- Company-wide third quarter sales decreased 26% driven by Hawthorne decline of 63% and U.S. Consumer decline of 14%
- Consumer POS climbed in May & June; year-to-date POS dollars are down 5%
- Q3 GAAP EPS loss of $8.01 per share, includes pre-tax impairment and restructuring charges of $724 million; non-GAAP adjusted EPS of $1.98
- ScottsMiracle-Gro announces Project Springboard to strengthen the balance sheet, expand margins and improve free cash flow
- Management lowered its full-year sales guidance for U.S. Consumers to down 8 to 9 percent and full-year EPS to $4.00 to $4.20
The Scotts Miracle-Gro Company (NYSE: SMG) announced in a press release its results for the third quarter ended July 2, 2022.
Sales for the period declined by 26 percent reflecting decreases in both major business segments. The Company reported a GAAP net loss per share of $8.01, which includes pre-tax impairment and restructuring charges of $724.2 million. Non-GAAP adjusted earnings per share, which is the basis of the Company’s guidance, was $1.98.
Separately, the Company announced Project Springboard, a cross-functional initiative to expand margins, improve cash flow, and strengthen the balance sheet to provide a solid foundation for sustainable shareholder value creation.
“Behind a complicated story this quarter, we were pleased to see consumer engagement build as the weather improved and the season progressed,” said Jim Hagedorn, chairman, and chief executive officer. “While consumer purchases are down 8 percent in units year-to-date, that performance is in line with the guidance we laid out at the beginning of the year. We are extremely encouraged that consumer purchases in May and June were at near-record levels, once again showing the resiliency of the category. Unfortunately, shipments to our retailer partners did not keep pace with consumer demand, as retailers in all channels took steps to lower their own inventory levels.
“The lower-than-expected sales in our U.S. Consumer segment, combined with continued pressure on Hawthorne sales due to oversupply issues in the cannabis industry, leave us unsatisfied with our financial results and with higher leverage than we want to maintain. That is why we have launched the business transformation effort we are calling Project Springboard, which includes a series of aggressive steps to return the business to an appropriate level of performance.
“The outcome of Project Springboard will lead to a set of detailed financial and incentive-related targets to ensure we are making substantive progress and holding ourselves accountable. We are committed to getting the business back on the right track, returning to an appropriate level of profitability in both segments.”