Scotts Miracle-Gro Inc., Marysville, Ohio, on June 1 announced increased sales and earnings guidance for fiscal 2021 based on the continued strength of both its U.S. Consumer and Hawthorne segments.
For the fiscal year ending Sept. 30, 2021, Scotts now expects company-wide sales growth of 17-19 percent. The revision is due mainly to stronger growth in the U.S. Consumer segment, where the company now expects sales growth of 7-9 percent, compared with its previous range of 4-6 percent.
Hawthorne sales also continue to exceed expectations, as the company now expects sales growth of 40-45 percent for the full year, compared with previous guidance of 30-40 percent growth.
Adjusted non-GAAP earnings are expected to be in a range of $9.00-$9.30 per share, versus previous guidance of $8.60-$9.00 per share.
“The level of engagement we’re seeing in our U.S. Consumer segment continues to exceed expectations, with consumer purchases up 10 percent entering June,” said Jim Hagedorn, Chairman and CEO. “Consumer purchases, in units, are up more than 20 percent year-to-date as retailers have resumed a higher level of promotional activity compared with last season.
“While consumer purchases declined in dollars during May, as we expected, it was still the third highest on record for a single month, surpassed only by what we experienced last May and this April,” Hagedorn continued. “In fact, so far this season we have experienced four weeks in which consumer purchases exceeded $160 million. Prior to last year, we had never recorded a single week of consumer purchases at that level.
“Gardening activity continues to be the largest driver of growth with strong consumer engagement in all parts of the U.S. and in all retail channels,” he added. “We also continue to see year-over-year improvement in both our lawns and pest control categories.
“The investments we’ve made to retain the new consumers who entered the category last season are working, which gives us confidence to continue to invest throughout the balance of fiscal 2021 with a goal of once again bringing these new gardeners back to the category next season,” he said.
“We also intend to increase our investment behind the Hawthorne business for the balance of the year, as sales and operating margin continue to exceed our expectations. Sales volume at Hawthorne continues to improve even in the face of difficult year-over-year comparisons as we not only benefit from the growth of the overall marketplace, but also from the unique competitive advantages we have worked so hard to establish,” Hagedorn concluded.
“While commodity prices remain sharply higher than a year ago, we remain focused on ensuring the pricing that will take effect in August will offset commodity pressures as we prepare for next season,” said Cory Miller, Senior Vice president and Interim CFO. “We remain prepared to be more aggressive on our pricing decisions, if needed, to stay ahead of those costs.”