We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Scotts (SMG) Up 6% Since Last Earnings Report?
Read MoreHide Full Article
It has been about a month since the last earnings report for Scotts Miracle-Gro (SMG - Free Report) . Shares have added about 6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Scotts due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Scotts Miracle-Gro reported a fourth-quarter fiscal 2023 (ended Sep 30, 2023) loss of $468.4 million or $8.33 per share compared with a loss of $220.1 million or $3.97 per share in the year-ago quarter.
Barring one-time items, the adjusted loss was $2.77 per share, wider than a loss of $2.04 a year ago. The figure was narrower than the Zacks Consensus Estimate of a loss of $2.83.
Net sales fell around 24.1% year over year to $374.5 million but surpassed the consensus mark of $331.2 million. The decline in sales was due to lower sales in the U.S. Consumer and Hawthorne segments.
Segment Details
In the fiscal fourth quarter, net sales in the U.S. Consumer division were down 33% year over year to $201 million. It was higher than our estimate of $173 million.
Net sales in the Hawthorne segment tumbled 11% year over year to $149.7 million in the reported quarter. The figure was higher than our estimate of $149 million.
Net sales in the other segment increased 3% year over year to $23.8 million.
Balance Sheet
At the end of fiscal 2023, the company had cash and cash equivalents of $31.9 million, down from $86.8 million in fiscal 2022. Long-term debt was $2,557.4 million, down from $2,826.2 million in fiscal 2022.
FY2024 Outlook
The company noted that its outlook for fiscal 2024 incorporates significant progress on margin recovery while adjusting for a higher share count, effective tax rate and average cost of borrowing compared with fiscal 2023.
It has developed an aggressive operating plan for fiscal 2024 that is built upon strong engagement with retailer partners and sustained diligence with cost management, free cash flow generation and debt repayment.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -61.5% due to these changes.
VGM Scores
At this time, Scotts has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Scotts has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Scotts (SMG) Up 6% Since Last Earnings Report?
It has been about a month since the last earnings report for Scotts Miracle-Gro (SMG - Free Report) . Shares have added about 6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Scotts due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Scotts Miracle-Gro’s Q4 Earnings & Sales Beat Estimates
Scotts Miracle-Gro reported a fourth-quarter fiscal 2023 (ended Sep 30, 2023) loss of $468.4 million or $8.33 per share compared with a loss of $220.1 million or $3.97 per share in the year-ago quarter.
Barring one-time items, the adjusted loss was $2.77 per share, wider than a loss of $2.04 a year ago. The figure was narrower than the Zacks Consensus Estimate of a loss of $2.83.
Net sales fell around 24.1% year over year to $374.5 million but surpassed the consensus mark of $331.2 million. The decline in sales was due to lower sales in the U.S. Consumer and Hawthorne segments.
Segment Details
In the fiscal fourth quarter, net sales in the U.S. Consumer division were down 33% year over year to $201 million. It was higher than our estimate of $173 million.
Net sales in the Hawthorne segment tumbled 11% year over year to $149.7 million in the reported quarter. The figure was higher than our estimate of $149 million.
Net sales in the other segment increased 3% year over year to $23.8 million.
Balance Sheet
At the end of fiscal 2023, the company had cash and cash equivalents of $31.9 million, down from $86.8 million in fiscal 2022. Long-term debt was $2,557.4 million, down from $2,826.2 million in fiscal 2022.
FY2024 Outlook
The company noted that its outlook for fiscal 2024 incorporates significant progress on margin recovery while adjusting for a higher share count, effective tax rate and average cost of borrowing compared with fiscal 2023.
It has developed an aggressive operating plan for fiscal 2024 that is built upon strong engagement with retailer partners and sustained diligence with cost management, free cash flow generation and debt repayment.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -61.5% due to these changes.
VGM Scores
At this time, Scotts has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Scotts has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.