MARYSVILLE, Ohio, June 13, 2017 (GLOBE NEWSWIRE) -- The Scotts Miracle-Gro Company (NYSE:SMG), the world’s leading marketer of branded consumer lawn and garden products, today updated its financial outlook for fiscal 2017, lowering its full year guidance due to an anticipated shortfall in sales.
The Company now expects sales in its U.S. Consumer segment to be slightly down from last year, leading to expected company-wide sales growth of 3 to 4 percent, compared with the previous guidance of 6 to 7 percent sales growth. Management said it now expects adjusted earnings for the year to range from $4.00 to $4.20 per share compared to an original range of $4.10 to $4.30 per share.
“Despite the challenging weather that has plagued the Midwest and Northeast nearly all spring, consumer purchases of our products were up slightly at home center, hardware and gardening stores entering June,” said Jim Hagedorn, chairman and chief executive officer. “However, performance at mass retail is down more than 10 percent from last year due to changes in merchandising strategies and tighter inventory management.
“While we still have 30 percent of the season in front of us, it’s become clear that we’ll fall short of our original plans on both the top and bottom line. The contingency plans we’ve put in place will help partially offset the sales shortfall we’ve seen thus far, but we are unwilling to cut too deeply if the impact begins to affect our planning for next season.”
Hagedorn said momentum in the Company’s Hawthorne Gardening business remains strong with sales up 17 percent on a year-over-year basis entering June.
The Company also said it has increased its share repurchase activity in recent weeks and expects to repurchase $250 to $275 million of its shares on a full-year basis. Additionally, the completion in recent weeks of two small acquisitions – one in Hawthorne and another in the core business – is expected to be immediately accretive to earnings, adding $0.05 to $0.07 to earnings per share on an annualized basis.
“The issues causing pressure this season in no way impact our confidence in the strength of our business and long-term opportunities to drive shareholder value,” Hagedorn said. “We continue to make outstanding progress at reconfiguring our portfolio, improving our operating margins and improving free cash flow in order to provide increased flexibility that drives incremental growth and returns cash to shareholders.”
Company management will provide a strategic update and elaborate on its expected fiscal 2017 results today, June 13, at 8:30 a.m. eastern time at the William Blair Growth Conference in Chicago. A live webcast of those remarks will be available at http://investor.scotts.com
The Scotts Miracle-Gro Company is the world's largest marketer of branded consumer products for lawn and garden care. The Company's brands are the most recognized in the industry. In the U.S., the Company's Scotts®, Miracle-Gro® and Ortho® brands are market-leading in their categories, as is the consumer Roundup® brand, which is marketed near worldwide by Scotts and owned by Monsanto. In the U.S., we maintain a minority interest in TruGreen®, the largest residential lawn care service business, and in Bonnie Plants®, the largest marketer of edible gardening plants in retail channels. In Europe, the Company's brands include Weedol®, Pathclear®, Evergreen®, Levington®, Miracle-Gro®, KB®, Fertiligène® and Substral®. For additional information, visit us at www.scottsmiraclegro.com
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:
- 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;
- Certain of our products may be purchased for use in new and 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.
- Disruptions in availability or increases in the prices of raw materials and fuel costs could adversely affect the Company’s results of operations;
- The highly competitive nature of the Company’s markets could adversely affect its ability to maintain or grow revenues;
- 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;
- The Company’s international operations make the Company susceptible to the costs and risks associated with operating internationally;
- 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 of termination of the Marketing Agreement for consumer Roundup products, the Company would lose a substantial source of future earnings and overhead expense absorption;
- Hagedorn Partnership, L.P. beneficially owns approximately 26% of the Company’s common shares and can significantly influence decisions that require the approval of shareholders;
- The Company may pursue acquisitions, other strategic alliances, and investments that could result in operating difficulties, dilution, and other harmful consequences that may adversely impact our 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 Senior Vice President Investor Relations & Corporate Affairs (937) 578-5622
Source:The Scotts Miracle-Gro Company