The Scotts Miracle-Gro Company Investor Day 2026

I'm Brad Chelton, Head of Investor Relations. We're pleased to have many of our investors and analysts joining us today, both in person here in New York City or on our live webcast. We're excited about the progress we've made over the past few years, and we're excited to talk to you today about where we're headed. We have a comprehensive agenda for you today. Our presentation will run approximately two and a half hours, followed by a dedicated Q&A session. You'll hear from a number of our senior leaders today, including our executive team, as well as functional leaders across marketing, sales, R&D, and supply chain. Nate will kick us off with an overview of our SMG 2.0 strategy, followed by deeper dives into our category, our consumer, channel diversification, innovation, and operational efficiency.

We'll take a short break and Mark will wrap us up with our financial outlook. For our virtual audience, a replay of this webcast and all presentation slides will be published on our website at investor.scotts.com following the conclusion of the event. Before we begin, I want to share our safe harbor disclosure and remind everyone that today's presentation will contain forward-looking statements. These statements are based on our current expectations and involve inherent risks and uncertainties that could cause actual results to differ materially. Please refer to our Form 10-K filed with the SEC for details of the full range of risk factors that could impact our results. Additionally, we will reference certain non-GAAP financial measures today. You can find the required reconciliations to the most directly comparable GAAP metrics in the appendix of our presentation slides.

With that, it's now my pleasure to turn the floor over to our CEO, Nate Baxter.

All right. Thank you, Brad. Well, good morning, everybody. Can you hear me? Is this on? Yep, okay. I'm going to kick us off here. We're going to take you on a journey today. I hope you're going to be patient, sit with us because, as we've promised, we're going to go through a lot of detail of the building blocks of the strategy moving forward. We're going to talk about our capital allocation strategy. Before we look forward, I want to sort of reflect back. This company was founded in 1868 by O.M. Scott. He was like the original disruptor. He invented weedless grass seed. If I think about this business and what we've done over the last nearly 160 years and what we want to do moving forward, the key message here is we have to continuously disrupt ourselves.

Being in business 158 years, it's not a reason to be careful. We absolutely must be willing to see around corners and try to figure out what comes next. It's a category that, as you'll see when some of the team comes up and talks, people love. People are engaged. We see it continuing to grow, but we also know consumer preferences are changing, and it's important for us to make sure that you understand how we're going to adapt with the time. Before I kick off in detail, I just want to give credit to Jim. He handed me a company with brands that most CEOs only dream about. My job isn't really to reinvent what he built, it's to future-proof it. It's to take us in a direction that will follow our consumer and enable us to grow our business.

I'm going to share a little bit how the vision of SMG 2.0 came to life. First, let's look back a little at the history of Scotts. I believe we have a right to win moving forward. The old saying of what got you to where we are isn't going to get us to where we need to go. This question is actually the genesis of SMG 2.0. It's a question I started asking the team internally about two years ago. It's a really important question. Who are we and what do we stand for? When I took this job, about half the people I knew thought it was amazing. First of all, they thought I was a little bit nuts for leaving the semiconductor industry.

Once they got their head wrapped around that, I'd say about half the folks that I talked to said, "Wow, what a great company. Does amazing things. Gardening is such a beautiful pastime." The other half said, "Wow, you're going to a chemical company? That company poisons the world." I was really surprised by that. We started with this question, which is if we look at where the consumer is going, we need to ask ourselves who are we and what do we stand for? We need to make sure once we figure that out, our associates are all in on that.

One of the three key points I want you to take away today is we talk about our superpowers, and we'll talk about innovation and our brands and our supply chain and our sales force, but there's one superpower that underlines all of that. It's our people. We need to get our people aligned to where we want to go. We'll never be able to sell this to the consumer if we don't believe it with conviction. I hope today by the time you leave here, you have a very strong understanding of the people and the culture. As we dig into this, we started asking ourselves, how do we evolve from thinking about things from a functional standpoint to thinking about things in more of a lifestyle framing? You've probably heard me say this many times.

I will tell you the first time I started saying this internally, I got a lot of side eyes. "Nate, what are you talking about? We're not a lifestyle company. We don't get to decide if we're a lifestyle company." Those are all true, except the first part. I do think we are a lifestyle company. We need to look at things differently, right? You'll hear today, we'll talk less about products, we'll talk more about the living spaces, less about the journey, more about the destination. We're a seasonal business. How do we offset that? You'll hear us talk, and there's some examples that Sadie and team will bring to bear that how we're focused on pushing the shoulders of the season, whether it's through the controls business or through the indoor gardening business. The other question we ask ourselves is, are we really a health and wellness company?

If you read the press, gardening is one of the best activities for not only mental, but physical wellbeing. We have a right to lean into that. Again, this is how we frame how we want our associates as they think about next-generation products, how to reach the next generation and consumer. We want them to have this mindset. We started with a purpose, and our purpose is we care for the living spaces that take care of us. What's embodied in that? As I said, mental health, physical wellbeing, longevity, care for our families, our pets, and the Earth. This point, and I'm going to tell you a story that my team has heard probably a dozen times, but this is when it all came into focus for me. My sister lives in Chicago. She lives in Oak Park, Illinois. It's a suburb. Small yards, big houses on fairly small properties.

We were sitting out back having a glass of wine, and I was trying to talk about her grass and her herb garden. She was talking about how her kids enjoy playing there. They had a pizza oven. They had a pergola. It became clear to me that it wasn't about any one of those things. It was about the sum of those things. She treats that just like it's another part of her indoor living space. For me, that was the pivotal moment of it's these living spaces that take care of us, and what we enable consumers to do is to take care of those spaces. Again, we told the team the products are important, and we will talk about them. Let's focus less on the products and more about what they enable.

For us, that was really the baseline of how we set a vision for who we want to be, and by the way, a totally different way of thinking for Scotts. Old Scotts, highly siloed. I would say not a lot of cross-functional cooperation. Everybody was trying to win. The new Scotts is all about breaking those silos down, and I hope you'll see that reflected in the team today as they present. Yes, each business unit needs to stand on its own. Yes, they all want to win. At the same time, we know the sum of our parts is greater than these parts individually. We know there are cross-marketing opportunities across business units. You'll start to see some of that come out. We'll talk about technology platforms that span across product categories. Be patient with us on this journey.

We've got a lot of material to share today, and I think you'll be surprised at sort of what you learn. All right, let's start to get a little bit more into the details. The first thing I'm going to tell you, and you're going to hear from the team today, is we're going to be honest with ourselves and with our investors about our headwinds. We do have headwinds. We have a brick-and-mortar retail environment that is changing. The last few years, there's been net negative footsteps in those stores. We have a digital world that was accelerated with COVID that quite frankly, we were behind on. I think less than 2% of our point-of-sale takeaway was through e-com, pre-pandemic, 2018 era. We know there is competition out there. We know that CPG companies are attracted to this space. By the way, I see that as a positive.

We are the industry leader in terms of spending media talking about lawn and garden, I always welcome others to spend their money in this space. That aside, they are fierce competitors and they have deep pocketbooks, and we need to be aware of that. Private label. Thankfully, private label share has remained flat, like we've told you, we take that threat very seriously. More importantly, the rise of service and tech solutions. We know consumers are pressed for time, we'll talk a little bit about what we're doing in that space. This is the level set. This is literally straight out of a memo that I wrote for the board that said, "Hey, what are our challenges and what do we need to do to overcome these?" As we think about what we need to do, we established pillars.