Marysville, Ohio — Scotts Miracle-Gro Co. expects a 6 percent increase in sales growth for its fiscal year ending Oct. 31, 2012, despite a slow start from its first quarter ending Dec. 31, 2011. As it expected, first-quarter earnings, which are traditionally in the loss column, grew this year to $73.9 million ($1.21 per diluted share) on sales of $211.2 million from the year-ago loss of $67.9 million ($1.02 per share) on sales of $230.2 million. Scotts said the decline was expected as it worked with its retail partners to move shipments closer to the start of the lawn and garden season and away from the first quarter. Since Jan. 1, Scotts said sales are up more than 20 percent overall, with strong increases in Texas and Florida, two important early season markets. The company told analysts that in the southern markets fertilizer movement is positive, and it expects the same thing as the season moves south to north. Scotts plans to spend $40 million more on advertising this year than last. It also expects that major customer Walmart will be supporting its lawn and garden business more this year. Scotts said that it has now locked in 90 percent of its urea requirement for the year, and 70 percent of commodity costs overall. The company committed to new urea business when prices weakened in December. Scotts expects commodity inflation to be within its earlier estimated increase of $80 million. Scotts does expect its margins to be under pressure this year as it does not plan on passing on its increases in commodity costs. It expects competitors to also resist increasing prices, with a greater impact on their margins. After a bad weather year last year, Scotts is upbeat that 2012 will be a normal weather year.
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