Cannabis & Hemp Stocks Investment Tools – Schedule Demo Now!


ScottsMiracle-Gro Announces Record Q3 Financial Results — Company announces acquisition to bolster the Hawthorne portfolio

  • Company-wide third quarter sales increase 8% driven by Hawthorne growth of 48%
  • U.S. Consumer sales decline 4% in Q3; Remain 19% higher year-to-date
  • Consumer POS dollars up 4% entering August driven by POS unit growth of 8%
  • Q3 GAAP EPS increases 12% to $4.00; Non-GAAP adjusted EPS up 5% to $3.98
  • HydroLogic acquisition will add approximately $20 million in sales

MARYSVILLE, Ohio, Aug. 04, 2021 (GLOBE NEWSWIRE) — The Scotts Miracle-Gro Company (NYSE: SMG), the world’s leading marketer of branded consumer lawn and garden as well as indoor and hydroponic growing products, today announced company-wide third quarter sales growth of 8 percent driven by a 48 percent increase in the Hawthorne segment.

Best Hemp Stocks 2021

Related: ScottsMiracle-Gro Announces Record Second Quarter Results

The Company reaffirmed its full-year guidance for its U.S. Consumer and Hawthorne segments as well as its outlook for adjusted earnings per share.

Separately, the Company announced a further strengthening of the Hawthorne Gardening Company portfolio with the acquisition of HydroLogic Purification Systems, a leading provider of products, accessories and systems for water filtration and purification. HydroLogic will add approximately $20 million in annualized sales.

Related: Marijuana Stock Pick Scotts Miracle-Gro: A Strong Buy and Hold

“Our results in the third quarter continue to speak to the strength of our brands and the execution of our strategy,” said Jim Hagedorn, chairman and chief executive officer. “Despite difficult year-over-year comparisons, we saw record Q3 sales at Hawthorne with growth in all categories. Our U.S. Consumer business continued to excel despite a modest decline in sales compared with last year’s record levels.

Best Hemp Stocks 2021

“Even in the face of increasing distribution and commodity costs that are putting pressure on our gross margin rate, we remain on track to deliver the updated full-year guidance we provided in early June, which would result in both record sales and adjusted earnings.”

Related: Curaleaf to Report Second Quarter 2021 Financial Results

Third quarter details
For the period ended July 3, 2021, company-wide sales increased 8 percent to $1.61 billion. U.S. Consumer segment sales declined 4 percent to $1.05 billion from $1.09 billion. Hawthorne segment sales increased 48 percent to $421.9 million compared with $285.7 million. Due to the Company’s fiscal calendar, the third quarter of 2021 began six days later than the third quarter of fiscal 2020, and those six days fell during the peak lawn and garden selling season. The impact of the shift was a decline in sales for the quarter of approximately $115 million on a company-wide basis.

Related: Organigram to Report Third Quarter Fiscal 2021 Results

Segment income decreased 16 percent for U.S. Consumer to $264.4 million and improved 37 percent for Hawthorne to $51.9 million.

“Hawthorne saw growth in every product category and every major geographic market,” Hagedorn said. “We continue to enjoy tremendous success, especially with our signature brands, as growers see the benefit of our innovation and full-service approach. North America lighting continues to be a strong driver of growth with sales up 77 percent in the quarter. Nutrient sales increased 54 percent, and growing media improved 33 percent. More importantly, our brands – Gavita, General Hydroponics, Mother Earth and Botanicare – significantly outperformed our distributed brands in each of their respective categories.

Best Hemp Stocks 2021

Related: Tilray Reports 2021 Fiscal Year and Q4 Results

“In the U.S. Consumer business, consumer purchases of our products, as measured in dollars, declined 1 percent in the quarter but remain up 4 percent on a year-to-date basis. As measured in units, which aligns more closely with our sales and is a more accurate reflection this year of consumer engagement, POS was up 5 percent in the quarter and is up 8 percent year-to-date.”

For the quarter, the company-wide GAAP and non-GAAP adjusted gross margin rates were 30.7 percent and 30.8 percent, respectively. Both compare to 35.3 and 36.1 percent, respectively, in the prior year. The declines were due primarily to higher distribution and commodity costs as well as segment mix due to the growth in the lower-margin Hawthorne segment. Those pressures were partially offset by higher pricing.

SG&A decreased 18 percent to $194.1 million primarily due to lower accruals for annual incentive compensation payments.

Interest expense increased $1.6 million on a year-over-year basis to $21.9 million, driven by an increase in borrowings. The Company said its debt-to-EBITDA ratio at the end of the quarter was approximately 2.19 times.

GAAP income from continuing operations was $229.8 million, or $4.00 per diluted share, compared with $204.3 million, or $3.57 per diluted share, in the prior year. Non-GAAP adjusted earnings, which exclude impairment, restructuring and other non-recurring items, were $228.6 million, or $3.98 per diluted share, compared with $216.8 million, or $3.80 per diluted share.

Year-to-date details
Company-wide sales for the first nine months increased 29 percent to $4.19 billion compared with $3.24 billion a year ago. Sales in the U.S. Consumer segment increased 19 percent, to $2.83 billion. Hawthorne sales increased 60 percent to $1.10 billion.

The GAAP gross margin rate on a year-to-date basis was 32.1 percent. The non-GAAP adjusted rate was 32.6 percent. These compare with 34.9 and 35.4 percent, respectively, last year. The reasons for the year-to-date decline are consistent with the factors that drove third quarter results with the added benefit of improved fixed cost leverage. SG&A was $582.3 million, a 5 percent increase from 2020, driven primarily by higher investment in both U.S. Consumer and Hawthorne offset by lower year-to-date accruals for variable compensation.

Interest expense decreased $5.7 million to $57.3 million due to lower average interest rates, partially offset by an increase in borrowings.

GAAP income from continuing operations was $566.0, or $9.90 per diluted share, compared with $382.8 million, or $6.74 per diluted share, in the prior year. Non-GAAP adjusted earnings, which exclude impairment, restructuring and other non-recurring items, were $573.1 million, or $10.04 per share, compared with $408.2 million, or $7.20 per diluted share.

Full-year outlook
The Company maintained its guidance of 17 to 19 percent sales growth with the U.S. Consumer segment expected to grow 7 to 9 percent in fiscal 2021 and Hawthorne sales expected to increase 40 to 45 percent. Guidance for non-GAAP adjusted earnings per share was also reaffirmed in a range of $9.00 to $9.30. The gross margin rate is now expected to decline 250 to 275 basis points, with SG&A expected to be flat to slightly down on a full-year basis.

“The continued pressure from commodity prices is likely to result in a lower gross margin rate than we expected when we last updated our guidance in June,” said Cory Miller, senior vice president and interim chief financial officer. “However, we’re finding offsets to that pressure that are allowing us to maintain our earnings guidance on a full-year basis.”

Acquisition of HydroLogic
HydroLogic Purification Systems, based in Santa Cruz, Calif., is a leading provider of products, accessories and systems for water filtration and purification in the cannabis industry. HydroLogic will expand the Hawthorne signature brand portfolio with water filtration and purification products. Commercial growers comprise approximately half of HydroLogic sales and typically require custom builds for their water purification and filtration needs.

Under the terms of the deal, Hawthorne will acquire the business assets and operations of HydroLogic for $65 million. Hawthorne intends to retain the Santa Cruz facility, which includes distribution and assembly.

“This is a small but strategic acquisition that strengthens our portfolio of signature brands and our relationship with commercial growers,” Hagedorn said. “We continue to pursue an active pipeline of M&A opportunities for both Hawthorne and our U.S. Consumer business and are optimistic we’ll have other transactions to announce in the months ahead.”

ScottsMiracle-Gro Announces Record Q3 Financial Results

Conference Call and Webcast Scheduled for 9 a.m. ET Today, August 4
The Company will discuss results during a webcast and conference call today at 9:00 a.m. ET. To participate in the conference call, please call 1-866-337-5532 (Confirmation Code: 2106695).  A replay of the call can be heard by calling 1-888-203-1112.  The replay will be available for 15 days. A live webcast of the call and the press release will be available on the Company’s investor relations website at http://investor.scotts.com.  An archive of the press release and any accompanying information will remain available for at least a 12-month period.

ScottsMiracle-Gro Announces Record Q3 Financial Results

About ScottsMiracle-Gro
With approximately $4.1 billion in sales, the Company is one of the world’s largest marketers of branded consumer products for lawn and garden care. The Company’s brands are among the most recognized in the industry. The Company’s Scotts®, Miracle-Gro® and Ortho® brands are market-leading in their categories. The Company’s wholly owned subsidiary, The Hawthorne Gardening Company, is a leading provider of nutrients, lighting and other materials used in the indoor and hydroponic growing segment. For additional information, visit us at www.scottsmiraclegro.com.

ScottsMiracle-Gro Announces Record Q3 Financial Results

Cautionary Note Regarding Forward-Looking Statements 
Statements contained in this press release, other than statements of historical fact, which address activities, events and developments that the Company expects or anticipates will or may occur in the future, including, but not limited to, information regarding the future economic performance and financial condition of the Company, the plans and objectives of the Company’s management, and the Company’s assumptions regarding such performance and plans are “forward-looking statements” within the meaning of the U.S. federal securities laws that are subject to risks and uncertainties. These forward-looking statements generally can be identified as statements that include phrases such as “guidance,” “outlook,” “projected,” “believe,” “target,” “predict,” “estimate,” “forecast,” “strategy,” “may,” “goal,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “likely,” “will,” “should” or other similar words or phrases. Actual results could differ materially from the forward-looking information in this release due to a variety of factors, including, but not limited to:

  • The ongoing COVID-19 pandemic could have a material adverse effect on the Company’s business, results of operation, financial condition and/or cash flows;
  • Compliance with environmental and other public health regulations or changes in such regulations or regulatory enforcement priorities could increase the Company’s costs of doing business or limit the Company’s ability to market all of its products;
  • Damage to the Company’s reputation or the reputation of its products or products it markets on behalf of third parties could have an adverse effect on its business;
  • If the Company underestimates or overestimates demand for its products and does not maintain appropriate inventory levels, its net sales and/or working capital could be negatively impacted;
  • If the Company is unable to effectively execute its e-commerce business, its reputation and operating results may be harmed;
  • Because of the concentration of the Company’s sales to a small number of retail customers, the loss of one or more of, or significant reduction in orders from, its top customers could adversely affect the Company’s financial results;
  • Climate change and unfavorable weather conditions could adversely impact financial results;
  • Certain of the Company’s products may be purchased for use in new or emerging industries or segments and/or be subject to varying, inconsistent, and rapidly changing laws, regulations, administrative practices, enforcement approaches, judicial interpretations and consumer perceptions;
  • The Company’s operations may be impaired if its information technology systems fail to perform adequately or if it is the subject of a data breach or cyber-attack;
  • The Company may not be able to adequately protect its intellectual property and other proprietary rights that are material to the Company’s business;
  • In the event the Third Restated Marketing Agreement for consumer Roundup products terminates, or Monsanto’s consumer Roundup business materially declines the Company would lose a substantial source of future earnings and overhead expense absorption;
  • Hagedorn Partnership, L.P. beneficially owns approximately 25% of the Company’s common shares and can significantly influence decisions that require the approval of shareholders;
  • Acquisitions, other strategic alliances and investments could result in operating difficulties, dilution and other harmful consequences that may adversely impact the Company’s business and results of operations.

Additional detailed information concerning a number of the important factors that could cause actual results to differ materially from the forward-looking information contained in this release is readily available in the Company’s publicly filed quarterly, annual and other reports. The Company disclaims any obligation to update developments of these risk factors or to announce publicly any revision to any of the forward-looking statements contained in this release, or to make corrections to reflect future events or developments.

Contact:
Jim King
Executive Vice President
Investor Relations & Corporate Affairs
(937) 578-5622

ScottsMiracle-Gro Announces Record Q3 Financial Results


About Cannin.com: Your Marijuana Stocks Resource

Cannin is your #1 resource for marijuana stocks. Our global team of experts evaluates all emerging marijuana stock investing opportunities. We aggregate hundreds of hours of research and provide tips on the best marijuana stock investments for 2021. 

Use Cannin as your resource for:

Is it too late to invest in marijuana stocks? No! This is the perfect time to invest.

Many market analysts expect the legal marijuana industry will have an annual value exceeding $75 Billion in the next decade. The time to invest in marijuana stocks is now. 

Are you interested in marijuana stocks like Curaleaf, Trulieve, Aurora Cannabis, or Charlotte’s Web,?

Are you looking to buy stock in marijuana companies for 2021? Interested in emerging penny marijuana stocks? Looking for the best Canadian marijuana stocks to invest in? We can help.

Predict price movements of marijuana stocks several hours in advance with our proprietary algorithmic stock trading software.

  • +30% Gains in 2020
  • +49.8% Gains in 2019
  • 108% Backtested since 2012

We’re so confident you’ll love our algotrading marijuana stock signals, we’re willing to give you a one-month risk-free trial to see it for yourself.

Profit from the best marijuana stocks – we’ll show you how at cannin.com.