Scotts Miracle-Gro's stock posts biggest one-day gain in 15 years after narrower-than-expected loss
By Ciara Linnane
Stock posts 21% gain, the biggest in a day since it added 29% on Aug. 1, 2008
Scotts Miracle-Gro Co.'s stock soared 21% Wednesday, chalking up its biggest one-day gain since Aug. 1, 2008, after the latest earnings from the maker of consumer lawn-care and outdoor hydroponic products were less bad than feared.
The company (SMG) has been cutting costs in an effort to turn its business around after two straight quarters of losses amid high inventories and low demand for its products. It has also been hit by a rise in interest costs on its debt and a weak performance by its cannabis unit, Hawthorne.
On a call with analysts, Chief Executive Jim Hagedorn acknowledged some of the company's challenges -- and missteps.
"Some were macro in nature, brought on by post-COVID economy and unfavorable weather, but many were our own doing as we pursued growth. I know this has been a lot for our stakeholders and our associates to deal with," he said, according to a FactSet transcript.
The company posted a net loss of $468.4 million, or $8.33 a share, for the quarter, after a loss of $220.1 million, or $3.97 a share, in the year-earlier period.
Excluding one-time items, the company had a loss of $2.77 a share, better than the $2.88 loss consensus of FactSet analysts.
Sales fell 24% to $374.5 million but were ahead of the $332 million FactSet consensus.
"The outcome of fiscal '23 is stabilization of the business and a return to a more normal state of operating," Hagedorn said in a statement.
The company said it expects high-single-digit percentage growth in its U.S. consumer business in fiscal 2024.
Truist analysts called the results "irrelevant."
"It was a disappointing year and the season is largely over by July," analysts led by Bill Chappell said in a note to clients.
Truist has a buy rating on the stock, which has gained 11% in the year to date, while the S&P 500 SPX has gained 9.7%.
-Ciara Linnane
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11-01-23 1426ET
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