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Scotts Miracle-Gro (SMG) Q4 Earnings Lag Estimates, Sales Top
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The Scotts Miracle-Gro Company (SMG - Free Report) reported net income from continuing operations of $4.2 million or 7 cents per share in fourth-quarter fiscal 2020 (ended Sep 30, 2020) against a net loss of $55.5 million or 99 cents per share in the year-ago quarter.
Barring one-time items, adjusted earnings per share (EPS) were 6 cents, up 106.6% year over year. However, the figure missed the Zacks Consensus Estimate of 7 cents.
Net sales surged 78.9% year over year to $890.3 million and beat the consensus mark of $884.6 million.
Company-wide gross margin rate (as adjusted) was 24.3% compared with 18.5% in the year-ago quarter.
FY20 Results
Adjusted earnings for fiscal 2020 surged 62% year over year to $7.24 per share, while net sales increased 31% to $4,131.6 million.
The Scotts MiracleGro Company Price, Consensus and EPS Surprise
In the fiscal fourth quarter, net sales in the U.S. Consumer division increased 90% year over year to $497.2 million. The segment reported profits of $44.1 million against a net loss of $20.7 million in the prior-year quarter.
Net sales in the Hawthorne segment rose 68% year over year to $351.9 million in the reported quarter. The segment’s profits surged 81% year over year to $39.6 million.
Per the company, growth in the U.S. Consumer and Hawthorne segments was witnessed across all product categories, geographies and retail channels.
Net sales in the Other segment increased 58% year over year to $41.2 million. The segment reported a net loss of $3.2 million in the quarter compared with $2.6 million in the prior-year quarter.
Balance Sheet
At the end of fiscal 2020, the company had cash and cash equivalents of $16.6 million, down 11.7% year over year. Long-term debt was $1,455.1 million, down 4.5% year over year.
Outlook
In the U.S. Consumer unit, the company projects sales to be flat-to-down 5% for fiscal 2021. It expects sales in the Hawthorne segment to rise 15-20% in fiscal 2021.
Based on these assumptions, the company projects adjusted earnings per share between $8 and $8.40. Free cash flow is expected to be around $325 million.
The company expects results for the U.S Consumer and Hawthorne segments in the first half of fiscal 2021 to trend above its full-year view, which is expected to be partly offset by a challenging second half of the year.
Price Performance
Shares of Scotts Miracle-Gro have rallied 57.1% in the past year against the industry’s 10.5% decline.
Zacks Rank & Other Key Picks
Scotts Miracle-Gro currently carries a Zacks Rank #2 (Buy).
Agnico Eagle has an expected earnings growth rate of 100% for 2020. Its shares have returned 34.1% in the past year.
Barrick has an expected earnings growth rate of 100% for 2020. The company’s shares have surged 62.9% in the past year.
B2Gold has an expected earnings growth rate of 250% for 2020. The company’s shares have gained 77.1% in the past year.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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Scotts Miracle-Gro (SMG) Q4 Earnings Lag Estimates, Sales Top
The Scotts Miracle-Gro Company (SMG - Free Report) reported net income from continuing operations of $4.2 million or 7 cents per share in fourth-quarter fiscal 2020 (ended Sep 30, 2020) against a net loss of $55.5 million or 99 cents per share in the year-ago quarter.
Barring one-time items, adjusted earnings per share (EPS) were 6 cents, up 106.6% year over year. However, the figure missed the Zacks Consensus Estimate of 7 cents.
Net sales surged 78.9% year over year to $890.3 million and beat the consensus mark of $884.6 million.
Company-wide gross margin rate (as adjusted) was 24.3% compared with 18.5% in the year-ago quarter.
FY20 Results
Adjusted earnings for fiscal 2020 surged 62% year over year to $7.24 per share, while net sales increased 31% to $4,131.6 million.
The Scotts MiracleGro Company Price, Consensus and EPS Surprise
The Scotts MiracleGro Company price-consensus-eps-surprise-chart | The Scotts MiracleGro Company Quote
Segment Details
In the fiscal fourth quarter, net sales in the U.S. Consumer division increased 90% year over year to $497.2 million. The segment reported profits of $44.1 million against a net loss of $20.7 million in the prior-year quarter.
Net sales in the Hawthorne segment rose 68% year over year to $351.9 million in the reported quarter. The segment’s profits surged 81% year over year to $39.6 million.
Per the company, growth in the U.S. Consumer and Hawthorne segments was witnessed across all product categories, geographies and retail channels.
Net sales in the Other segment increased 58% year over year to $41.2 million. The segment reported a net loss of $3.2 million in the quarter compared with $2.6 million in the prior-year quarter.
Balance Sheet
At the end of fiscal 2020, the company had cash and cash equivalents of $16.6 million, down 11.7% year over year. Long-term debt was $1,455.1 million, down 4.5% year over year.
Outlook
In the U.S. Consumer unit, the company projects sales to be flat-to-down 5% for fiscal 2021. It expects sales in the Hawthorne segment to rise 15-20% in fiscal 2021.
Based on these assumptions, the company projects adjusted earnings per share between $8 and $8.40. Free cash flow is expected to be around $325 million.
The company expects results for the U.S Consumer and Hawthorne segments in the first half of fiscal 2021 to trend above its full-year view, which is expected to be partly offset by a challenging second half of the year.
Price Performance
Shares of Scotts Miracle-Gro have rallied 57.1% in the past year against the industry’s 10.5% decline.
Zacks Rank & Other Key Picks
Scotts Miracle-Gro currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the basic materials space are Agnico Eagle Mines Limited (AEM - Free Report) , Barrick Gold Corporation (GOLD - Free Report) and B2Gold Corp (BTG - Free Report) . While Agnico Eagle sports a Zacks Rank #1 (Strong Buy), Barrick and B2Gold carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Agnico Eagle has an expected earnings growth rate of 100% for 2020. Its shares have returned 34.1% in the past year.
Barrick has an expected earnings growth rate of 100% for 2020. The company’s shares have surged 62.9% in the past year.
B2Gold has an expected earnings growth rate of 250% for 2020. The company’s shares have gained 77.1% in the past year.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>