Scotts Miracle-Gro Company (NYSE:SMG) saw sales jump in its fiscal first quarter, despite posting a loss, which fell short of the Street’s estimates and stemmed from the seasonal nature of the lawn and garden business.
For the quarter ended December 29, the maker of products for lawn and garden care, posted an adjusted loss of $1.39, which missed the loss of $1.25 per share analysts had expected and widened from its loss of $1.08 in the year-ago quarter.
But the Marysville, Ohio-based company pointed out that it reports a loss each year during its first-quarter, when it is hit by a slowdown in demand for its fertilizer and other lawn products.
The widening of its net loss was also attributed to operating items that are expected to reverse later in the year as well as a lower effective tax rate, which has a negative impact in a quarter where a loss is posted.
The bright spot was its sales, which came in at $298.1 million, which was 35% higher than the $221.5 million posted a year earlier. Sales for its subsidiary The Hawthorne Gardening Company, a provider of nutrients and lighting used for hydroponic growing, advanced 84% to $140.8 million, driven by its acquisition last year of the hydroponics product producer Sunlight Supply, which greatly expanded Scotts' reach in the marijuana cultivation industry.
“The recent performance at Hawthorne is also encouraging as we began to see a return to growth in the US hydroponics business in the second half of the first quarter, a trend that has continued in January,” said Jim Hagedorn, CEO of Scotts Miracle-Gro in a statement. “The integration of the Sunlight acquisition also remains on track, including the expected cost savings.”
The company’s selling, general and administrative expenses jumped 7% year-over-year to $116.3 million due partly to its acquisition of Sunlight Supply.
Its net loss came to $79.7 million in the quarter, deepening from $21.2 million in the year-ago quarter.
Scotts Miracle-Gro makes and sells DIY products for lawns and gardens in North America, Europe and Asia. Its offerings include consumer fertilizers, plant foods, mulches, pest controls, grass seed and bird food.
Scotts Miracle-Gro shares slipped 0.18% to $69.84 in pre-market trade on Wednesday.
Contact Ellen Kelleher at [email protected]