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Scotts Miracle-Gro's Q3 2017 Earnings Breakdown

August 2, 2017


On August 1st, Scotts Miracle-Gro (NYSE:SMG) released the company’s financial results for their fiscal third quarter ended July 1st, 2017. Here's some of the highlights: 


  • Company-wide net sales in the third quarter of 2017 were $1.08 billion, up 8% from the third quarter of last year. Excluding the impact of foreign exchange rates, company wide net sales rose 9% compared to the third quarter of 2016. The increase in net sales can be attributed to acquisitions and solid sales growth in their both their U.S. consumer business, and their hydroponics-focused (read: cannabis-focused) division, Hawthorne Gardening.

  • Sales in the company’s largest segment, their U.S. consumer business increased 5% to $792.2 million from $756.7 million in Q3’16.

  • European consumer sales fell 3% versus the third quarter of last year to $93.2 million in Q3’17. When the impact of foreign exchange rates is taken into account, sales increased 2%.

  • Sales in the “other” segment rose 36% from the third quarter of last year to $192.6 million. This increase can be attributed to acquisition and growth activity in The Hawthorne Gardening Company.

  • GAAP and adjusted gross margin percentage for Q3'17 was 38.5% versus 36.0% a year ago. This increase in gross margin can be attributed to product mix (meaning the company sold greater quantities of higher margin products compared to products with lower margins), lower commodity prices and lower "trade program expenses". 

  • Scott's leverage ratio (how much the company has borrowed, compared to how much "cash" income they have to make interest and principal payments on debt) at the end of the quarter was 3.0 times debt-to-EBITDA

  • GAAP earnings per diluted share were $2.53 in Q3'17 compared to $2.06 per share in the third quarter of last year. 

  • The company now expects to complete the pending sale of its European and Australian businesses in the fourth quarter and expects to lower its full-year adjusted EPS guidance by approximately $0.20 per share upon closing of the sale. 

  • Scotts' is also "optimistic" that the company will generate more than $300 million in operating cash flow in fiscal year 2017.


Market Reaction 


Shares of Scotts Miracle-Gro closed trading on the day of the announcement down 2.33%, after giving back gains and turning negative early in the day. Year-to-date, SMG is down roughly 2%. Don't let the small losses fool you into thinking its been a quite year at Scotts. Following the company's worse than expected Q2 earnings release, shares plunged. That said, shares recovered the bulk of those losses on improved guidance that came out in June. 




Learn more about Scotts Miracle-Gro and check out a custom stock charts by visiting the company's marijuana stock profile in our global marijuana stock database


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