The Scotts Miracle-Gro Company, a leader in gardening products, has released its financial results for the full year and fourth quarter ending September 30, 2024. Scotts Miracle-Gro Company's Chief Financial Officer, Matt Garth, described fiscal year 2024 as a key transition period. The company focused on enhancing its core operations and achieved significant growth in its primary business areas. Strategic investments in marketing and innovation have been pivotal in boosting sales and ensuring the long-term sustainability of their brands.
These efforts were complemented by improved operational efficiency across the organization. Despite these advancements, the company's subsidiary, Hawthorne Gardening Company, which specializes in products for cannabis growers, reported a notable decrease in net sales. Specifically, Hawthorne's fourth-quarter sales plunged by 46% year-over-year, reaching $80.5 million. This decline aligns with prior quarterly trends, primarily due to the previously announced cessation of its third-party distributed brands line.
Overall, Scotts Miracle-Gro's total net sales for the fourth quarter increased by 11% from the previous year, totaling $414.7 million. The U.S. consumer segment showed robust growth, with net sales surging 54% to $309.7 million. Meanwhile, Hawthorne's sales figures dwindled by nearly half. The gross margin rates for the quarter, both GAAP and non-GAAP adjusted, improved considerably from the previous year, despite remaining in the negative.
GAAP net losses for the fourth quarter were reported at $244 million, a significant improvement from the $468.4 million loss in the prior year. On a non-GAAP adjusted basis, the losses were $131.5 million, excluding costs related to impairment and restructuring. In terms of fiscal year 2024, total net sales were stable at approximately $3.6 billion. U.S. consumer sales climbed by 6%, reaching $3 billion, driven by expanded shelf space and promotional activities in gardening and control products.
Conversely, Hawthorne's yearly sales dropped 37% to $294.7 million, mainly due to halting its third-party distribution business. The company's overall gross margin rate also showed positive movement, rising on both a GAAP and non-GAAP adjusted basis. Operating expenses saw a decline due to strategic cost-reduction measures. A write-down associated with AeroGarden and other charges slightly impacted the overall financial picture. However, non-GAAP adjusted EBITDA grew to $510.1 million, and free cash flow was robust at $583.5 million, marking an increase from the previous year.
In the stock market, shares of Scotts Miracle-Gro traded 4.78% lower at $89 per share during the pre-market session on Wednesday. This comes amid news of a class action lawsuit alleging misleading information and artificially inflated prices. Investors should stay informed about these developments as they could influence market perceptions and stock performance.
