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Scotts Miracle-Gro (SMG) Q1 Earnings Lag Estimates, Sales Beat
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The Scotts Miracle-Gro Company (SMG - Free Report) reported a loss from continuing operations of $50 million or 90 cents per share in first-quarter fiscal 2022 (ended Jan 1, 2022) compared with a profit of $25.2 million or 43 cents per share in the year-ago quarter.
Barring one-time items, the adjusted loss was 88 cents per share against earnings of 39 cents a year ago. The figure was wider than the Zacks Consensus Estimate of a loss of 81 cents.
Net sales fell 24.4% year over year to $566 million and beat the consensus mark of $554.7 million.
Company-wide gross margin rate (as adjusted) was 21% compared with 25.5% in the year-ago quarter.
The Scotts MiracleGro Company Price, Consensus and EPS Surprise
In the first quarter, net sales in the U.S. Consumer division declined 16% year over year to $342.4 million. The segment delivered a profit of $10.7 million against $45.3 million in the prior-year quarter.
Net sales in the Hawthorne segment declined 38% year over year to $190.6 million in the reported quarter. The segment reported a loss of $5.3 million, down 113% year over year.
Net sales in the Other segment rose 6% year over year to $33 million. The segment reported a profit of $1.3 million.
Balance Sheet
At the end of the first quarter, the company had cash and cash equivalents of $16.4 million, down 23.7% year over year. The long-term debt was $3,082.2 million, up 55.7% year over year.
Outlook
The company noted that better-than-expected results in the U.S. Consumer segment, along with additional pricing actions that will take effect in the third quarter, allowed it to raise full-year sales guidance to a range of +2% to -2%. The earlier guided range was flat to -4%.
SMG also announced plans to consolidate U.S. lighting manufacturing for Hawthorne into a single location and to close another recently acquired assembly facility and move those operations to its Santa Rosa, CA site. A restructuring charge of up to $5 million is projected to be recorded in the second quarter and will be excluded from the company’s full-year adjusted results.
Price Performance
Shares of Scotts Miracle-Gro have declined 38.9% in the past year against a 22.4% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Scotts Miracle-Gro currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Albemarle Corporation (ALB - Free Report) , Nutrien Ltd. (NTR - Free Report) and AdvanSix Inc. (ASIX - Free Report) .
Albemarle, currently sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 51.3% for the current year. The Zacks Consensus Estimate for ALB's earnings for the current year has been revised 5.4% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Albemarle beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 22.1%. ALB has rallied around 39.1% over a year.
Nutrien, sporting a Zacks Rank #1, has a projected earnings growth rate of 53.8% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 17.4% upward in the past 60 days.
Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 73.5%, on average. NTR has rallied around 42% in a year.
AdvanSix has a projected earnings growth rate of 7.4% for the current year. The Zacks Consensus Estimate for ASIX’s current-year earnings has been revised 5.3% upward in the past 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 46.9%. ASIX has surged 83.5% over a year. The company sports a Zacks Rank #1.
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Scotts Miracle-Gro (SMG) Q1 Earnings Lag Estimates, Sales Beat
The Scotts Miracle-Gro Company (SMG - Free Report) reported a loss from continuing operations of $50 million or 90 cents per share in first-quarter fiscal 2022 (ended Jan 1, 2022) compared with a profit of $25.2 million or 43 cents per share in the year-ago quarter.
Barring one-time items, the adjusted loss was 88 cents per share against earnings of 39 cents a year ago. The figure was wider than the Zacks Consensus Estimate of a loss of 81 cents.
Net sales fell 24.4% year over year to $566 million and beat the consensus mark of $554.7 million.
Company-wide gross margin rate (as adjusted) was 21% compared with 25.5% in the year-ago quarter.
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 first quarter, net sales in the U.S. Consumer division declined 16% year over year to $342.4 million. The segment delivered a profit of $10.7 million against $45.3 million in the prior-year quarter.
Net sales in the Hawthorne segment declined 38% year over year to $190.6 million in the reported quarter. The segment reported a loss of $5.3 million, down 113% year over year.
Net sales in the Other segment rose 6% year over year to $33 million. The segment reported a profit of $1.3 million.
Balance Sheet
At the end of the first quarter, the company had cash and cash equivalents of $16.4 million, down 23.7% year over year. The long-term debt was $3,082.2 million, up 55.7% year over year.
Outlook
The company noted that better-than-expected results in the U.S. Consumer segment, along with additional pricing actions that will take effect in the third quarter, allowed it to raise full-year sales guidance to a range of +2% to -2%. The earlier guided range was flat to -4%.
SMG also announced plans to consolidate U.S. lighting manufacturing for Hawthorne into a single location and to close another recently acquired assembly facility and move those operations to its Santa Rosa, CA site. A restructuring charge of up to $5 million is projected to be recorded in the second quarter and will be excluded from the company’s full-year adjusted results.
Price Performance
Shares of Scotts Miracle-Gro have declined 38.9% in the past year against a 22.4% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Scotts Miracle-Gro currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Albemarle Corporation (ALB - Free Report) , Nutrien Ltd. (NTR - Free Report) and AdvanSix Inc. (ASIX - Free Report) .
Albemarle, currently sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 51.3% for the current year. The Zacks Consensus Estimate for ALB's earnings for the current year has been revised 5.4% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Albemarle beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 22.1%. ALB has rallied around 39.1% over a year.
Nutrien, sporting a Zacks Rank #1, has a projected earnings growth rate of 53.8% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 17.4% upward in the past 60 days.
Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 73.5%, on average. NTR has rallied around 42% in a year.
AdvanSix has a projected earnings growth rate of 7.4% for the current year. The Zacks Consensus Estimate for ASIX’s current-year earnings has been revised 5.3% upward in the past 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 46.9%. ASIX has surged 83.5% over a year. The company sports a Zacks Rank #1.