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Scotts (SMG) Down 5.6% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Scotts Miracle-Gro (SMG - Free Report) . Shares have lost about 5.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Scotts due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Scotts Miracle-Gro’s Q3 Earnings Top, Sales Lag Estimates
Scotts Miracle-Gro reported a third-quarter fiscal 2024 (ended Jun 29, 2024) profit of $132.1 million or $2.28 per share compared with a profit of $43.7 million or 77 cents per share in the year-ago quarter.
Barring one-time items, the adjusted earnings were $2.31 per share, up from $1.17 a year ago. The figure surpassed the Zacks Consensus Estimate of $1.89.
Net sales increased around 7.5% year over year to $1,202.2 million but missed the consensus mark of $1,203.6 million.
Segment Details
In the fiscal third quarter, net sales in the U.S. Consumer division were up 11% year over year to $1,017.5 million. It was lower than our estimate of $1,083.2 million. The segment delivered a profit of $210.3 million, up 69% year over year.
Net sales in the Hawthorne segment tumbled 28% year over year to $67.7 million in the reported quarter. The figure was lower than our estimate of $94.7 million. The segment reported a profit of $3.8 million, up 144% year over year.
Net sales in the other segment increased 7% year over year to $117 million. The segment reported a profit of $11.7 million, up 102%.
Balance Sheet
At the end of the quarter, the company had cash and cash equivalents of $279.9 million, up from $27.4 million a year ago. Long-term debt was $2,436.4 million, down around 7.3%.
Outlook
Scotts Miracle-Gro reiterated its adjusted fiscal 2024 guidance issued in June, with the exception of Hawthorne net sales, which are now expected to be 35-40% lower than the previous year due to progress exiting lower margin distributed brands and a projected decline in its professional horticulture lighting business. The segment continues to anticipate break-even or improved adjusted EBITDA for the full year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -21.74% due to these changes.
VGM Scores
Currently, Scotts has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Scotts has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Scotts (SMG) Down 5.6% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Scotts Miracle-Gro (SMG - Free Report) . Shares have lost about 5.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Scotts due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Scotts Miracle-Gro’s Q3 Earnings Top, Sales Lag Estimates
Scotts Miracle-Gro reported a third-quarter fiscal 2024 (ended Jun 29, 2024) profit of $132.1 million or $2.28 per share compared with a profit of $43.7 million or 77 cents per share in the year-ago quarter.
Barring one-time items, the adjusted earnings were $2.31 per share, up from $1.17 a year ago. The figure surpassed the Zacks Consensus Estimate of $1.89.
Net sales increased around 7.5% year over year to $1,202.2 million but missed the consensus mark of $1,203.6 million.
Segment Details
In the fiscal third quarter, net sales in the U.S. Consumer division were up 11% year over year to $1,017.5 million. It was lower than our estimate of $1,083.2 million. The segment delivered a profit of $210.3 million, up 69% year over year.
Net sales in the Hawthorne segment tumbled 28% year over year to $67.7 million in the reported quarter. The figure was lower than our estimate of $94.7 million. The segment reported a profit of $3.8 million, up 144% year over year.
Net sales in the other segment increased 7% year over year to $117 million. The segment reported a profit of $11.7 million, up 102%.
Balance Sheet
At the end of the quarter, the company had cash and cash equivalents of $279.9 million, up from $27.4 million a year ago. Long-term debt was $2,436.4 million, down around 7.3%.
Outlook
Scotts Miracle-Gro reiterated its adjusted fiscal 2024 guidance issued in June, with the exception of Hawthorne net sales, which are now expected to be 35-40% lower than the previous year due to progress exiting lower margin distributed brands and a projected decline in its professional horticulture lighting business. The segment continues to anticipate break-even or improved adjusted EBITDA for the full year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -21.74% due to these changes.
VGM Scores
Currently, Scotts has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Scotts has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.