Lawn and garden care company Scotts Miracle-Gro (SMG 0.89%) released its earnings for the second quarter of 2024 on May 1, showcasing a robust performance. The company reported non-GAAP adjusted earnings per share (EPS) of $3.69, surpassing the analyst prediction of $3.44. Meanwhile, total sales hit $1.53 billion, exceeding the consensus revenue forecast of $1.497 billion. Below is the data in more detail.
| Metric | Q2 2024 Results | Analyst Estimates | Q2 2023 Results | Change (YOY) |
|---|---|---|---|---|
| EPS (adjusted, diluted) | $3.69 | $3.44 | $3.78 | -2.38% |
| Revenue (in billions) | $1.525 | $1.497 | $1.531 | -0.07% |
| U.S. consumer segment sales (in billions) | $1.38 | N/A | $1.36 | 1.5% |
| Hawthorne segment sales (in millions) | $66.4 | N/A | $92.7 | -28.4% |
| Gross margin | 30.4% | N/A | 26.9% | N/A |
Understanding Scotts Miracle-Gro
Scotts Miracle-Gro has carved out a significant space in the minds and yards of lawn and garden enthusiasts worldwide. At its core, the company specializes in a broad range of lawn care, garden products, and hydroponic gardening supplies through its Hawthorne segment.
The company's strength lies in its brand portfolio, which includes household names like Scotts, Miracle-Gro, and Ortho. The company continues to make substantial investments in R&D, and has entered into strategic partnerships that expand its distribution network. Key to its success has been understanding the consumer.
NYSE: SMG
Key Data Points
Quarterly highlights
Second-quarter performance shined overall. The U.S. consumer segment recorded a modest 2% rise in net sales, driven by early seasonal promotions and enhanced product listings. However, the much smaller Hawthorne gardening business suffered a 28% sales drop as a result of shifting its brand portfolio toward proprietary names and moving away from third-party distributors.
Financially, Scotts ended the quarter on a strong footing with gross margins expanding -- both in GAAP and non-GAAP terms. The company remains focused on margin improvements, reducing debt, and sustaining growth. The company also reaffirmed its fiscal 2024 guidance, aiming to generate $575 million in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) and free cash flow of $560 million.
Looking forward
Management remains cautiously optimistic, standing firm on its full-year guidance. Key goals include sustaining revenue growth in the U.S. consumer segment, stabilizing the Hawthorne segment, continuing to improving margins, and reducing debt. Investors will want to watch evolving market trends to see how Scotts Miracle-Gro adapts in the period ahead.
