERS OF THE REGISTRANT The executive officers of Scotts Miracle-Gro, their positions and, as of November 20, 2024, their ages and years with Scotts Miracle-Gro (and its predecessors) are set forth below.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 27 Table of Contents PART II SUPPLEMENTAL ITEM. EXECUTIVE OFFICERS OF THE REGISTRANT The executive officers of Scotts Miracle-Gro, their positions and, as of November 19, 2025, their ages and years with Scotts Miracle-Gro (and its predecessors) are set forth below.
Hagedorn 40 Executive Vice President & Chief of Staff 13 Dimiter Todorov 52 Executive Vice President, Chief Legal Officer & Corporate Secretary 16 Executive officers serve at the discretion of the Board of Directors of Scotts Miracle-Gro and pursuant to executive severance agreements or other arrangements.
Hagedorn 41 Executive Vice President & Chief of Staff 14 Dimiter Todorov 53 Executive Vice President, Chief Legal Officer & Corporate Secretary 17 Executive officers serve at the discretion of the Board of Directors of Scotts Miracle-Gro and pursuant to executive severance agreements or other arrangements.
Holdings, a semiconductor manufacturing equipment company. Mr. Baxter is a general partner of the Hagedorn Partnership, L.P., the largest shareholder of the Company. Mr. Garth was named Executive Vice President, Chief Financial Officer & Chief Administrative Officer of Scotts Miracle-Gro in October 2023. Prior to this appointment, Mr.
Hagedorn, an executive officer of the Company. Mr. Hagedorn is a general partner of the Hagedorn Partnership, L.P., the largest shareholder of the Company. Mr. Baxter was named President & Chief Operating Officer of Scotts Miracle-Gro in November 2024. Prior to this appointment, Mr.
OTHER INFORMATION” of this Form 10-K. Mr. C. Hagedorn was named Executive Vice President & Chief of Staff of Scotts Miracle-Gro in November 2024. Prior to this appointment, Mr. C. Hagedorn served as Division President of Scotts Miracle-Gro from January 2021 through November 2024. Previously, Mr. C.
Hagedorn was named Executive Vice President & Chief of Staff of Scotts Miracle-Gro in November 2024. Prior to this appointment, Mr. C. Hagedorn served as Division President from January 2021 until November 2024. Previously, Mr. C. Hagedorn served as Senior Vice President & General Manager, Hawthorne from January 2017 until January 2021. Mr. C. Hagedorn is the son of Mr.
Name Age Position(s) Held Years with Company James Hagedorn 69 Chairman & Chief Executive Officer 37 Nathan E. Baxter 52 President & Chief Operating Officer 1 Matthew E. Garth 50 Executive Vice President, Chief Financial Officer & Chief Administrative Officer 2 Christopher J.
Name Age Position(s) Held Years with Company James Hagedorn 70 Chairman & Chief Executive Officer 38 Nathan E. Baxter 53 President & Chief Operating Officer 2 Mark J. Scheiwer 50 Executive Vice President, Chief Financial Officer & Chief Accounting Officer 14 Christopher J.
Hagedorn, an executive officer of the Company. Mr. Baxter was named Executive Vice President & Chief Operating Officer of Scotts Miracle-Gro in August 2023 and President in November 2024. Prior to August 2023, Mr. Baxter served as Executive Vice President, Technology & Operations, a position he held since April 2023. Previously, Mr. Baxter served as President of Tokyo Electron U.S.
Baxter served as Executive Vice President & Chief Operating Officer from August 2023 until November 2024 and Executive Vice President, Technology & Operations from April 2023 until August 2023. Previously, Mr. Baxter served as President of Tokyo Electron U.S. Holdings, a semiconductor manufacturing equipment company. Mr.
Todorov served as Executive Vice President, General Counsel, Corporate Secretary & Chief Ethics and Compliance Officer of Scotts Miracle-Gro, a position he held since October 2024, and Executive Vice President, General Counsel, Corporate Secretary & Chief Compliance Officer, a position he held since December 2022. Previously, Mr.
Todorov served as Executive Vice President, General Counsel, Corporate Secretary & Chief Compliance Officer from December 2022 until October 2024 and Vice President, Legal from June 2015 until December 2022. 28 Table of Contents
Removed
Garth served as Executive Vice President & Chief Financial Officer, a position he held since December 2022. Previously, Mr. Garth served as Senior Vice President, Finance and Treasury, and Chief Financial Officer for Mineral Technologies Inc., a specialty mineral company. Mr. Garth will be departing the Company effective December 31, 2024. For additional information regarding this departure, see “ITEM 9B.
Added
Baxter is a general partner of the Hagedorn Partnership, L.P., the largest shareholder of the Company. Mr. Scheiwer was named Executive Vice President, Chief Financial Officer & Chief Accounting Officer of Scotts Miracle-Gro in May 2025. Prior to this appointment, Mr. Scheiwer served as Interim Chief Financial Officer & Chief Accounting Officer from January 2025 until May 2025. Previously, Mr.
Removed
Todorov served as Vice President, Legal, a position he held since June 2015. 27 Table of Contents
Added
Scheiwer served as Vice President, Corporate Treasurer & Assistant Secretary from October 2023 until January 2025; Vice President and Corporate Treasurer from December 2022 until October 2023; Vice President, Finance Lead, Hawthorne from January 2021 until December 2022; and Vice President, Corporate Controller, from December 2018 until January 2021. Mr. C.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table shows the purchases of Common Shares made by or on behalf of Scotts Miracle-Gro or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended) of Scotts Miracle-Gro for each of the three fiscal months in the quarter ended September 30, 2024: Period Total Number of Common Shares Purchased (1) Average Price Paid per Common Share (2) Total Number of Common Shares Purchased as Part of Publicly Announced Plans or Programs (3) Approximate Dollar Value of Common Shares That May Yet Be Purchased Under the Plans or Programs (3) June 30, 2024 through July 27, 2024 1,295 $ 70.29 — N/A July 28, 2024 through August 24, 2024 — $ — — N/A August 25, 2024 through September 30, 2024 2,350 $ 77.46 — N/A Total 3,645 $ 74.91 — (1) All of the Common Shares purchased during the fourth quarter of fiscal 2024 were purchased in open market transactions.
Biggest changeThe following table shows the purchases of Common Shares made by or on behalf of Scotts Miracle-Gro or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Exchange Act) of Scotts Miracle-Gro for each of the three fiscal months in the quarter ended September 30, 2025: Period Total Number of Common Shares Purchased (1) Average Price Paid per Common Share (2) Total Number of Common Shares Purchased as Part of Publicly Announced Plans or Programs (3) Approximate Dollar Value of Common Shares That May Yet Be Purchased Under the Plans or Programs (3) June 29, 2025 through July 26, 2025 — $ — — N/A July 27, 2025 through August 23, 2025 1,319 $ 69.42 — N/A August 24, 2025 through September 30, 2025 3,076 $ 59.35 — N/A Total 4,395 $ 62.37 — (1) All of the Common Shares purchased during the fourth quarter of fiscal 2025 were purchased in open market transactions.
The issuances of the Common Shares were exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2). Scotts Miracle-Gro issued the Common Shares in privately negotiated transactions, and such restricted shares were acquired for the recipient’s account for investment purposes.
These issuances of Common Shares were exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2). Scotts Miracle-Gro issued the Common Shares in privately negotiated transactions, and such restricted shares were acquired for the recipient’s account for investment purposes.
On September 4, 2024, September 13, 2023 and December 14, 2022, Scotts Miracle-Gro issued 286,204, 373,831 and 388,878 Common Shares, respectively, having a contractual value of $20.0 million each, to a vendor who is an accredited investor as consideration for advertising services.
On September 4, 2024, September 13, 2023 and December 14, 2022, Scotts Miracle-Gro issued 286,204, 373,831 and 388,878 Common Shares, respectively, with each issuance having a contractual value of $20.0 million, to a vendor who is an accredited investor as consideration for advertising services.
The Common Shares purchased during the quarter consisted of 3,645 Common Shares purchased by the trustee of the rabbi trust established by the Company as permitted pursuant to the terms of The Scotts Company LLC Executive Retirement Plan. (2) The average price paid per Common Share is calculated on a settlement basis and includes commissions.
The Common Shares purchased during the quarter consisted of 4,395 Common Shares purchased by the trustee of the rabbi trust established by the Company as permitted pursuant to the terms of The Scotts Company LLC Executive Retirement Plan. (2) The average price paid per Common Share is calculated on a settlement basis and includes commissions.
The program expired on March 25, 2023 and, as of September 30, 2024, the Company does not have an active repurchase program. 28 Table of Contents Comparison of Cumulative Five-Year Total Return* The following graph compares the yearly change in the cumulative total stockholder return on our Common Shares for the past five fiscal years with the cumulative total return of the Russell 2000 Index and the S&P 500 Household Products Index.
(3) The Company does not have an active repurchase program. 29 Table of Contents Comparison of Cumulative Five-Year Total Return* The following graph compares the yearly change in the cumulative total stockholder return on our Common Shares for the past five fiscal years with the cumulative total return of the Russell 2000 Index and the S&P 500 Household Products Index.
As of November 18, 2024, there were approximately 226,000 shareholders, including holders of record and our estimate of beneficial holders.
As of November 21, 2025, there were approximately 141,000 shareholders, including holders of record and our estimate of beneficial holders.
Removed
Amendment No. 2 to the Sixth A&R Credit Agreement (“Amendment No. 2”) limits the Company’s ability to declare or pay any discretionary dividends, distributions or other restricted payments to only the payment of (i) regularly scheduled cash dividends to holders of its Common Shares in an aggregate amount not to exceed $225.0 million per fiscal year and (ii) other dividends, distributions or restricted payments in an aggregate amount not to exceed $25.0 million.
Added
The Seventh A&R Credit Agreement allows the Company to make unlimited restricted payments (as defined in the Seventh A&R Credit Agreement), including dividend payments on, and repurchases of, Common Shares, as long as the leverage ratio resulting from the making of such restricted payments is 4.00 or less.
Removed
(3) On February 6, 2020, the Company announced a repurchase program allowing for repurchases of up to $750.0 million of Common Shares from April 30, 2020 through March 25, 2023.
Added
Otherwise, the Company is limited to restricted payments in an aggregate amount for each fiscal year not to exceed $225.0 million.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeWhile we had net debt repayments of $353.6 during fiscal 2023, our seasonal borrowing and repayment pattern resulted in an average debt balance for fiscal 2023 that was consistent with fiscal 2022. 37 Table of Contents THE SCOTTS MIRACLE-GRO COMPANY (Dollars in millions, except per share data) Income Tax Expense (Benefit) A reconciliation of the federal corporate income tax rate and the effective tax rate on loss before income taxes is summarized below: Year Ended September 30, 2024 2023 2022 Statutory income tax rate 21.0 % 21.0 % 21.0 % Effect of foreign operations (2.0) 0.2 (1.6) State taxes, net of federal benefit 8.0 3.2 2.6 Effect of other permanent differences (32.8) (0.8) 2.8 Research and Experimentation and other federal tax credits 2.9 0.2 0.2 Effect of tax contingencies 3.7 0.1 (1.8) Change in valuation allowances (57.4) (8.7) (0.9) Other 8.7 1.0 (0.7) Effective income tax rate (47.9) % 16.2 % 21.6 % For fiscal 2024, the impact on the effective tax rate of the items noted in the table above increased due to the decrease in loss before income taxes for fiscal 2024 as compared to fiscal 2023 and fiscal 2022.
Biggest changeIncome Tax Expense (Benefit) A reconciliation of the federal corporate income tax rate and the effective tax rate on income (loss) before income taxes is summarized below: Year Ended September 30, 2025 2024 2023 Statutory income tax rate 21.0 % 21.0 % 21.0 % Effect of foreign operations 0.3 (2.0) 0.2 State taxes, net of federal benefit 5.5 8.0 3.2 Effect of other permanent differences 2.2 (32.8) (0.8) Research and Experimentation and other federal tax credits (0.3) 2.9 0.2 Effect of tax contingencies (0.5) 3.7 0.1 Change in valuation allowances 5.4 (57.4) (8.7) Other 0.9 8.7 1.0 Effective income tax rate 34.5 % (47.9) % 16.2 % 38 Table of Contents THE SCOTTS MIRACLE-GRO COMPANY (Dollars in millions, except per share data) During fiscal 2025, we incurred a non tax-deductible loss on the sale of our Hawthorne professional horticulture business of $17.7 and this impact is included in the “Effect of other permanent differences” line in the table above.
Corporate Corporate expenses were $117.7 in fiscal 2024, an increase of 15.8% from fiscal 2023 expenses of $101.6.
Corporate expenses were $117.7 in fiscal 2024, an increase of 15.8% from fiscal 2023 expenses of $101.6.
Investing Activities Cash used in investing activities totaled $100.4 for fiscal 2024, an increase of $34.7 compared to $65.7 for fiscal 2023. Cash used for investments in property, plant and equipment during fiscal 2024 and fiscal 2023 was $84.0 and $92.8, respectively.
Cash used in investing activities totaled $100.4 for fiscal 2024, an increase of $34.7 compared to $65.7 for fiscal 2023. Cash used for investments in property, plant and equipment during fiscal 2024 and fiscal 2023 was $84.0 and $92.8, respectively.
The 4.500% Senior Notes have interest payment dates of April 15 and October 15 of each year. On March 17, 2021, Scotts Miracle-Gro issued $500.0 aggregate principal amount of 4.000% Senior Notes due 2031. The 4.000% Senior Notes represent general unsecured senior obligations and rank equal in right of payment with our existing and future unsecured senior debt.
The 4.500% Senior Notes represent general unsecured senior obligations and rank equal in right of payment with our existing and future unsecured senior debt. The 4.500% Senior Notes have interest payment dates of April 15 and October 15 of each year. On March 17, 2021, Scotts Miracle-Gro issued $500.0 aggregate principal amount of 4.000% Senior Notes due 2031.
The 4.000% Senior Notes have interest payment dates of April 1 and October 1 of each year. On August 13, 2021, Scotts Miracle-Gro issued $400.0 aggregate principal amount of 4.375% Senior Notes due 2032. The 4.375% Senior Notes represent general unsecured senior obligations and rank equal in right of payment with our existing and future unsecured senior debt.
The 4.000% Senior Notes represent general unsecured senior obligations and rank equal in right of payment with our existing and future unsecured senior debt. The 4.000% Senior Notes have interest payment dates of April 1 and October 1 of each year. On August 13, 2021, Scotts Miracle-Gro issued $400.0 aggregate principal amount of 4.375% Senior Notes due 2032.
Consumer segment driven by mulch, soils and controls products, partially offset by lower volume in our Hawthorne segment driven by the discontinuation of sales of other companies’ products; and • increased net sales associated with the Roundup ® marketing agreement; • offset by decreased pricing in our U.S. Consumer, Hawthorne and Other segments.
Consumer segment driven by mulch, soils and controls products, partially offset by lower volume in our Hawthorne segment driven by the discontinuation of sales of other companies’ products; and • increased net sales associated with the Roundup ® marketing agreement; • offset by decreased pricing in our U.S.
The Notes to Consolidated Financial Statements included in this Form 10-K contain additional information related to our accounting policies, including recent accounting pronouncements, and should be read in conjunction with this discussion. 48 Table of Contents THE SCOTTS MIRACLE-GRO COMPANY (Dollars in millions, except per share data)
The Notes to Consolidated Financial Statements included in this Form 10-K contain additional information related to our accounting policies, including recent accounting pronouncements, and should be read in conjunction with this discussion. 49 Table of Contents THE SCOTTS MIRACLE-GRO COMPANY (Dollars in millions, except per share data)
Amounts in the table represent scheduled future maturities of debt principal for the periods indicated. The interest payments for our credit facilities are based on outstanding borrowings as of September 30, 2024. Actual interest expense will likely be higher due to the seasonality of our business and associated higher average borrowings.
Amounts in the table represent scheduled future maturities of debt principal for the periods indicated. The interest payments for our credit facilities are based on outstanding borrowings as of September 30, 2025. Actual interest expense will likely be higher due to the seasonality of our business and associated higher average borrowings.
Consumer and Hawthorne segments; • lower material costs in our U.S. Consumer segment; • lower sales volume in our Hawthorne segment; and • a decrease in impairment, restructuring and other charges; • partially offset by higher sales volume in our U.S. Consumer segment; • inventory write-down charges included within “volume, mix and other” associated with our U.S.
Consumer and Hawthorne segments; • lower manufacturing costs included within “volume, mix and other” in our U.S. Consumer, Hawthorne and Other segments; • lower inventory write-down charges included within “volume, mix and other” associated with our U.S. Consumer segment; and • a decrease in impairment, restructuring and other charges; • partially offset by higher sales volume in our U.S.
The notional amount, effective date, expiration date and rate of each of the swap agreements outstanding at September 30, 2024 are shown in the table below: Notional Amount ($) Effective Date (a) Expiration Date Fixed Rate 150 6/7/2023 4/7/2027 3.37 % 50 6/7/2023 4/7/2027 3.34 % 100 (b) 11/20/2023 3/22/2027 4.74 % 150 (b) 9/20/2024 9/20/2029 4.25 % (a) The effective date refers to the date on which interest payments are first hedged by the applicable swap agreement.
The notional amount, effective date, expiration date and rate of each of the swap agreements outstanding at September 30, 2025 are shown in the table below: Notional Amount ($) Effective Date (a) Expiration Date Fixed Rate 150 6/7/2023 4/7/2027 3.37 % 50 6/7/2023 4/7/2027 3.34 % 100 (b) 11/20/2023 3/22/2027 4.74 % 150 (b) 9/20/2024 9/20/2029 4.25 % 100 4/8/2027 4/8/2030 3.40 % (a) The effective date refers to the date on which interest payments are first hedged by the applicable swap agreement.
We perform our annual goodwill and indefinite-lived intangible asset testing as of the first day of our fiscal fourth quarter or more frequently if circumstances indicate potential impairment. In our evaluation of impairment for goodwill and indefinite-lived intangible assets, we perform either an initial qualitative or quantitative evaluation for each of our reporting units and indefinite-lived intangible assets.
We perform our annual goodwill and indefinite-lived intangible asset testing as of the first day of our fiscal fourth quarter or more frequently if circumstances indicate potential impairment. In our evaluation of impairment for goodwill and indefinite-lived intangible assets, we perform either a qualitative or quantitative evaluation for each of our reporting units and indefinite-lived intangible assets.
Diluted average common shares used in the diluted loss per common share calculation for fiscal 2024, fiscal 2023 and fiscal 2022 were 56.8 million, 56.0 million and 55.5 million, respectively, which excluded potential common shares of 0.9 million, 0.4 million and 0.6 million, respectively, because the effect of their inclusion would be anti-dilutive as we incurred a net loss for fiscal 2024, 2023 and 2022.
Diluted average common shares used in the diluted net loss per common share calculation for fiscal 2024 and fiscal 2023 were 56.8 million and 56.0 million, respectively, which excluded potential common shares of 0.9 million and 0.4 million, respectively, because the effect of their inclusion would be anti-dilutive as we incurred a net loss for fiscal 2024 and 2023.
Swap agreements that were hedging interest payments as of September 30, 2024 and 2023 had a maximum total U.S. dollar equivalent notional amount of $450.0 and $600.0, respectively. During fiscal 2024, we terminated an interest rate swap agreement in exchange for a cash payment of $11.0.
Swap agreements that were hedging interest payments as of September 30, 2025 and 2024 had a maximum total U.S. dollar equivalent notional amount of $450.0. During fiscal 2024, we terminated an interest rate swap agreement in exchange for a cash payment of $11.0.
On April 8, 2022, we entered into the Sixth A&R Credit Agreement, providing the Company and certain of its subsidiaries with five-year senior secured loan facilities in the aggregate principal amount of $2,500.0, comprised of a revolving credit facility of $1,500.0 and a term loan in the original principal amount of $1,000.0 (the “Sixth A&R Credit Facilities”).
On April 8, 2022, we entered into the Sixth A&R Credit Agreement, which provided the Company and certain of its subsidiaries with five-year senior secured loan facilities in the aggregate principal amount of $2,500.0, comprised of a revolving credit facility of $1,500.0 and a term loan in the original principal amount of $1,000.0.
The Senior Notes are guaranteed by certain consolidated domestic subsidiaries of Scotts Miracle-Gro (collectively, the “Guarantors”) and, therefore, we report summarized financial information in accordance with SEC Regulation S-X, Rule 13-01, “Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.” The guarantees are “full and unconditional,” as those terms are used in Regulation S-X, Rule 3-10(b)(3), except that a Guarantor’s guarantee will be released in certain circumstances set forth in the indentures governing the Senior Notes, such as: (i) upon any sale or other disposition of all or substantially all of the assets of the Guarantor (including by way of merger or consolidation) to any person other than Scotts Miracle-Gro or any “restricted subsidiary” under the applicable indenture; (ii) if the Guarantor merges with and into Scotts Miracle-Gro, with Scotts Miracle-Gro surviving such merger; (iii) if the Guarantor is designated an “unrestricted subsidiary” in accordance with the applicable indenture or otherwise ceases to be a “restricted subsidiary” (including by way of liquidation or dissolution) in a transaction permitted by such indenture; (iv) upon legal or covenant defeasance; (v) at the election of Scotts Miracle-Gro following the Guarantor’s release as a guarantor under the Sixth A&R Credit Agreement, except a release by or as a result of the repayment of the Sixth A&R Credit Agreement; or (vi) if the Guarantor ceases to be a “restricted subsidiary” and the Guarantor is not otherwise required to provide a guarantee of the Senior Notes pursuant to the applicable indenture. 44 Table of Contents THE SCOTTS MIRACLE-GRO COMPANY (Dollars in millions, except per share data) Our foreign subsidiaries and certain of our domestic subsidiaries are not guarantors (collectively, the “Non-Guarantors”) of the Senior Notes.
The Senior Notes are guaranteed by certain consolidated domestic subsidiaries of Scotts Miracle-Gro (collectively, the “Guarantors”) and, therefore, we report summarized financial information in accordance with SEC Regulation S-X, Rule 13-01, “Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.” The guarantees are “full and unconditional,” as those terms are used in Regulation S-X, Rule 3-10(b)(3), except that a Guarantor’s guarantee will be released in certain circumstances set forth in the indentures governing the Senior Notes, such as: (i) upon any sale or other disposition of all or substantially all of the assets of the Guarantor (including by way of merger or consolidation) to any person other than Scotts Miracle-Gro or any “restricted subsidiary” under the applicable indenture; (ii) if the Guarantor merges with and into Scotts Miracle-Gro, with Scotts Miracle-Gro surviving such merger; (iii) if the Guarantor is designated an “unrestricted subsidiary” in accordance with the applicable indenture or otherwise ceases to be a “restricted subsidiary” (including by way of liquidation or dissolution) in a transaction permitted by such indenture; (iv) upon legal or covenant defeasance; (v) at the election of Scotts Miracle-Gro following the Guarantor’s release as a guarantor under the Seventh A&R Credit Agreement, except a release by or as a result of the repayment of the Seventh A&R Credit Agreement; or (vi) if the Guarantor ceases to be a “restricted subsidiary” and the Guarantor is not otherwise required to provide a guarantee of the Senior Notes pursuant to the applicable indenture.
The weighted average interest rates on average borrowings under the credit facilities, excluding the impact of interest rate swaps, were 9.1%, 7.6% and 2.8% for fiscal 2024, fiscal 2023 and fiscal 2022, respectively.
The weighted average interest rates on average borrowings under the credit facilities, excluding the impact of interest rate swaps, were 7.9%, 9.1% and 7.6% for fiscal 2025, fiscal 2024 and fiscal 2023, respectively.
Factors contributing to the change in gross margin rate are outlined in the following table: Year Ended September 30, 2024 2023 Volume, mix and other 2.4 % (4.0) % Material costs 0.7 (3.3) Roundup ® commissions and reimbursements 0.3 (0.3) Pricing (0.8) 5.0 2.6 (2.6) Impairment, restructuring and other 2.8 (1.1) Change in gross margin rate 5.4 % (3.7) % The increase in gross margin rate for fiscal 2024 as compared to fiscal 2023 was primarily driven by: • lower warehousing and transportation costs included within “volume, mix and other” in our U.S.
Factors contributing to the change in gross margin rate are outlined in the following table: Year Ended September 30, 2025 2024 Volume, mix and other 3.5 % 2.4 % Material costs 1.9 0.7 Roundup ® commissions and reimbursements 0.1 0.3 Pricing (0.6) (0.8) 4.9 2.6 Impairment, restructuring and other 1.8 2.8 Change in gross margin rate 6.7 % 5.4 % The increase in gross margin rate for fiscal 2025 as compared to fiscal 2024 was primarily driven by: • lower material costs in our U.S.
Amortization expense decreased $8.7, or 38.5%, driven by the impairment of certain Hawthorne segment intangible assets during fiscal 2023. Other SG&A decreased by $7.3, or 2.3%, driven by reductions in staffing levels and other cost-reduction initiatives. SG&A decreased $61.7, or 10.1%, during fiscal 2023 compared to fiscal 2022.
Amortization expense decreased $8.7, or 38.5%, driven by the impairment of certain Hawthorne segment intangible assets during fiscal 2023. Other SG&A decreased by $7.3, or 2.3%, driven by reductions in staffing levels and other cost-reduction initiatives.
Payments on the Senior Notes are only required to be made by Scotts Miracle-Gro and the Guarantors. As a result, no payments are required to be made from the assets of the Non-Guarantors, unless those assets are transferred by dividend or otherwise to Scotts Miracle-Gro or a Guarantor.
As a result, no payments are required to be made from the assets of the Non-Guarantors, unless those assets are transferred by dividend or otherwise to Scotts Miracle-Gro or a Guarantor.
If the oversupply of cannabis persists longer, or is more significant than we expect, our results of operations could be materially and adversely impacted for a longer period and to a greater extent than we currently anticipate.
We expect that the oversupply of cannabis will continue to adversely impact our Hawthorne segment. If the oversupply of cannabis persists longer, or is more significant than we expect, our results of operations could be materially and adversely impacted for a longer period and to a greater extent than we currently anticipate.
On September 1, 2024, we amended the Master Receivables Purchase Agreement to permit us to sell up to $750.0 of available and eligible outstanding customer accounts receivable generated by sales to five specified customers. The agreement is uncommitted and expires on September 1, 2025.
On September 1, 2024, we amended the Master Receivables Purchase Agreement to permit us to sell up to $750.0 of available and eligible outstanding customer accounts receivable generated by sales to five specified customers. On August 28, 2025, the Master Receivables Purchase Agreement, which is uncommitted, was extended and now expires on September 1, 2026.
These metrics include consumer purchases (point-of-sale data), market share, category growth, net sales (including unit volume, mix, pricing and foreign exchange movements), gross margins, advertising to net sales ratios, income (loss) from operations, net income (loss), earnings per share, earnings before interest, taxes, depreciation and amortization (“EBITDA”), leverage ratio, fixed charge coverage ratio and interest coverage ratio.
These metrics include consumer purchases (point-of-sale data), market share, category growth, e-commerce penetration, household penetration, net sales (including unit volume, mix, pricing and other drivers), gross margins, advertising to net sales ratios, income (loss) from operations, net income (loss), earnings per share, earnings before interest, taxes, depreciation and amortization (“EBITDA”), leverage ratio, fixed charge coverage ratio and interest coverage ratio.
At September 30, 2024, net receivables of $186.6 were derecognized. During fiscal 2024, proceeds from the sale of receivables under the Master Receivables Purchase Agreement totaled $1,938.6 and the total discount recorded on sales was $24.6.
At September 30, 2025 and 2024, net receivables derecognized were $163.3 and $186.6, respectively. During fiscal 2025 and fiscal 2024, proceeds from the sale of receivables under the Master Receivables Purchase Agreement totaled $1,906.1 and $1,938.6, respectively, and the total discount recorded on sales was $20.7 and $24.6, respectively.
At September 30, 2024, we had letters of credit outstanding in the aggregate principal amount of $83.0, and had $1,167.0 of borrowing availability under the Sixth A&R Credit Agreement.
At September 30, 2025, we had letters of credit outstanding in the aggregate principal amount of $83.1, and had $1,166.9 of borrowing availability under the Sixth A&R Credit Agreement.
A deferred tax asset or liability is recognized whenever there are future tax effects from existing temporary differences and operating loss and tax credit carryforwards. Valuation allowances are used to reduce deferred tax assets to the balances that are more likely than not to be realized.
We record income tax liabilities utilizing known obligations and estimates of potential obligations. A deferred tax asset or liability is recognized whenever there are future tax effects from existing temporary differences and operating loss and tax credit carryforwards. Valuation allowances are used to reduce deferred tax assets to the balances that are more likely than not to be realized.
The Senior Notes contain an affirmative covenant regarding our interest coverage ratio determined as of the end of each of our fiscal quarters, calculated as Adjusted EBITDA divided by interest expense excluding costs related to refinancings. The minimum required interest coverage ratio is 2.00.
The Senior Notes contain an affirmative covenant regarding our interest coverage ratio determined as of the end of each of our fiscal quarters, calculated as Adjusted EBITDA divided by interest expense excluding costs related to refinancings. The minimum required interest coverage ratio is 2.00. Our interest coverage ratio was 4.78 for the twelve months ended September 30, 2025.
This MD&A includes the following sections: • Executive summary • Results of operations • Segment results • Liquidity and capital resources • Regulatory matters • Critical accounting estimates Executive Summary Our operations are divided into three reportable segments: U.S. Consumer, Hawthorne and Other. U.S. Consumer consists of our consumer lawn and garden business in the United States.
This MD&A includes the following sections: • Executive summary • Results of operations • Segment results • Liquidity and capital resources • Regulatory matters • Critical accounting estimates Executive Summary U.S. Consumer consists of our consumer lawn and garden business in the United States. Hawthorne consists of our indoor and hydroponic gardening business.
Liquidity and Capital Resources The following table summarizes cash activities for the years ended September 30: 2024 2023 2022 Net cash provided by (used in) operating activities $ 667.5 $ 531.0 $ (129.0) Net cash used in investing activities (100.4) (65.7) (283.2) Net cash (used in) provided by financing activities (527.9) (520.1) 255.3 Operating Activities Cash provided by operating activities totaled $667.5 for fiscal 2024, an increase of $136.5 compared to $531.0 for fiscal 2023.
Liquidity and Capital Resources The following table summarizes cash activities for the years ended September 30: 2025 2024 2023 Net cash provided by operating activities $ 371.3 $ 667.5 $ 531.0 Net cash used in investing activities (112.1) (100.4) (65.7) Net cash used in financing activities (294.0) (527.9) (520.1) Operating Activities Cash provided by operating activities totaled $371.3 for fiscal 2025 compared to $667.5 for fiscal 2024.
Consumer, Hawthorne and Other segments; • higher manufacturing costs, primarily labor, included within “volume, mix and other” in our U.S. Consumer, Hawthorne and Other segments; • inventory write-down charges included within “volume, mix and other” associated with our U.S.
Consumer, Hawthorne and Other segments; and • inventory write-down charges included within “volume, mix and other” associated with our U.S.
Consumer $ 3,013.7 $ 2,843.7 $ 2,928.8 Hawthorne 294.7 467.3 716.2 Other 244.3 240.3 279.1 Consolidated $ 3,552.7 $ 3,551.3 $ 3,924.1 38 Table of Contents THE SCOTTS MIRACLE-GRO COMPANY (Dollars in millions, except per share data) The following table sets forth Segment Profit (Loss) as well as a reconciliation to loss before income taxes, the most directly comparable measure prepared in accordance with U.S. generally accepted accounting principles (“GAAP”): Year Ended September 30, 2024 2023 2022 U.S.
Consumer $ 2,993.7 $ 3,013.7 $ 2,843.7 Hawthorne 165.8 294.7 467.3 Reportable segment total 3,159.5 3,308.4 3,311.0 Other 253.6 244.3 240.3 Consolidated $ 3,413.1 $ 3,552.7 $ 3,551.3 39 Table of Contents THE SCOTTS MIRACLE-GRO COMPANY (Dollars in millions, except per share data) The following table sets forth Segment Profit (Loss) as well as a reconciliation to income (loss) before income taxes, the most directly comparable measure prepared in accordance with U.S. generally accepted accounting principles (“GAAP”): Year Ended September 30, 2025 2024 2023 U.S.
We incurred costs of $9.7 in our U.S. Consumer segment and $27.1 in our Hawthorne segment in the “Cost of sales—impairment, restructuring and other” line in the Consolidated Statements of Operations during fiscal 2022. We incurred costs of $11.9 in our U.S.
We incurred costs of $4.0 in our U.S. Consumer segment and $9.0 in our Hawthorne segment in the “Cost of sales—impairment, restructuring and other” line in the Consolidated Statements of Operations during fiscal 2025.
Segment Results The performance of each reportable segment is evaluated based on several factors, including income (loss) before income taxes, amortization, impairment, restructuring and other charges (“Segment Profit (Loss)”), which is a non-GAAP financial measure.
Segment performance is evaluated based on several factors, including income (loss) before income taxes, amortization, impairment, restructuring and other charges (“Segment Profit (Loss)”), which is a non-GAAP financial measure. We believe this measure is indicative of performance trends and the overall earnings potential of each segment.
We expect fiscal 2025 capital expenditures to be approximately $100.0 and we expect to allocate approximately 60% to maintenance of existing productive assets, 30% to cost savings projects and 10% to innovation and expansion projects. Financing Activities Cash used in financing activities totaled $527.9 for fiscal 2024 compared to $520.1 for fiscal 2023.
We expect fiscal 2026 capital expenditures to be approximately $100.0 and we expect to allocate approximately 46% to maintenance of existing productive assets, 28% to cost savings projects and 26% to innovation and expansion projects. Financing Activities Cash used in financing activities totaled $294.0 for fiscal 2025 compared to $527.9 for fiscal 2024.
Consumer segment, $8.1 in our Hawthorne segment, $0.7 in our Other segment and $7.7 at Corporate in the “Impairment, restructuring and other” line in the Consolidated Statements of Operations during fiscal 2022. Costs incurred since the inception of this restructuring initiative through September 30, 2024 were $58.3 for our U.S.
Consumer segment, $20.7 in our Hawthorne segment, $0.8 in our Other segment and $14.9 at Corporate in the “Impairment, restructuring and other” line in the Consolidated Statements of Operations during fiscal 2023. Costs incurred since the inception of this restructuring initiative through September 30, 2025 were $62.4 for our U.S.
We also believe that weather conditions in any one year, positive or negative, do not materially impact longer-term category growth trends. 30 Table of Contents THE SCOTTS MIRACLE-GRO COMPANY (Dollars in millions, except per share data) Due to the seasonal nature of the consumer lawn and garden business, significant portions of our U.S.
We also believe that weather conditions in any one year, positive or negative, do not materially impact longer-term category growth trends. Due to the seasonal nature of the consumer lawn and garden business, significant portions of our U.S.
Other (income) expense was $19.9, $(0.1) and $0.8 in fiscal 2024, fiscal 2023 and fiscal 2022, respectively. The increase in expense during fiscal 2024 was primarily due to the discount on sales of accounts receivable under the Master Receivables Purchase Agreement. Income (Loss) from Operations Income (loss) from operations was $208.8 in fiscal 2024 compared to $(174.4) in fiscal 2023.
Other (income) expense was $18.8, $19.9 and $(0.1) in fiscal 2025, fiscal 2024 and fiscal 2023, respectively. The increase in other expense for fiscal 2025 and fiscal 2024 compared to fiscal 2023 was primarily due to the discount on sales of accounts receivable under the Master Receivables Purchase Agreement.
The decrease was driven by lower impairment, restructuring and other charges, and lower SG&A, partially offset by lower net sales, a decrease in gross margin rate, higher equity in loss of unconsolidated affiliates, higher interest expense, lower other non-operating income and lower income tax benefit.
The increase was driven by a higher gross margin rate, lower equity in loss of unconsolidated affiliates and lower interest expense, partially offset by lower net sales, higher income tax expense and higher SG&A.
In addition, Corporate consists of general and administrative expenses and certain other income and expense items not allocated to the business segments. See “SEGMENT RESULTS” below for additional information regarding our evaluation of segment performance. Through our U.S. Consumer and Other segments, we are the leading manufacturer and marketer of branded consumer lawn and garden products in North America.
Other primarily consists of our consumer lawn and garden business in Canada. Corporate consists of general and administrative expenses and certain other income and expense items not allocated to the operating segments. See “SEGMENT RESULTS” below for additional information regarding our evaluation of segment performance. Through our U.S.
Other Other segment net sales were $244.3 in fiscal 2024, an increase of 1.7% from fiscal 2023 net sales of $240.3. The increase was driven by higher sales volume of 3.5%, partially offset by decreased pricing of 1.0% and unfavorable foreign exchange rates of 0.8%.
The increase was driven by higher sales volume of 3.5%, partially offset by decreased pricing of 1.0% and unfavorable foreign exchange rates of 0.8%. Other segment profit was $4.7 in fiscal 2024, a decrease of 62.1% from fiscal 2023 segment profit of $12.4.
Certain accounting estimates are particularly significant, including those related to revenue recognition and promotional allowances, income taxes and goodwill and indefinite-lived intangible assets. 46 Table of Contents THE SCOTTS MIRACLE-GRO COMPANY (Dollars in millions, except per share data) We believe that our estimates, assumptions, and judgments are reasonable in that they were based on information available when the estimates, assumptions and judgments were made.
Certain accounting estimates are particularly significant, including those related to revenue recognition and promotional allowances, income taxes and goodwill and indefinite-lived intangible assets. We believe that our estimates, assumptions and judgments are reasonable in that they were based on information available when the estimates, assumptions and judgments were made.
During fiscal 2023, we had net debt repayments of $353.6, paid dividends of $149.1, paid financing and issuance fees of $6.4 and repurchased Common Shares for $9.3 (which includes cash paid to tax authorities to satisfy statutory income tax withholding obligations related to share-based compensation).
During fiscal 2025, we had net debt repayments of $122.1, paid dividends of $154.3 and repurchased Common Shares for $18.4 (which includes cash paid to tax authorities to satisfy statutory income tax withholding obligations related to share-based compensation).
The 4.375% Senior Notes have interest payment dates of February 1 and August 1 of each year. Substantially all of Scotts Miracle-Gro’s directly and indirectly owned domestic subsidiaries serve as guarantors of the 5.250% Senior Notes, the 4.500% Senior Notes, the 4.000% Senior Notes and the 4.375% Senior Notes.
Substantially all of Scotts Miracle-Gro’s directly and indirectly owned domestic subsidiaries serve as guarantors of the 5.250% Senior Notes, the 4.500% Senior Notes, the 4.000% Senior Notes and the 4.375% Senior Notes.
The increase was driven by an increase in our weighted average interest rate, net of the impact of interest rate swaps, of 180 basis points, primarily driven by higher borrowing rates under the Sixth A&R Credit Agreement.
The increase in our weighted average interest rate was primarily driven by higher borrowing rates under the Sixth A&R Credit Agreement.
The increase in our weighted average interest rate was primarily driven by higher borrowing rates under the Sixth A&R Credit Agreement. Interest expense was $178.1 in fiscal 2023, an increase of 50.8% compared to $118.1 in fiscal 2022.
The decrease in our weighted average interest rate was primarily driven by lower borrowing rates under the Sixth A&R Credit Agreement. Interest expense was $158.8 in fiscal 2024, a decrease of 10.8% compared to $178.1 in fiscal 2023.
This increase was driven by lower accounts receivable, higher gross margin, accounts payable timing, lower payments associated with restructuring activities and lower interest payments, partially offset by higher inventory production, higher payments to customers related to promotional programs and lower income tax refunds received.
Cash provided by operating activities totaled $667.5 for fiscal 2024 compared to $531.0 for fiscal 2023. This increase was driven by lower accounts receivable, higher gross margin, accounts payable timing, lower payments associated with restructuring activities and lower interest payments, partially offset by higher inventory production, higher payments to customers related to promotional programs and lower income tax refunds received.
Revenues are measured based on the amount of consideration that we expect to receive as derived from a list price, reduced by estimates for variable consideration. Variable consideration includes the cost of current and continuing promotional programs and expected sales returns.
Revenues are measured based on the amount of consideration that we expect to receive as derived from a list price, reduced by estimates for variable consideration.
Consumer $ 498.0 $ 454.1 $ 568.6 Hawthorne (14.2) (48.1) (21.1) Other 4.7 12.4 20.2 Total Segment Profit (Non-GAAP) 488.5 418.4 567.7 Corporate (117.7) (101.6) (112.4) Intangible asset amortization (15.7) (25.2) (37.1) Impairment, restructuring and other (146.3) (466.0) (852.2) Equity in loss of unconsolidated affiliates (68.1) (101.1) (12.9) Interest expense (158.8) (178.1) (118.1) Other non-operating income (expense), net (5.5) 0.3 6.9 Loss before income taxes (GAAP) $ (23.6) $ (453.3) $ (558.1) U.S.
Consumer $ 572.6 $ 498.0 $ 454.1 Hawthorne 2.8 (14.2) (48.1) Reportable segment total 575.4 483.8 406.0 Other 12.7 4.7 12.4 Corporate (133.4) (117.7) (101.6) Intangible asset amortization (12.3) (15.7) (25.2) Impairment, restructuring and other (83.8) (146.3) (466.0) Equity in loss of unconsolidated affiliates (2.8) (68.1) (101.1) Interest expense (128.8) (158.8) (178.1) Other non-operating income (expense), net (5.3) (5.5) 0.3 Income (loss) before income taxes (GAAP) $ 221.7 $ (23.6) $ (453.3) U.S.
We have implemented this model for a number of years by focusing on research and development and investing approximately 3-5% of our U.S. Consumer segment annual net sales in advertising to support and promote our consumer lawn and garden products and brands. We continually explore new and innovative ways to communicate with consumers.
We have implemented this model for a number of years by focusing on research and development, advertising and consumer activation programs with our customers to support and promote our consumer lawn and garden products and brands. We continually explore new and innovative ways to communicate with consumers.
Our products are marketed under some of the most recognized brand names in the 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.
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.
Interest Expense Interest expense was $158.8 in fiscal 2024, a decrease of 10.8% compared to $178.1 in fiscal 2023. The decrease was driven by lower average borrowings of $554.8, partially offset by an increase in our weighted average interest rate, net of the impact of interest rate swaps, of 40 basis points.
The decrease was driven by lower average borrowings of $554.8, partially offset by an increase in our weighted average interest rate, net of the impact of interest rate swaps, of 40 basis points.
Consumer, Hawthorne and Other segments; and • lower warehousing costs included within “volume, mix and other” in our U.S. Consumer and Hawthorne segments.
Consumer segment; • favorable mix associated with our U.S. Consumer and Hawthorne segments; • lower warehousing and transportation costs included within “volume, mix and other” in our U.S. Consumer and Hawthorne segments; • lower manufacturing costs included within “volume, mix and other” in our U.S.
Transactions between Scotts Miracle-Gro and the Guarantors have been eliminated and the summarized financial information does not reflect investments of the Scotts Miracle-Gro and the Guarantors in the Non-Guarantor subsidiaries. September 30, 2024 Current assets $ 838.4 Non-current assets (a) 1,805.1 Current liabilities 667.3 Non-current liabilities 2,471.6 (a) Includes amounts due from Non-Guarantor subsidiaries of $49.5.
Transactions between Scotts Miracle-Gro and the Guarantors have been eliminated and the summarized financial information does not reflect investments of the Scotts Miracle-Gro and the Guarantors in the Non-Guarantor subsidiaries. September 30, 2025 Current assets $ 831.9 Non-current assets (a) 1,657.4 Current liabilities 640.9 Non-current liabilities 2,297.4 (a) Includes amounts due from Non-Guarantor subsidiaries of $11.4.
Purchase obligations primarily represent commitments for materials used in our manufacturing processes, including urea and packaging, as well as commitments for warehouse services, grass seed, marketing services and information technology services which comprise the unconditional purchase obligations disclosed in “NOTE 18. COMMITMENTS” of the Notes to Consolidated Financial Statements included in this Form 10-K.
Purchase obligations primarily represent commitments for materials used in our manufacturing processes, including urea and packaging, as well as commitments for warehouse services, grass seed, marketing services and information technology services which comprise the unconditional purchase obligations disclosed in “NOTE 17.
Selling, General and Administrative Expenses The following table sets forth the components of selling, general and administrative expenses (“SG&A”): Year Ended September 30, 2024 2023 2022 Advertising $ 141.0 $ 123.7 $ 120.3 Advertising as a percentage of net sales 4.0 % 3.5 % 3.1 % Share-based compensation 57.2 49.7 34.3 Research and development 34.6 35.7 45.3 Amortization of intangibles 13.9 22.6 31.0 Other selling, general and administrative 312.3 319.6 382.1 $ 559.0 $ 551.3 $ 613.0 SG&A increased $7.7, or 1.4%, during fiscal 2024 compared to fiscal 2023.
Consumer segment. 35 Table of Contents THE SCOTTS MIRACLE-GRO COMPANY (Dollars in millions, except per share data) Selling, General and Administrative Expenses The following table sets forth the components of selling, general and administrative expenses (“SG&A”): Year Ended September 30, 2025 2024 2023 Advertising $ 152.3 $ 141.0 $ 123.7 Advertising as a percentage of net sales 4.5 % 4.0 % 3.5 % Share-based compensation 46.7 57.2 49.7 Research and development 34.8 34.6 35.7 Amortization of intangibles 11.7 13.9 22.6 Other selling, general and administrative 357.9 312.3 319.6 $ 603.4 $ 559.0 $ 551.3 SG&A increased $44.4, or 7.9%, during fiscal 2025 compared to fiscal 2024.
Our current payment terms with a majority of our suppliers generally range from 30 to 60 days, which we deem to be commercially reasonable. Our outstanding payment obligations under our supplier finance program were $12.5 and $18.3 at September 30, 2024 and 2023, respectively, and are recorded within accounts payable in the Consolidated Balance Sheets.
Our current payment terms with a majority of our suppliers generally range from 30 to 60 days, which we deem to be commercially reasonable. Our outstanding payment obligations under our supplier finance program are recorded within accounts payable in the Consolidated Balance Sheets and the associated payments are classified as operating activities in the Consolidated Statements of Cash Flows.
The increase for fiscal 2024 was primarily due to higher net sales and a higher gross margin rate, partially offset by higher SG&A driven by advertising expense and higher other expense driven by the discount on sales of accounts receivable. U.S.
Consumer Segment Profit was $498.0 in fiscal 2024, an increase of 9.7% from fiscal 2023 Segment Profit of $454.1. The increase for fiscal 2024 was primarily due to higher net sales and a higher gross margin rate, partially offset by higher SG&A driven by advertising expense and higher other expense driven by the discount on sales of accounts receivable.
(b) Notional amount adjusts in accordance with a specified seasonal schedule. This represents the maximum notional amount at any point in time. Availability and Use of Cash We believe that our cash flows from operations and borrowings under our agreements described herein will be sufficient to meet debt service, capital expenditures and working capital needs for the foreseeable future.
This represents the maximum notional amount at any point in time. 44 Table of Contents THE SCOTTS MIRACLE-GRO COMPANY (Dollars in millions, except per share data) Availability and Use of Cash We believe that our cash flows from operations and borrowings under our agreements described herein will be sufficient to meet debt service, capital expenditures and working capital needs for the foreseeable future.
The increase in sales volume for fiscal 2024 was driven by mulch, soils and controls products as well as increased net sales associated with the Roundup ® marketing agreement. U.S. Consumer Segment Profit was $498.0 in fiscal 2024, an increase of 9.7% from fiscal 2023 Segment Profit of $454.1.
The increase was driven by higher sales volume of 7.3%, partially offset by decreased pricing of 1.3%. The increase in sales volume for fiscal 2024 was driven by mulch, soils and controls products as well as increased net sales associated with the Roundup ® marketing agreement. U.S.
Cost of Sales The following table shows the major components of cost of sales: Year Ended September 30, 2024 2023 2022 Materials $ 1,401.7 $ 1,524.1 $ 1,616.7 Manufacturing labor and overhead 610.8 545.4 546.4 Distribution and warehousing 515.0 556.3 660.1 Costs associated with Roundup ® marketing agreement 91.2 82.5 67.9 Cost of sales 2,618.7 2,708.3 2,891.1 Cost of sales—impairment, restructuring and other 83.5 185.7 160.1 $ 2,702.2 $ 2,894.0 $ 3,051.2 Factors contributing to the change in cost of sales are outlined in the following table: Year Ended September 30, 2024 2023 Volume, mix and other $ (71.4) $ (299.7) Material cost changes (26.6) 112.7 Foreign exchange rates (0.3) (10.4) Costs associated with Roundup ® marketing agreement 8.7 14.6 (89.6) (182.8) Impairment, restructuring and other (102.2) 25.6 Change in cost of sales $ (191.8) $ (157.2) The decrease in cost of sales for fiscal 2024 as compared to fiscal 2023 was primarily driven by: • lower warehousing and transportation costs included within “volume, mix and other” in our U.S.
Consumer, Hawthorne and Other segments. 33 Table of Contents THE SCOTTS MIRACLE-GRO COMPANY (Dollars in millions, except per share data) Cost of Sales The following table shows the major components of cost of sales: Year Ended September 30, 2025 2024 2023 Materials $ 1,179.7 $ 1,401.7 $ 1,524.1 Manufacturing labor and overhead 591.1 610.8 545.4 Distribution and warehousing 490.8 515.0 556.3 Costs associated with Roundup ® marketing agreement 87.0 91.2 82.5 Cost of sales 2,348.6 2,618.7 2,708.3 Cost of sales—impairment, restructuring and other 20.3 83.5 185.7 $ 2,368.9 $ 2,702.2 $ 2,894.0 Factors contributing to the change in cost of sales are outlined in the following table: Year Ended September 30, 2025 2024 Volume, mix and other $ (197.6) $ (71.4) Material cost changes (64.2) (26.6) Costs associated with Roundup ® marketing agreement (4.2) 8.7 Foreign exchange rates (4.1) (0.3) (270.1) (89.6) Impairment, restructuring and other (63.2) (102.2) Change in cost of sales $ (333.3) $ (191.8) The decrease in cost of sales for fiscal 2025 as compared to fiscal 2024 was primarily driven by: • lower material costs in our U.S.
Consumer U.S. Consumer segment net sales were $3,013.7 in fiscal 2024, an increase of 6.0% from fiscal 2023 net sales of $2,843.7. The increase was driven by higher sales volume of 7.3%, partially offset by decreased pricing of 1.3%.
Consumer U.S. Consumer segment net sales were $2,993.7 in fiscal 2025, a decrease of 0.7% from fiscal 2024 net sales of $3,013.7. The decrease was driven by nonrecurring fiscal 2024 sales of bulk raw materials and AeroGarden ® products of 1.4% and decreased pricing of 0.6%, partially offset by higher sales volume of 1.4%.
The recourse obligations of the Company that may arise from time to time are supported by standby letters of credit of $75.0. Transactions under the Master Receivables Purchase Agreement are accounted for as sales of accounts receivable, and the receivables sold are removed from the Consolidated Balance Sheets at the time of the sales transaction.
Transactions under the Master Receivables Purchase Agreement are accounted for as sales of accounts receivable, and the receivables sold are removed from the Consolidated Balance Sheets at the time of the sales transaction.
Results of Operations The following table sets forth the components of earnings as a percentage of net sales: Year Ended September 30, 2024 % of Net Sales 2023 % of Net Sales 2022 % of Net Sales Net sales $ 3,552.7 100.0 % $ 3,551.3 100.0 % $ 3,924.1 100.0 % Cost of sales 2,618.7 73.7 2,708.3 76.3 2,891.1 73.7 Cost of sales—impairment, restructuring and other 83.5 2.4 185.7 5.2 160.1 4.1 Gross margin 850.5 23.9 657.3 18.5 872.9 22.2 Operating expenses: Selling, general and administrative 559.0 15.7 551.3 15.5 613.0 15.6 Impairment, restructuring and other 62.8 1.8 280.5 7.9 693.1 17.7 Other (income) expense, net 19.9 0.6 (0.1) — 0.8 — Income (loss) from operations 208.8 5.9 (174.4) (4.9) (434.0) (11.1) Equity in loss of unconsolidated affiliates 68.1 1.9 101.1 2.8 12.9 0.3 Interest expense 158.8 4.5 178.1 5.0 118.1 3.0 Other non-operating (income) expense, net 5.5 0.2 (0.3) — (6.9) (0.2) Loss before income taxes (23.6) (0.7) (453.3) (12.8) (558.1) (14.2) Income tax expense (benefit) 11.3 0.3 (73.2) (2.1) (120.6) (3.1) Net loss $ (34.9) (1.0) % $ (380.1) (10.7) % $ (437.5) (11.1) % The sum of the components may not equal due to rounding.
The impact that these events and conditions will have on our operational and financial performance will depend on future developments, which are difficult to predict. 32 Table of Contents THE SCOTTS MIRACLE-GRO COMPANY (Dollars in millions, except per share data) Results of Operations The following table sets forth the components of earnings as a percentage of net sales: Year Ended September 30, 2025 % of Net Sales 2024 % of Net Sales 2023 % of Net Sales Net sales $ 3,413.1 100.0 % $ 3,552.7 100.0 % $ 3,551.3 100.0 % Cost of sales 2,348.6 68.8 2,618.7 73.7 2,708.3 76.3 Cost of sales—impairment, restructuring and other 20.3 0.6 83.5 2.4 185.7 5.2 Gross margin 1,044.2 30.6 850.5 23.9 657.3 18.5 Operating expenses: Selling, general and administrative 603.4 17.7 559.0 15.7 551.3 15.5 Impairment, restructuring and other 63.4 1.9 62.8 1.8 280.5 7.9 Other (income) expense, net 18.8 0.6 19.9 0.6 (0.1) — Income (loss) from operations 358.6 10.5 208.8 5.9 (174.4) (4.9) Equity in loss of unconsolidated affiliates 2.8 0.1 68.1 1.9 101.1 2.8 Interest expense 128.8 3.8 158.8 4.5 178.1 5.0 Other non-operating (income) expense, net 5.3 0.2 5.5 0.2 (0.3) — Income (loss) before income taxes 221.7 6.5 (23.6) (0.7) (453.3) (12.8) Income tax expense (benefit) 76.5 2.2 11.3 0.3 (73.2) (2.1) Net income (loss) $ 145.2 4.3 % $ (34.9) (1.0) % $ (380.1) (10.7) % The sum of the components may not equal due to rounding.
The decrease was driven by lower impairment, restructuring and other charges and lower SG&A, partially offset by lower net sales and a decrease in gross margin rate. Equity in Loss of Unconsolidated Affiliates Equity in loss of unconsolidated affiliates associated with Bonnie Plants, LLC was $68.1, $101.1 and $12.9 in fiscal 2024, fiscal 2023 and fiscal 2022, respectively.
The increase was primarily driven by lower impairment, restructuring and other charges and a higher gross margin rate, partially offset by higher other expense and higher SG&A. Equity in Loss of Unconsolidated Affiliates Equity in loss of unconsolidated affiliates was $2.8, $68.1 and $101.1 in fiscal 2025, fiscal 2024 and fiscal 2023, respectively.
Income Taxes Our annual effective tax rate is established based on our pre-tax income (loss), statutory tax rates and the tax impacts of items treated differently for tax purposes than for financial reporting purposes. We record income tax liabilities utilizing known obligations and estimates of potential obligations.
We exclude from revenue any amounts collected from customers for sales or other taxes. Income Taxes Our annual effective tax rate is established based on our pre-tax income (loss), statutory tax rates and the tax impacts of items treated differently for tax purposes than for financial reporting purposes.
Net Loss Net loss was $34.9, or $0.61 per diluted share, in fiscal 2024 compared to $380.1, or $6.79 per diluted share, in fiscal 2023.
Net Income (Loss) Net income (loss) was $145.2, or $2.47 per diluted share, in fiscal 2025 compared to $(34.9), or $(0.61) per diluted share, in fiscal 2024.
During fiscal 2023, we recorded non-cash, pre-tax goodwill and intangible asset impairment charges of $127.9 in the “Impairment, restructuring and other” line in the Consolidated Statements of Operations, comprised of $117.7 of finite-lived intangible asset impairment charges associated with our Hawthorne segment and $10.3 of goodwill impairment charges associated with our Other segment. 36 Table of Contents THE SCOTTS MIRACLE-GRO COMPANY (Dollars in millions, except per share data) During fiscal 2022, we recorded non-cash, pre-tax goodwill and intangible asset impairment charges of $632.4 as a result of interim impairment testing of our Hawthorne segment in the “Impairment, restructuring and other” line in the Consolidated Statements of Operations, comprised of $522.4 of goodwill impairment charges and $110.0 of finite-lived intangible asset impairment charges.
During fiscal 2023, we recorded non-cash, pre-tax goodwill and intangible asset impairment charges of $127.9 in the “Impairment, restructuring and other” line in the Consolidated Statements of Operations, comprised of $117.7 of finite-lived intangible asset impairment charges associated with our Hawthorne segment and $10.3 of goodwill impairment charges associated with our Other segment. Refer to “NOTE 4.
Refer to “NOTE 16. FAIR VALUE MEASUREMENTS” of the Notes to the Consolidated Financial Statements included in this Form 10-K for more information regarding convertible debt investments.
FAIR VALUE MEASUREMENTS” of the Notes to the Consolidated Financial Statements included in this Form 10-K for further details.
The 5.250% Senior Notes have interest payment dates of June 15 and December 15 of each year. On October 22, 2019, Scotts Miracle-Gro issued $450.0 aggregate principal amount of 4.500% Senior Notes due 2029. The 4.500% Senior Notes represent general unsecured senior obligations and rank equal in right of payment with our existing and future unsecured senior debt.
The 5.250% Senior Notes have interest payment dates of June 15 and December 15 of each year. 43 Table of Contents THE SCOTTS MIRACLE-GRO COMPANY (Dollars in millions, except per share data) On October 22, 2019, Scotts Miracle-Gro issued $450.0 aggregate principal amount of 4.500% Senior Notes due 2029.
Our interest coverage ratio was 3.57 for the twelve months ended September 30, 2024. 43 Table of Contents THE SCOTTS MIRACLE-GRO COMPANY (Dollars in millions, except per share data) Receivables Facility We also maintained a Master Repurchase Agreement (including the annexes thereto, the “Repurchase Agreement”) and a Master Framework Agreement, as amended (the “Framework Agreement” and, together with the Repurchase Agreement, the “Receivables Facility”) under which we could sell a portfolio of available and eligible outstanding customer accounts receivable to the purchasers subject to agreeing to repurchase the receivables on a weekly basis.
Receivables Facility We also maintained a Master Repurchase Agreement (including the annexes thereto, the “Repurchase Agreement”) and a Master Framework Agreement, as amended (the “Framework Agreement” and, together with the Repurchase Agreement, the “Receivables Facility”) under which we could sell a portfolio of available and eligible outstanding customer accounts receivable to the purchasers subject to agreeing to repurchase the receivables on a weekly basis.
The increase was primarily driven by lower impairment, restructuring and other charges and a higher gross margin rate, partially offset by higher other expense and higher SG&A. Loss from operations was $(174.4) in fiscal 2023 compared to $(434.0) in fiscal 2022.
Income (Loss) from Operations Income (loss) from operations was $358.6 in fiscal 2025 compared to $208.8 in fiscal 2024. The increase was primarily driven by a higher gross margin rate, partially offset by lower net sales and higher SG&A. Income (loss) from operations was $208.8 in fiscal 2024 compared to $(174.4) in fiscal 2023.
Based on the results of the annual quantitative evaluation for fiscal 2024, the fair values of our indefinite-lived intangible assets substantially exceeded their respective carrying values. A 100 basis point change in the discount rate would not have resulted in an impairment of any of our indefinite-lived intangible assets.
Based on the results of the annual quantitative evaluation for fiscal 2025, the fair value of our U.S. Consumer segment reporting unit substantially exceeded its carrying value. A 100 basis point change in the discount rate would not have resulted in an impairment for this reporting unit.
Consumer, Hawthorne and Other segments; and • inventory write-down charges included within “volume, mix and other” associated with our U.S. Consumer segment. The decrease in gross margin rate for fiscal 2023 as compared to fiscal 2022 was primarily driven by: • higher material costs in our U.S.
Consumer segment. The decrease in cost of sales for fiscal 2024 as compared to fiscal 2023 was primarily driven by: • lower warehousing and transportation costs included within “volume, mix and other” in our U.S. Consumer and Hawthorne segments; • lower material costs in our U.S.
Net Sales Net sales for fiscal 2024 were $3,552.7 as compared to net sales of $3,551.3 for fiscal 2023. Net sales for fiscal 2023 decreased 9.5% from net sales of $3,924.1 for fiscal 2022.
Net Sales Net sales for fiscal 2025 were $3,413.1, a decrease of 3.9% from net sales of $3,552.7 for fiscal 2024. Net sales for fiscal 2024 were flat to net sales of $3,551.3 for fiscal 2023.
As a result, impairment charges that possibly would have been recognized in earlier periods may not be recognized until later periods if actual results deviate unfavorably from earlier estimates. The use of different assumptions would increase or decrease discounted cash flows or earnings projections and, therefore, could change impairment determinations.
As a result, impairment charges that possibly would have been recognized in earlier periods may not be recognized until later periods if actual results deviate unfavorably from earlier estimates.
Consumer segment; • an increase in costs associated with the Roundup ® marketing agreement; and • an increase in impairment, restructuring and other charges. Gross Margin As a percentage of net sales, our gross margin rate was 23.9%, 18.5% and 22.2% for fiscal 2024, fiscal 2023 and fiscal 2022, respectively.
Consumer segment; and • an increase in costs associated with the Roundup ® marketing agreement. 34 Table of Contents THE SCOTTS MIRACLE-GRO COMPANY (Dollars in millions, except per share data) Gross Margin As a percentage of net sales, our gross margin rate was 30.6%, 23.9% and 18.5% for fiscal 2025, fiscal 2024 and fiscal 2023, respectively.
We also received proceeds of $37.0 during fiscal 2023 related to the payoff of seller financing that we provided in connection with a fiscal 2017 divestiture, and had other investing cash outflows of $12.4 primarily associated with currency forward contracts. 40 Table of Contents THE SCOTTS MIRACLE-GRO COMPANY (Dollars in millions, except per share data) For the three fiscal years ended September 30, 2024, we allocated our capital spending as follows: 70% for maintenance of existing productive assets; 20% for cost savings projects, focused primarily on supply chain and information technology; and 10% for innovation and expansion.
We also acquired an additional equity interest in Bonnie Plants, LLC for $21.4 and had other investing cash inflows of $5.0 during fiscal 2024. 41 Table of Contents THE SCOTTS MIRACLE-GRO COMPANY (Dollars in millions, except per share data) For the three fiscal years ended September 30, 2025, we allocated our capital spending as follows: 68% for maintenance of existing productive assets; 22% for cost savings projects, focused primarily on supply chain and information technology; and 10% for innovation and expansion.
Consumer and Other segment net sales ship to our retail customers during our second and third fiscal quarters, as noted in the following table. Our annual net sales are further concentrated in the second and third fiscal quarters by retailers who rely on our ability to deliver products closer to when consumers buy our products.
Consumer and Other segment net sales ship to our retail customers during our second and third fiscal quarters, as noted in the following table.
The improvement was driven by a higher gross margin rate and lower SG&A, partially offset by lower net sales. Hawthorne segment net sales were $467.3 in fiscal 2023, a decrease of 34.8% from fiscal 2022 net sales of $716.2. The decrease was driven by lower sales volume of 38.1%, partially offset by increased pricing of 2.5% and acquisitions of 0.8%.
Hawthorne Segment Profit was $2.8 in fiscal 2025 compared to fiscal 2024 Segment Loss of $(14.2). The improvement was driven by a higher gross margin rate and lower SG&A, partially offset by lower net sales. Hawthorne segment net sales were $294.7 in fiscal 2024, a decrease of 36.9% from fiscal 2023 net sales of $467.3.
Year Ended September 30, 2024 Net sales $ 3,248.6 Gross margin 809.5 Net loss (a) (16.1) (a) Includes intercompany income from Non-Guarantor subsidiaries of $12.5.
Year Ended September 30, 2025 Net sales $ 3,132.7 Gross margin 999.4 Net income (a) 173.5 (a) Includes intercompany income from Non-Guarantor subsidiaries of $5.7.
Through our Hawthorne segment, we are a leading provider of nutrients, lighting and other materials used for indoor and hydroponic gardening in North America.
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 CYCO ® .

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeExpected Maturity Date (Fiscal Year) Total Fair Value 2024 2025 2026 2027 2028 2029 After Long-term debt: Fixed rate debt $ — $ — $ 250.0 $ — $ — $ 1,350.0 $ 1,600.0 $ 1,507.1 Average rate — — 5.3 % — — 4.3 % 4.4 % — Variable rate debt $ 50.0 $ 50.0 $ 525.0 $ — $ — $ — $ 625.0 $ 625.0 Average rate 7.5 % 7.5 % 7.5 % — — — 7.5 % — Interest rate derivatives: Interest rate swaps $ (1.0) $ (1.0) $ (1.1) $ (0.7) $ (0.6) $ — $ (4.4) $ (4.4) Average rate 3.7 % 3.7 % 3.9 % 4.2 % 4.2 % — 3.9 % — Expected Maturity Date (Fiscal Year) Total Fair Value 2023 2024 2025 2026 2027 2028 After Long-term debt: Fixed rate debt $ — $ — $ — $ 250.0 $ — $ 1,350.0 $ 1,600.0 $ 1,283.9 Average rate — — — 5.3 % — 4.3 % 4.4 % — Variable rate debt $ 50.0 $ 50.0 $ 50.0 $ 863.3 $ — $ — $ 1,013.3 $ 1,013.3 Average rate 8.2 % 8.2 % 8.2 % 8.1 % — — 8.1 % — Interest rate derivatives: Interest rate swaps $ 13.1 $ 9.3 $ 7.5 $ 1.5 $ — $ — $ 31.4 $ 31.4 Average rate 1.6 % 2.1 % 2.3 % 3.4 % — — 2.1 % — Excluded from the information provided above are miscellaneous debt instruments of $0.0 and $0.4 and finance lease obligations of $17.8 and $16.9 at September 30, 2024 and 2023, respectively.
Biggest changeExpected Maturity Date (Fiscal Year) Total Fair Value 2025 2026 2027 2028 2029 2030 After Long-term debt: Fixed rate debt $ — $ 250.0 $ — $ — $ 450.0 $ 900.0 $ 1,600.0 $ 1,512.9 Average rate — 5.3 % — — 4.5 % 4.2 % 4.4 % — Variable rate debt $ 50.0 $ 450.0 $ — $ — $ — $ — $ 500.0 $ 500.0 Average rate 6.0 % 6.0 % — — — — 6.0 % — Interest rate derivatives: Interest rate swaps $ (0.8) $ (1.1) $ (0.8) $ (0.8) $ — $ — $ (3.5) $ (3.5) Average rate 3.7 % 3.8 % 3.8 % 3.8 % — — 3.7 % — Expected Maturity Date (Fiscal Year) Total Fair Value 2024 2025 2026 2027 2028 2029 After Long-term debt: Fixed rate debt $ — $ — $ 250.0 $ — $ — $ 1,350.0 $ 1,600.0 $ 1,507.1 Average rate — — 5.3 % — — 4.3 % 4.4 % — Variable rate debt $ 50.0 $ 50.0 $ 525.0 $ — $ — $ — $ 625.0 $ 625.0 Average rate 7.5 % 7.5 % 7.5 % — — — 7.5 % — Interest rate derivatives: Interest rate swaps $ (1.0) $ (1.0) $ (1.1) $ (0.7) $ (0.6) $ — $ (4.4) $ (4.4) Average rate 3.7 % 3.7 % 3.9 % 4.2 % 4.2 % — 3.9 % — Excluded from the information provided above are miscellaneous debt instruments of $5.2 and $0.0 and finance lease obligations of $14.5 and $17.8 at September 30, 2025 and 2024, respectively.
Interest Rate Risk The following table summarizes information about our debt instruments and derivative financial instruments that are sensitive to changes in interest rates as of September 30, 2024 and 2023. For debt instruments, the table presents principal cash flows and related weighted-average interest rates by expected maturity dates.
Interest Rate Risk The following table summarizes information about our debt instruments and derivative financial instruments that are sensitive to changes in interest rates as of September 30, 2025 and 2024. For debt instruments, the table presents principal cash flows and related weighted-average interest rates by expected maturity dates.
Other Market Risks We are subject to market risk from fluctuations in foreign currency exchange rates and fluctuating prices of certain raw materials, including urea and other fertilizer inputs, resins, diesel, gasoline, natural gas, sphagnum peat, bark and grass seed. Refer to “NOTE 15.
Other Market Risks We are subject to market risk from fluctuations in foreign currency exchange rates and fluctuating prices of certain raw materials, including urea and other fertilizer inputs, resins, diesel, gasoline, natural gas, sphagnum peat, bark and grass seed. Refer to “NOTE 14.
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES” of the Notes to Consolidated Financial Statements included in this Form 10-K for discussion of these market risks and the derivatives used to manage these risks. 49 Table of Contents THE SCOTTS MIRACLE-GRO COMPANY (Dollars in millions, except per share data)
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES” of the Notes to Consolidated Financial Statements included in this Form 10-K for discussion of these market risks and the derivatives used to manage these risks. 50 Table of Contents THE SCOTTS MIRACLE-GRO COMPANY (Dollars in millions, except per share data)
The swap agreements had a maximum total U.S. dollar equivalent notional amount of $450.0 and $600.0 at September 30, 2024 and 2023, respectively. Weighted-average variable rates are based on rates in effect at September 30, 2024 and 2023.
The swap agreements had a maximum total U.S. dollar equivalent notional amount of $450.0 at September 30, 2025 and 2024. Weighted-average variable rates are based on rates in effect at September 30, 2025 and 2024.
Assuming average unhedged variable interest rate borrowing levels during fiscal 2024 of $575.0, a change in our variable interest rate of 100 basis points for a full twelve-month period would have an impact of $5.8 on interest expense.
Assuming average unhedged variable interest rate borrowing levels during fiscal 2025 of $525.0, a change in our variable interest rate of 100 basis points for a full twelve-month period would have an impact of $5.3 on interest expense.

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