The Scotts Miracle-Gro Company
SMG
reported net income from continuing operations of $4.2 million or 7 cents per share in fourth-quarter fiscal 2020 (ended Sep 30, 2020) against a net loss of $55.5 million or 99 cents per share in the year-ago quarter.
Barring one-time items, adjusted earnings per share (EPS) were 6 cents, up 106.6% year over year. However, the figure missed the Zacks Consensus Estimate of 7 cents.
Net sales surged 78.9% year over year to $890.3 million and beat the consensus mark of $884.6 million.
Company-wide gross margin rate (as adjusted) was 24.3% compared with 18.5% in the year-ago quarter.
FY20 Results
Adjusted earnings for fiscal 2020 surged 62% year over year to $7.24 per share, while net sales increased 31% to $4,131.6 million.
The Scotts MiracleGro Company Price, Consensus and EPS Surprise
The Scotts MiracleGro Company price-consensus-eps-surprise-chart
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The Scotts MiracleGro Company Quote
Segment Details
In the fiscal fourth quarter, net sales in the U.S. Consumer division increased 90% year over year to $497.2 million. The segment reported profits of $44.1 million against a net loss of $20.7 million in the prior-year quarter.
Net sales in the Hawthorne segment rose 68% year over year to $351.9 million in the reported quarter. The segment’s profits surged 81% year over year to $39.6 million.
Per the company, growth in the U.S. Consumer and Hawthorne segments was witnessed across all product categories, geographies and retail channels.
Net sales in the Other segment increased 58% year over year to $41.2 million. The segment reported a net loss of $3.2 million in the quarter compared with $2.6 million in the prior-year quarter.
Balance Sheet
At the end of fiscal 2020, the company had cash and cash equivalents of $16.6 million, down 11.7% year over year. Long-term debt was $1,455.1 million, down 4.5% year over year.
Outlook
In the U.S. Consumer unit, the company projects sales to be flat-to-down 5% for fiscal 2021. It expects sales in the Hawthorne segment to rise 15-20% in fiscal 2021.
Based on these assumptions, the company projects adjusted earnings per share between $8 and $8.40. Free cash flow is expected to be around $325 million.
The company expects results for the U.S Consumer and Hawthorne segments in the first half of fiscal 2021 to trend above its full-year view, which is expected to be partly offset by a challenging second half of the year.
Price Performance
Shares of Scotts Miracle-Gro have rallied 57.1% in the past year against the
industry
’s 10.5% decline.
Zacks Rank & Other Key Picks
Scotts Miracle-Gro currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the basic materials space are
Agnico Eagle Mines Limited
AEM
,
Barrick Gold Corporation
GOLD
and
B2Gold Corp
BTG
. While Agnico Eagle sports a Zacks Rank #1 (Strong Buy), Barrick and B2Gold carry a Zacks Rank #2. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Agnico Eagle has an expected earnings growth rate of 100% for 2020. Its shares have returned 34.1% in the past year.
Barrick has an expected earnings growth rate of 100% for 2020. The company’s shares have surged 62.9% in the past year.
B2Gold has an expected earnings growth rate of 250% for 2020. The company’s shares have gained 77.1% in the past year.
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