Scotts Miracle-Gro Beats Up on Analysts Yet Again

Seth Jayson, The Motley Fool
Updated

Scotts Miracle-Gro (NYS: SMG) reported earnings on Feb. 7. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q1), Scotts Miracle-Gro beat expectations on revenues and exceeded expectations on earnings per share.

Compared to the prior-year quarter, revenue shrank and GAAP loss per share grew.

Margins dropped across the board.

Revenue details
Scotts Miracle-Gro reported revenue of $211.2 million. The 10 analysts polled by S&P Capital IQ expected sales of $205.5 million. Sales were 8.3% lower than the prior-year quarter's $230.2 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at -$1.18. The 10 earnings estimates compiled by S&P Capital IQ anticipated -$1.22 per share on the same basis. GAAP EPS were -$1.21 for Q1 versus -$1.02 per share for the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 11.7%, 960 basis points worse than the prior-year quarter. Operating margin was -47.4%, 630 basis points worse than the prior-year quarter. Net margin was -35.0%, 550 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.20 billion. On the bottom line, the average EPS estimate is $2.14.

Next year's average estimate for revenue is $3.03 billion. The average EPS estimate is $2.77.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 209 members out of 241 rating the stock outperform, and 32 members rating it underperform. Among 99 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 90 give Scotts Miracle-Gro a green thumbs-up, and nine 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 $47.40.

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At the time thisarticle was published 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 ofMotley 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.

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