Why Scotts Miracle-Gro Stock Is Wilting Today
Last month, lawn and garden care giant Scotts Miracle-Gro (NYSE: SMG) announced record fiscal second-quarter sales in its U.S. consumer segment. But today the company said that while consumer transactions of its core lawn and garden brands surged in May, the product mix has forced the company to reset expectations for the fiscal year. The news caused the stock to tank as much as 12% today. Scotts Miracle-Gro shares were still lower by 10% as of 1:13 p.m. ET.
Management said its sales for fiscal 2022 won't meet previously announced projections for matching 2021 levels, "due primarily to above average declines in lawn fertilizer and grass seed, which command higher prices and margins but also tend to be more susceptible to poor spring weather."
The month of May helped Scotts close the gap in point-of-sales (POS) data versus the prior-year period. By the end of May, the year-over-year drop in POS was 6% in absolute dollars and 9% in units. But prior to the May results, those declines were double those levels. The improvement came thanks to strong results in all of its major markets in the Midwest and Northeast.
Source Fool.com
