Scotts Miracle-Gro CEO lays into cannabis unit over quarterly results: ‘Those bastards are gun-shy as s--- right now’
- Scotts Miracle-Gro CEO Jim Hagedorn bluntly laid out his take on the company's cannabis-growing business during a curse-laden rant on a conference call.
- The unit, Hawthorne Gardening, isn't going to meet Scotts' internal targets for growth for the foreseeable future, though Hagedorn didn't disclose how far short of the target the unit was now.
- "And, dude, those bastards are gun-shy as s--- right now, OK," Hagedorn told analysts on the call.
Scotts Miracle-Gro CEO Jim Hagedorn bluntly laid out his take on the company's cannabis-growing business during a curse-laden rant on a conference call.
He said his frustration was about disappointing financial expectations for Hawthorne Gardening, Scotts' cannabis subsidiary, which is in the process of acquiring Sunlight Supply. Hawthorne isn't going to meet Scotts' internal targets for growth for the foreseeable future, though Hagedorn didn't disclose how far short of the target the unit was now.
"Let me kind of tell you, like, the journey a little bit for me, and it's real time," he told analysts on Tuesday's call. "Hawthorne's on their own long-term plan and they're clearly off their first year."
Then Hagedorn let loose, saying Hawthorne was not showing him "like, where you're going."
"And, dude, those bastards are gun-shy as s--- right now, OK," Hagedorn told analysts on the call. "I'm just telling you real-time, living my life. What do you expect they're going to throw back at us? So they throw these numbers back at us, and I was like, what the hell?"
In April, Scotts set a goal of $120 million of segment income for Hawthorne by 2020. Scotts CFO Randy Coleman told investors on the call that Scotts no longer expects Hawthorne to achieve that goal. And it won't combine Hawthorn's results with Sunlight's until "we provide guidance for 2019."
Scotts announced in April it would acquire Sunlight Supply, intending to combine it with Hawthorne in an effort to build its cannabis-grower business. Hagedorn said Wall Street analysts should "bear with" Scotts as "we're working on" achieving the "synergy" it promised with the acquisition.
Hawthorne's lack of clarity is not good enough for Hagedorn, however.
"When people ask me what do you think about those numbers that came back from Hawthorne, I said 'it's a f---ing negotiation' – sorry for the language. It's a f---ing negotiation and they're gun-shy at the moment," Hagedorn. "Do not over-commit. Our credibility matters."
"I get where our stock price is at. OK? I'm not all freaky on it," Hagedorn added.
Scotts shares fell 3.5 percent in trading Wednesday after the call. They are down more than 28 percent this year.
It's not the first time Hagedorn drew attention for foul language. In a 2013 article in The Wall Street Journal about the merger between Miracle-Gro, which was led by his father, and lawn-care company Scotts, Hagedorn was quoted as saying: "The idea to merge with Scotts dawned on him after he looked at the company's market value in 1995, he said, so he called his father's tax lawyer to vet the idea. "I said, 'Bob, I got this f— crazy idea. Do you think it'd be f— possible to take over Scotts?'" he recalls, sitting in the Port Washington, New York, office that his father once occupied."
Hagedorn later apologized and said it wouldn't happen again.
WATCH: Acreage Holdings plans for Canadian IPO
— CNBC's Marty Steinberg contributed to this story