Scotts Miracle-Gro Q1 Loss Widens But Beats Estimates

(RTTNews) - The Scotts Miracle-Gro Company (SMG), a marketer of branded consumer lawn and garden as well as indoor and hydroponic growing products, on Wednesday showed an increase in loss for its fiscal first quarter ended December 31, 2022. Lower revenues and higher non-recurring charges impacted the quarter's results. Earnings and revenue however surpassed consensus estimates.

Net loss for the quarter was $64.7 million or $1.17 per share as compared to $50 million or $0.90 per share in the year-ago period.

Adjusted net loss excluding pre-tax impairment, restructuring and other non-recurring charges for the quarter was $56.4 million or $1.02 per share as compared to $48.6 million or $0.88 per share in the year-ago period. The adjustments amounted to $18.7 million in the current quarter and $1.8 million in the prior-year quarter.

Eight analysts polled by Thomson Reuters were expecting the company to report loss of $1.32 per share. Analysts typically exclude one-time items.

Total sales declined 7 percent in the quarter to $526.7 million, from $566 million in the year-ago quarter. 7 analysts polled by Thomson Reuters were expecting the company to report revenues of $501.02 million.

U.S. Consumer segment sales increased 8 percent to $369.0 million from $342.4 million last year. Hawthorne segment sales decreased 31 percent to $131.5 million, compared with $190.6 million during the same period a year ago, reflecting the continued challenges in the hydroponic industry.

Project Springboard has contributed to a 17 percent reduction in SG&A, to $128.5 million from $154.1 million a year ago.

Interest expense increased $18.9 million year over year to $42.7 million, driven by an increase in average borrowings and higher interest rates.

The company updated its outlook for fiscal 2023 as compared to fiscal 2022, reflecting a low single-digit decline in total company net sales amidst a 20 to 30 percent decline in Hawthorne segment net sales. The company however expects low single-digit percentage growth in adjusted operating income as well as adjusted EBITDA.

Shares of The Scotts Miracle-Gro Company are currently trading in pre-market at $73.89, up $1.70 or 2.35 percent from the previous close.