The Scotts Miracle-Gro Company (NYSE:SMG) posted net loss from continuing operations of $55.5 million or 99 cents per share in fourth-quarter fiscal 2019 (ended Sep 30, 2019), narrower than loss of $130.6 million or $2.36 per share in the year-ago quarter.
Barring one-time items, adjusted loss per share was 91 cents, wider than loss of 75 cents a year ago. The figure was also wider than the Zacks Consensus Estimate of loss of 87 cents per share.
Net sales rose around 15% year over year to $497.7 million. The figure surpassed the consensus mark of $451 million.
Company-wide gross margin rate rose to 18% from 17% in the year-ago quarter.
Fiscal 2019 Results
Adjusted net income for fiscal 2019 rose roughly 19% year over year to $251.8 million or $4.47 per share, while net sales rose roughly 18% to $3,156 million.
The Scotts Miracle-Gro Company Price, Consensus and EPS Surprise
The Scotts Miracle-Gro Company price-consensus-eps-surprise-chart | The Scotts Miracle-Gro Company Quote
Segment Details
In the fiscal fourth quarter, net sales in the U.S. Consumer division rose roughly 4% year over year to $261.6 million. The segment generated loss of $20.7 million against net profit of $5.3 million in the year-ago quarter.
Net sales in the Hawthorne segment rose nearly 38% to $210 million in the quarter, which was primarily driven by strong demand across the United States. The segment’s profit grew to $21.9 million from $0.5 million a year ago.
Net sales in the Other segment fell 10% to $26.1 million. The segment generated loss of $2.6 million against net profit of $0.7 million in the year-ago quarter.
Balance Sheet
At the end of fiscal 2019, the company had cash and cash equivalents of $18.8 million, down 44.5% year over year. Long-term debt was $1,523.5 million, down 19.2%.
Outlook
Scotts Miracle-Gro expects company-wide sales growth of 4-6% for fiscal 2020. Moreover, the company anticipates Hawthorne’s sales to grow 12-15% and U.S. Consumer sales to rise 1-3%.
It expects adjusted earnings per share of $4.95-$5.15 for fiscal 2020.
Free cash flow is expected to be $300 million.
Price Performance
Shares of the company have rallied 32.6% in the past year against the industry’s 21.6% decline.
Zacks Rank & Other Stocks to Consider
Scotts Miracle-Gro currently carries a Zacks Rank #2 (Buy).
Other top-ranked stocks in the basic materials space are Kinross Gold Corporation (NYSE:KGC) , Franco-Nevada Corporation (TSX:FNV) and Agnico Eagle Mines Limited (NYSE:AEM) , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kinross has an expected earnings growth rate of 210% for 2019. The company’s shares have surged 80.9% in the past year.
Franco-Nevada has a projected earnings growth rate of 39.3% for 2019. The company’s shares have rallied 48.2% in a year.
Agnico Eagle has an estimated earnings growth rate of 168.6% for the current year. Its shares have moved up 67.6% in the past year.
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Franco-Nevada Corporation (FNV): Free Stock Analysis Report
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The Scotts Miracle-Gro Company (SMG): Free Stock Analysis Report
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