Scotts Miracle-Gro stock drops sharply after cannabis grow equipment Hawthorne unit weighs on profit

Scotts Miracle-Gro Co. (SMG) stock was down 16% in premarket trades on Wednesday after it missed Wall Street's profit and revenue targets due to weaker-than-expected results in its core lawn products business and a 40% decline at its Hawthorne unit, which sells equipment for growing pot. Scotts Miracle-Gro swung to a third-quarter profit of $43.7 million, or 77 cents a share, after reporting a year-ago loss of $443.9 million, or $8.01 a share. Adjusted earnings fell to $1.17 a share from $1.98 a share and missed the analyst target of $1.46 a share, according to FactSet data. Revenue dropped 6% to $1.12 billion, below the analyst expectation of $1.15 billion. The company said it has a "line of sight to profitability" in its Hawthorne unit.

-Steve Gelsi

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08-02-23 0848ET

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