Why Scotts Miracle-Gro Shares Plunged

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Scotts Miracle-Gro (NYSE: SMG  ) sank 10% on Wednesday after the lawn- and garden-care specialist said it would fall short of its full-year guidance.

So what: Scotts Miracle-Gro usually benefits from the peak gardening season in mid to late May, but slowing sales momentum at its biggest U.S. retail partners reinforces fears over a declining trend for lawn and garden care. Additionally, poor weather and economic uncertainty continues to weigh on the company's European business, giving investors little hope for a near-term turnaround.  

Now what: As a result of the weak year-to-date demand, management expects to fall short of its previous outlook of 6% to 8% sales growth and adjusted EPS of $2.65 to $2.85. "While we remain confident in the long-term growth opportunities in our business, it is clear that near-term category growth has become harder to achieve," Chairman and CEO Jim Hagedorn said. Of course, with the stock down roughly 30% over just the past couple of months and currently sporting a 3%-plus dividend yield, now might be an opportune time to buy into that long-term optimism.  

Interested in more info on Scotts Miracle-Gro? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Scotts Miracle-Gro. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1911405, ~/Articles/ArticleHandler.aspx, 9/19/2014 2:07:06 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement