The Scotts Miracle-Gro Company SMG reported a second-quarter fiscal 2024 (ended Mar 30, 2024) profit of $157.5 million or $2.74 per share, roughly 44% higher than $109.4 million or $1.94 per share in the prior-year quarter.
Barring one-time items, the adjusted earnings were $3.69 per share compared with $3.78 a year ago, topping the Zacks Consensus Estimate of $3.35.
The company’s net sales in the fiscal second quarter were $1,525.4 million, which beat the Zacks Consensus Estimate of $1,498.3 million. Net sales decreased around 0.4% year over year, primarily due to lower sales in the Hawthorne segment partly resulting from the weakness in the hydroponic industry.
The Scotts Miracle-Gro Company Price, Consensus and EPS Surprise
The Scotts Miracle-Gro Company price-consensus-eps-surprise-chart | The Scotts Miracle-Gro Company Quote
Segment Highlights
In the fiscal second quarter, net sales in the U.S. Consumer division were up 2% year over year to $1,379.8 million, beating our estimate of $1,300 million. The segment recorded a profit of $385.7 million, down 3% year over year.
Net sales in the Hawthorne segment tumbled 28% year over year to $66.4 million in the reported quarter, missing our estimate of $94.5 million. The segment reported a loss of $3.4 million. The figure was narrower than the year-ago loss of $16.8 million.
Net sales in the other segment fell 3% year over year to $79.2 million, missing our estimate of $89.6 million. The segment reported a profit of $6.4 million, down 56%.
Financials
At the end of the fiscal second quarter, SMG had cash and cash equivalents of $65.1 million, up around 160.4% year over year. Long-term debt decreased roughly 12% to $2,760.5 million.
Outlook
The company reiterates its non-GAAP fiscal 2024 guidance. Its key goal remains to generate $575 million in adjusted EBITDA and $560 million in free cash flow to restore a healthy balance sheet with significant improvements in leverage and working capital.
Price Performance
SMG’s shares are down 2.8% over a year compared with an 18.1% fall recorded by its industry.
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Zacks Rank & Key Picks
SMG currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth a look in the basic materials space include Gold Fields Limited GFI, sporting a Zacks Rank #1 (Strong Buy), and L.B. Foster Company FSTR and American Vanguard Corporation AVD, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GFI’s first-quarter earnings is pegged at 22 cents per share. The figure has been stable in the past 60 days.
L.B. Foster is slated to report first-quarter results on May 7. The consensus estimate for FSTR’s first-quarter earnings is pegged at a loss of 16 cents per share. The company’s shares have rallied 114.7% in the past year.
American Vanguard is expected to report first-quarter results on May 14. The consensus estimate for AVD’s first-quarter earnings is pegged at 8 cents per share, indicating a year-over-year rise of 14.3%.
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