雅虎香港財經 Scotts (SMG) Down 2.5% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Scotts Miracle-Gro (SMG). Shares have lost about 2.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Scotts due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Scotts Miracle-Gro Q2 Earnings & Sales Top Estimates
Scotts Miracle-Gro reported a second-quarter fiscal 2024 (ended Mar 30, 2024) profit of $157.5 million or $2.74 per share, roughly 44% higher than $109.4 million or $1.94 per share in the prior-year quarter.
Barring one-time items, the adjusted earnings were $3.69 per share compared with $3.78 a year ago, topping the Zacks Consensus Estimate of $3.35.
The company’s net sales in the fiscal second quarter were $1,525.4 million, which beat the Zacks Consensus Estimate of $1,498.3 million. Net sales decreased around 0.4% year over year, primarily due to lower sales in the Hawthorne segment partly resulting from the weakness in the hydroponic industry.
Segment Highlights
In the fiscal second quarter, net sales in the U.S. Consumer division were up 2% year over year to $1,379.8 million, beating our estimate of $1,300 million. The segment recorded a profit of $385.7 million, down 3% year over year.
Net sales in the Hawthorne segment tumbled 28% year over year to $66.4 million in the reported quarter, missing our estimate of $94.5 million. The segment reported a loss of $3.4 million. The figure was narrower than the year-ago loss of $16.8 million.
Net sales in the other segment fell 3% year over year to $79.2 million, missing our estimate of $89.6 million. The segment reported a profit of $6.4 million, down 56%.
Financials
At the end of the fiscal second quarter, the company had cash and cash equivalents of $65.1 million, up around 160.4% year over year. Long-term debt decreased roughly 12% to $2,760.5 million.
Outlook
The company reiterated its adjusted fiscal 2024 guidance. Its key goal remains to generate $575 million in adjusted EBITDA and $560 million in free cash flow to restore a healthy balance sheet with significant improvements in leverage and working capital.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -8.69% due to these changes.
VGM Scores
Currently, Scotts has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Scotts has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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The Scotts Miracle-Gro Company (SMG) : Free Stock Analysis Report
