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Wednesday, July 31, 2019

-=Scotts Miracle-Gro (SMG) reported earnings on Wed 31 July 2019 (b/o)

 Scotts Miracle-Gro beats by $0.37, beats on revs; guides FY19 EPS above consensus, revs above consensus

  • Reports Q3 (Jun) earnings of $3.11 per share, excluding non-recurring items, $0.37 better thanthe S&P Capital IQ Consensus of $2.74; revenues rose 17.7% year/year to $1.17 bln vs the $1.07 bln S&P Capital IQ Consensus.
  • Co issues upside guidancefor FY19, sees EPS of $4.35-4.50, excluding non-recurring items, vs. $4.35 S&P Capital IQ Consensus; sees FY19 revenue growth of +16-17%, which we compute as $3.09-3.12 bln vs. $3.02 bln S&P Capital IQ Consensus.
  • "The strong recovery we have seen in Hawthorne this year is being led by increased sales of lighting and nutrients products, our largest and most important categories...We're also pleased with the 15% growth we've seen year-to-date in California and the strong growth we're seeing in emerging markets like Florida, Ohio, Michigan and Massachusetts, where changes to state laws regarding cannabis cultivation are starting to drive higher sales. "
  • Monsanto has agreed to purchase from SMG four Roundup-branded product lines outside the non-selective weed control category, as well as the right to use the Roundup brand (previously licensed to Scotts by Monsanto) on those and future product lines outside the non-selective weed control category, for $112 mln. SMG will act as marketing agent for these brand extension product lines and the cos will equally share future profits, which are expected to be approx $15 mln in FY19.
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