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Scotts Miracle-Gro -7% after larger than expected loss, downside guidance

Nov. 07, 2018 8:55 AM ETThe Scotts Miracle-Gro Company (SMG) StockSMGBy: Carl Surran, SA News Editor9 Comments
  • Scotts Miracle-Gro (NYSE:SMG) -6.9% pre-market after posting a larger than expected FQ4 loss, missing revenue estimates and offering disappointing full-year guidance.
  • SMG says Q4 sales in its U.S. consumer segment fell 2% Y/Y to $252.6M, due primarily to focused inventory productivity efforts with certain key retail accounts; the segment recorded a $5.3M profit vs. a slight loss in the year-ago quarter.
  • Hawthorne sales totaled $152.2M, up 65% Y/Y, but sales fell 15% excluding acquisitions, due to declines in the North American hydroponic business; the segment reported a $500K profit in the quarter vs. a $9M a year earlier.
  • For FY 2019, SMG forecasts EPS of $4.10-$4.30 vs. $4.31 analyst consensus estimate, with revenues rising 10%-11% to $2.93B-$2.96B vs. $2.97 consensus; guidance assumes 1%-2% growth in its U.S. consumer segment and ~9% growth from Hawthorne.
  • CFO Randy Coleman says SMG expects "some unit decline from retailer merchandising decisions and continued inventory productivity initiatives. Additionally, the contractual changes in our Roundup marketing agreement will result in a ~100 basis point decline to sales in this segment on a full-year basis."

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