SMG Q2 2026 Earnings Transcript

Motley Fool Transcribing, The Motley Fool

Wed, April 29, 2026 astatine 12:07 PM CDT 47 min read

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Date

Wednesday, April 29, 2026 astatine 9 a.m. ET

Call participants

• Chairman and CEO — James Hagedorn

• President and Chief Operating Officer — Nate Baxter

• Chief Financial Officer — Mark Scheiwer

• General Manager, Lawns — John Sass

• GM, Ortho — Mike Davitt

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Full Conference Call Transcript

James Hagedorn: Good morning, everyone. Results number and ours talk for themselves. Through our archetypal 6 months of the fiscal year, we continued connected our maturation trajectory and made advancement toward each azygous 1 of our afloat twelvemonth fiscal imperatives. This marks implicit 2 years of driving improved results and 4 years of hard choices, self-help and fiscal recovery. More importantly, we delivered 2 large accomplishments that are the last pieces of our journey. They see closing the 4th with leverage astatine 3.71x debt-to-EBITDA, the archetypal clip successful 4 years that we're beneath 4x and the divestiture of Hawthorne. We're astatine the constituent wherever everything we've been moving toward is coming together. Leverage is successful a mean authorities wherever we're comfy operating.

Gross borderline enlargement is connected way for our targets. Our premix strategy to absorption connected high-margin branded products is working. And escaped currency flow, EBITDA and EPS are each exceeding expectations. When you look astatine our full performance, here's wherever we find ourselves today. We proceed to hone our superpowers and put successful strengthening our brands, R&D, proviso concatenation and sales. We person important maturation opportunities and are taking marketplace share. Our retail relationships are stronger than ever. Our user is steadfast and engaged. We person a proven and battle-tested enactment team. And we've lived up to each of our commitments. The existent question is wherever bash we spell from here?

First, we're acceptable to embark connected the archetypal tranche of the multiyear stock repurchase programme we announced past 4th and said would statesman erstwhile leverage was comfortably successful the 3s. We're there. The eventual extremity is to bargain backmost astatine slightest 1/3 of our outstanding shares. It volition beryllium net accretive, won't adhd to our indebtedness level and has 0 implementation risk. That's wherefore it's the lone important M&A we're funny in. I've asked Mark to determination guardant with the repurchases successful a mode that tin beryllium easy modulated based connected our results and superior allocation needs portion maintaining leverage successful the 3s.

When you look astatine our accomplishments successful total, it's wide we're 1 of the champion user merchandise franchises successful America. It's conscionable not showing up successful our stock price. And that's good due to the fact that it makes the timing of our stock repurchase adjacent much attractive. We don't deliberation we're decently valued. And erstwhile you furniture successful our maturation plans, were the benignant of concern that should entreaty to anyone who wants to beryllium portion of a marketplace person with a batch of upside. There's a 2nd reply to the what's adjacent question and that involves moving to the adjacent signifier of growth.