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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.
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