ScottsMiracle-Gro updates fiscal ’24 guidance at peak of lawn and garden season
June 06 2024 - 7:00AM
The Scotts Miracle-Gro Company (NYSE: SMG), the world’s leading
marketer of branded consumer lawn and garden as well as indoor and
hydroponic growing products, today updated its guidance for fiscal
year 2024 based on financial results through the end of May, which
reflects the peak of its Q3 lawn and garden season.
The Company announced that it now projects
non-GAAP adjusted EBITDA in the range of $530 to $540 million,
approximately a 20-percent year-over-year improvement, and U.S.
Consumer segment sales growth of 5 to 7 percent. This compares with
its earlier guidance of $575 million in non-GAAP adjusted EBITDA
and high single-digit U.S. Consumer sales growth. Additionally, the
Company reaffirmed that it expects to complete its free cash flow
target of $1 billion over two years by delivering the remainder of
$560 million in fiscal 2024, meet or exceed its goal of paying down
an additional $350 million in debt and drive full-year non-GAAP
gross margin improvement of at least 250 basis points. As for
Hawthorne, the Company reaffirmed its previously stated guidance
that the segment’s non-GAAP adjusted EBITDA will be break-even or
better by year end.
“Despite the season not meeting our operating
plan for topline sales and adjusted EBITDA, we are seeing
year-over-year growth and feel good about our overall performance,”
said Jim Hagedorn, chairman, CEO and president. “We are driving
improvement in the most critical financial metrics that strengthen
our ability to deliver long-term shareholder returns. By tightly
managing expenses and free cash flow, we remain on track to achieve
our debt reduction goal while making important investments in our
brands, marketing and other value drivers. We have strengthened our
financial flexibility to ensure we have the proper resources to
manage POS and retailer replenishment through the summer and
fall.”
The Company also reaffirmed that the Project
Springboard cost-saving initiative will deliver run-rate annualized
savings of at least $300 million by the end of fiscal 2024 along
with incremental investments in media and innovation.
“Our decisive actions are contributing to sales
growth, strong free cash flow generation and significantly improved
year-over-year adjusted EBITDA, putting us in position to exit 2024
with leverage below 5 times,” said Matt Garth, chief financial and
administrative officer. “As we progress through the balance of our
fiscal year, we will tightly manage costs while making improvements
in both operational efficiency and balance sheet flexibility to
ensure a solid foundation for further growth in fiscal 2025 and
beyond.”
The Company will provide more commentary today
when it participates in the William Blair 44th Annual Growth Stock
Conference in Chicago at 9 a.m. ET. Investors and other interested
parties may listen to a live webcast of the presentation from the
events page of the Company’s investor relations website. An archive
of the webcast will be available on the website for at least 90
days.
About ScottsMiracle-GroWith approximately $3.6
billion in sales, the Company is the world’s largest marketer of
branded consumer products for lawn and garden care. The Company’s
brands are among the most recognized in the industry. The Company’s
Scotts®, Miracle-Gro®, and Ortho® brands are market-leading in
their categories. The Company’s wholly-owned subsidiary, The
Hawthorne Gardening Company, is a leading provider of nutrients,
lighting, and other materials used in the indoor and hydroponic
growing segment. For additional information, visit us at
www.scottsmiraclegro.com.
Cautionary Note Regarding Forward-Looking
Statements Statements contained in this press release,
other than statements of historical fact, which address activities,
events and developments that the Company expects or anticipates
will or may occur in the future, including, but not limited to,
information regarding the future economic performance and financial
condition of the Company, the plans and objectives of the Company’s
management, and the Company’s assumptions regarding such
performance and plans are “forward-looking statements” within the
meaning of the U.S. federal securities laws that are subject to
risks and uncertainties. These forward-looking statements generally
can be identified as statements that include phrases such as
“guidance,” “outlook,” “projected,” “believe,” “target,” “predict,”
“estimate,” “forecast,” “strategy,” “may,” “goal,” “expect,”
“anticipate,” “intend,” “plan,” “foresee,” “likely,” “will,”
“should” or other similar words or phrases. Actual results could
differ materially from the forward-looking information in this
release due to a variety of factors, including, but not limited
to:
- An economic downturn and economic
uncertainty may adversely affect demand for the Company’s
products;
- If the Company underestimates or overestimates demand for its
products and does not maintain appropriate inventory levels, its
net sales and/or working capital could be negatively impacted;
- The Company’s operations, financial condition or reputation,
may be impaired if its information technology systems fail to
perform adequately or if it is the subject of a data breach or
cyber-attack;
- Climate change and unfavorable weather conditions could
adversely impact financial results;
- Our success depends upon the retention and availability of key
personnel and the effective succession of senior management;
- Our workforce reductions may cause undesirable consequences and
our results of operations may be harmed;
- Disruptions in availability or increases in the prices of raw
materials, fuel or transportation costs could adversely affect our
results of operations;
- A significant interruption in the operation of the Company’s or
its suppliers’ facilities could impact the Company’s capacity to
produce products and service its customers, which could adversely
affect the Company’s revenues and earnings;
- Acquisitions, other strategic alliances and investments could
result in operating difficulties, dilution and other harmful
consequences that may adversely impact the Company’s business and
results of operations;
- Compliance with environmental and other public health
regulations or changes in such regulations or regulatory
enforcement priorities could increase our costs of doing business
or limit our ability to market all of our products;
- Because of the concentration of the Company’s sales to a small
number of retail customers, the loss of one or more of, or
significant reduction in orders from, its top customers, or a
material reduction in the inventory of the Company’s products that
they carry, could adversely affect the Company’s financial
results;
- The Company’s indebtedness could limit its flexibility and
adversely affect its financial condition;
- The Company’s decision to maintain, reduce or discontinue
paying cash dividends to its shareholders or repurchasing its
Common Shares could cause the market price for its common shares to
decline;
- If the perception of the Company’s brands or organizational
reputation are damaged, its customers, distributors and retailers
may react negatively, which could materially and adversely affect
the Company’s business, financial condition and results of
operations;
- In the event the Third Restated Marketing Agreement for
consumer Roundup products terminates, or Monsanto’s consumer
Roundup business materially declines the Company would lose a
substantial source of future earnings and overhead expense
absorption; and
- Hagedorn Partnership, L.P.
beneficially owns approximately 24% of the Company’s common shares
and can significantly influence decisions that require the approval
of shareholders.
Additional detailed information concerning a number of the
important factors that could cause actual results to differ
materially from the forward-looking information contained in this
release is readily available in the Company’s publicly filed
quarterly, annual and other reports. The Company disclaims any
obligation to update developments of these risk factors or to
announce publicly any revision to any of the forward-looking
statements contained in this release, or to make corrections to
reflect future events or developments.
For investor
inquiries:Aimee DeLucaSr. Vice President, Investor
Relations aimee.deluca@scotts.com(937) 578-5621
For media
inquiries:Tom MatthewsChief Communications
Officer tom.matthews@scotts.com(937) 644-7044
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