The 10-second takeaway
For the quarter ended March 31 (Q2), Scotts Miracle-Gro missed estimates on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased and GAAP earnings per share contracted significantly.
Margins shrank across the board.
Scotts Miracle-Gro reported revenue of $1.17 billion. The 10 analysts polled by S&P Capital IQ expected revenue of $1.20 billion on the same basis. GAAP reported sales were 3.9% higher than the prior-year quarter's $1.13 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $2.15. The 12 earnings estimates compiled by S&P Capital IQ forecast $2.06 per share. GAAP EPS of $2.05 for Q2 were 22% lower than the prior-year quarter's $2.63 per share. (The prior-year quarter included $0.43 per share in earnings from discontinued operations.)
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 39.4%, 160 basis points worse than the prior-year quarter. Operating margin was 18.6%, 310 basis points worse than the prior-year quarter. Net margin was 10.8%, 490 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $1.19 billion. On the bottom line, the average EPS estimate is $2.33.
Next year's average estimate for revenue is $3.06 billion. The average EPS estimate is $2.87.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 221 members out of 251 rating the stock outperform, and 30 members rating it underperform. Among 89 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 83 give Scotts Miracle-Gro a green thumbs-up, and six give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Scotts Miracle-Gro is hold, with an average price target of $49.20.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. 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 Motley Fool has a disclosure policy.