30.7%.

That was the increase in Scotts Miracle-Gro's accounts receivable during the three months ended June 27, compared with the same three-month period a year earlier. Revenue rose just 1.1%. The lawn-and-garden company's sales were nearly stationary, but more of the money owed to it was sitting in invoices.

The income statement was moving in the opposite direction. Net income fell 24.7%, and operating income fell 23.5%. Cash declined to $27.7M, leaving the central question less about whether Scotts sold more and more about how much of those sales turned into cash.

Scotts gave a specific explanation for the cash decline, pointing to lower receivables sales under its master agreement, among other factors.

"The decrease was driven by lower accounts receivable sales under the Master Receivables Purchase Agreement, higher SG&A and higher short-term variable cash incentive compensation payments, partially offset by accounts payable timing, higher gross margin and the timing of inventory production."

Scotts Miracle-Gro, Form 10-Q, Aug. 5, 2026

In plain English, Scotts sold fewer receivables through its master agreement during the period. That reduced one source of cash even as accounts receivable climbed. The company does not say why the receivables balance increased by 30.7%.

Profit compression had its own set of receipts. Scotts said higher impairment, restructuring, and other charges, along with higher other non-operating expense and a lower gross margin rate, weighed on results.

"For the three months ended June 27, 2026, the decrease was primarily driven by higher impairment, restructuring and other charges and a lower gross margin rate, partially offset by higher net sales."

Scotts Miracle-Gro, Form 10-Q, Aug. 5, 2026

The result was a thinner operating margin, down to 14.5% from 19.1% a year earlier. Gross margin also slipped to 31.2% from 32.1%. Scotts' table attributes the gross-margin decline primarily to volume, mix, and other factors, including higher transportation costs in the US. Pricing reduced the margin slightly, while material costs provided some offset.

That makes the filing more than a flat-sales report. Scotts sold roughly the same amount, kept less of each dollar, and converted less of the business into cash. Capital spending was also up 15.8%, while free-cash-flow margin declined 0.5 percentage points. None of those figures alone explains the receivables increase, but together they put the cash line in the foreground.

There is some longer-running context. Scotts' fiscal 2025 revenue was $3.4B, down 3.9% from the prior year, even as operating margin recovered to 10.5%. The latest three-month period shows a mixed picture: sales rose 1.1% from the comparable period, while operating profitability fell.

Shares closed at $66.37 on Aug. 4, down 2.6% that day. The company's next quarterly report has one factual item to put beside this one: what happened to accounts receivable and sales under the receivables purchase agreement?

Scotts Miracle-Gro's Aug. 5 10-Q leaves that accounts-receivable and receivables-sales question open for its next quarterly report?