Earnings Preview: Scotts Miracle-Gro (SMG) Q3 Earnings Expected to Decline

Scotts Miracle-Gro (SMG) is projected to report a 5.2% year-over-year decline in Q3 earnings to $2.19 per share, despite an anticipated 2.4% revenue increase to $1.23 billion, with results expected July 30. Although the consensus EPS estimate saw a slight upward revision, the Most Accurate Estimate is lower, resulting in a negative Earnings ESP of -5.81%, indicating recent bearish analyst sentiment. This, combined with a Zacks Rank #3, suggests SMG is not a strong candidate for an earnings beat, despite having surpassed consensus estimates in three of the last four quarters.

Analysis

Scotts Miracle-Gro (SMG) faces a challenging outlook for its upcoming Q3 2025 earnings report, with consensus estimates pointing to a divergence between top-line growth and profitability. Revenues are forecast to increase 2.4% year-over-year to $1.23 billion, but earnings per share (EPS) are expected to decline by 5.2% to $2.19, suggesting potential margin compression. While the consensus EPS estimate has seen a minor upward revision of 0.32% over the last 30 days, more recent analyst sentiment appears to be turning bearish. This is evidenced by a negative Zacks Earnings ESP (Expected Surprise Prediction) of -5.81%, which indicates that the most recent analyst estimates are lower than the consensus. This negative ESP, combined with a neutral Zacks Rank #3 (Hold), makes it difficult to anticipate a positive earnings surprise. Although the company has a history of surpassing consensus EPS estimates in three of the last four quarters, the current forward-looking indicators signal caution ahead of the July 30th announcement.

Key Decisions for Investors

• Given the negative Earnings ESP of -5.81% and the forecast for a 5.2% YoY earnings decline, investors should exercise caution, as the probability of a positive earnings surprise appears low.
• Focus on management's commentary during the earnings call for insights into the drivers of margin pressure, particularly the reasons for declining profitability despite rising revenues.
• Monitor for potential downside volatility post-earnings, as the stock may react negatively even to an in-line report due to the recent bearish shift in analyst sentiment.