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Scotts Miracle-Gro (SMG) Q4 Earnings and Sales Lag Estimates
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The Scotts Miracle-Gro Company (SMG - Free Report) recorded net loss from continuing operations of $130.6 million or $2.36 per share in fourth-quarter fiscal 2018 (ended Sep 30, 2018), wider than a loss of $42.3 million or 72 cents in the year-ago quarter.
Barring one-time items, adjusted loss came in at 75 cents per share in the quarter, which was wider than the Zacks Consensus Estimate of a loss of 67 cents.
Sales rose roughly 15% year over year to $433.9 million. However, the figure trailed the Zacks Consensus Estimate of $442.6 million.
Company-wide adjusted gross margin rate declined to 19.2% from 23.4% a year ago. The company recorded a non-cash impairment of $94.6 million associated with goodwill in the Hawthorne segment. Moreover, it recorded a charge of $20 million in discontinued operations for a litigation matter related to wild bird food business, which was previously divested.
FY18 Results
Adjusted net income for the fiscal 2018 fell roughly 11% year over year to $211.6 million or $3.71 per share, while net sales rose roughly 1% to $2,663.4 million.
Scotts Miracle-Gro Company (The) Price, Consensus and EPS Surprise
In the fiscal fourth quarter, sales in the U.S. Consumer division fell roughly 2% year over year to $252.6 million, mainly due to focused inventory productivity efforts with specific major retail accounts. The segment swung to profit of $5.3 million from a loss of $0.3 million a year ago.
Sales in the Hawthorne segment jumped around 65% to $152.2 million in the quarter, which was mainly driven by acquisitions. The segment’s profitability declined 94% year over year to $0.5 million.
Sales in the company’s Other segment rose 9% to $29.1 million. The segment swung to a profit of $0.7 million in the quarter against a loss of $0.9 million a year ago.
Balance Sheet
As of Sep 30, Scotts Miracle-Gro had cash and cash equivalents of $33.9 million, down around 71.9% year over year. Long-term debt was $1,883.8 million, up roughly 49.7%.
Outlook
The company provided guidance for fiscal 2019. Adjusted earnings per share (EPS) are forecast in the band of $4.10-$4.30.
It expects sales to grow 10-11%, assuming U.S. Consumer segment will grow 1-2% and the balance from the Hawthorne segment. Within the Hawthorne segment, acquisitions are projected to contribute 8% on a company-wide basis.
Additionally, the company expects pricing to add 3% to the U.S. Consumer unit on a full-year basis. However, it also anticipates some unit decline from retailer merchandising decisions and continued inventory productivity initiatives actions.
Price Performance
Shares of Scotts Miracle-Gro have moved up 3.8% in the past three months compared with the industry’s 4.3% rise.
Zacks Rank & Stocks to Consider
Scotts Miracle-Gro currently carries a Zacks Rank #3 (Hold).
Methanex has expected long-term earnings growth rate of 15%. Its shares have rallied 28.1% in the past year.
CF Industries has expected long-term earnings growth rate of 6%. Its shares have gained 44% in a year.
Domtar has expected long-term earnings growth rate of 5%. Its shares have moved up 8% in the past year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Scotts Miracle-Gro (SMG) Q4 Earnings and Sales Lag Estimates
The Scotts Miracle-Gro Company (SMG - Free Report) recorded net loss from continuing operations of $130.6 million or $2.36 per share in fourth-quarter fiscal 2018 (ended Sep 30, 2018), wider than a loss of $42.3 million or 72 cents in the year-ago quarter.
Barring one-time items, adjusted loss came in at 75 cents per share in the quarter, which was wider than the Zacks Consensus Estimate of a loss of 67 cents.
Sales rose roughly 15% year over year to $433.9 million. However, the figure trailed the Zacks Consensus Estimate of $442.6 million.
Company-wide adjusted gross margin rate declined to 19.2% from 23.4% a year ago. The company recorded a non-cash impairment of $94.6 million associated with goodwill in the Hawthorne segment. Moreover, it recorded a charge of $20 million in discontinued operations for a litigation matter related to wild bird food business, which was previously divested.
FY18 Results
Adjusted net income for the fiscal 2018 fell roughly 11% year over year to $211.6 million or $3.71 per share, while net sales rose roughly 1% to $2,663.4 million.
Scotts Miracle-Gro Company (The) Price, Consensus and EPS Surprise
Scotts Miracle-Gro Company (The) Price, Consensus and EPS Surprise | Scotts Miracle-Gro Company (The) Quote
Segment Review
In the fiscal fourth quarter, sales in the U.S. Consumer division fell roughly 2% year over year to $252.6 million, mainly due to focused inventory productivity efforts with specific major retail accounts. The segment swung to profit of $5.3 million from a loss of $0.3 million a year ago.
Sales in the Hawthorne segment jumped around 65% to $152.2 million in the quarter, which was mainly driven by acquisitions. The segment’s profitability declined 94% year over year to $0.5 million.
Sales in the company’s Other segment rose 9% to $29.1 million. The segment swung to a profit of $0.7 million in the quarter against a loss of $0.9 million a year ago.
Balance Sheet
As of Sep 30, Scotts Miracle-Gro had cash and cash equivalents of $33.9 million, down around 71.9% year over year. Long-term debt was $1,883.8 million, up roughly 49.7%.
Outlook
The company provided guidance for fiscal 2019. Adjusted earnings per share (EPS) are forecast in the band of $4.10-$4.30.
It expects sales to grow 10-11%, assuming U.S. Consumer segment will grow 1-2% and the balance from the Hawthorne segment. Within the Hawthorne segment, acquisitions are projected to contribute 8% on a company-wide basis.
Additionally, the company expects pricing to add 3% to the U.S. Consumer unit on a full-year basis. However, it also anticipates some unit decline from retailer merchandising decisions and continued inventory productivity initiatives actions.
Price Performance
Shares of Scotts Miracle-Gro have moved up 3.8% in the past three months compared with the industry’s 4.3% rise.
Zacks Rank & Stocks to Consider
Scotts Miracle-Gro currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the basic materials space are Methanex Corporation (MEOH - Free Report) , CF Industries Holdings, Inc. (CF - Free Report) and Domtar Corporation , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Methanex has expected long-term earnings growth rate of 15%. Its shares have rallied 28.1% in the past year.
CF Industries has expected long-term earnings growth rate of 6%. Its shares have gained 44% in a year.
Domtar has expected long-term earnings growth rate of 5%. Its shares have moved up 8% in the past year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>