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Scotts Miracle-Gro anticipates lower Q2 net leverage ratio

EditorEmilio Ghigini
Published 04/04/2024, 07:35 AM
Updated 04/04/2024, 07:35 AM

MARYSVILLE, Ohio - The Scotts Miracle-Gro Company (NYSE: NYSE:SMG), a leading marketer of lawn and garden products, announced today that it anticipates its second-quarter net leverage ratio to be approximately 7 times adjusted EBITDA. This figure is expected to fall below the company’s first-quarter net leverage ratio and the maximum ratio of 7.75 times set for the second quarter.

Chairman, CEO, and President Jim Hagedorn expressed confidence in the company's financial and operational improvements, stating that the net leverage ratio will not only be below the second-quarter maximum but also less critical moving forward due to manageable debt reduction and covenant compliance.

Hagedorn highlighted that the company had almost reached record retail shipments and that year-to-date point-of-sale units are trending towards a mid-teens percentage growth compared to the previous year. He also noted the company's strong retail partnerships and the execution by their teams.

Additionally, Scotts Miracle-Gro's free cash flow in the first half of the year exceeded expectations, supporting the company's target of $1 billion in free cash flow for fiscal years 2023 and 2024.

A detailed report on the company’s second-quarter earnings will be released on May 1. Scotts Miracle-Gro, with annual sales of approximately $3.6 billion, is known for its well-recognized brands such as Scotts®, Miracle-Gro®, and Ortho®. The Hawthorne Gardening Company, a wholly-owned subsidiary, serves the indoor and hydroponic growing segment with nutrients, lighting, and other materials.

This financial update is based on a press release statement from The Scotts Miracle-Gro Company.

InvestingPro Insights

As The Scotts Miracle-Gro Company (NYSE: SMG) prepares to release its second-quarter earnings report on May 1st, a closer look at the company's financials through InvestingPro reveals a mixed bag of metrics and strategic insights. The company's market capitalization stands at $4.22 billion, reflecting its significant presence in the lawn and garden market. Despite a challenging environment, Scotts Miracle-Gro's commitment to maintaining dividend payments for 20 consecutive years remains unshaken, with a current dividend yield of 3.55%.

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InvestingPro Tips suggest that while the company has not been profitable over the last twelve months, net income is expected to grow this year. Analysts have also revised their earnings upwards for the upcoming period, indicating a potential turnaround in profitability. Moreover, the valuation implies a strong free cash flow yield, aligning with the company's reported expectations of exceeding $1 billion in free cash flow for fiscal years 2023 and 2024.

InvestingPro Data points out that the company is trading near its 52-week high, with the price at 95.02% of this peak. This could be indicative of investor confidence in the company's future prospects, bolstered by the fact that the stock has seen a strong return over the last month (13.05%) and three months (23.0%). These performance metrics may be of interest to current and potential investors monitoring the company's trajectory.

For those seeking further insights and additional InvestingPro Tips on Scotts Miracle-Gro, there are 14 more tips available, which can help in making more informed investment decisions. To access these tips and detailed analytics, visit https://www.investing.com/pro/SMG and remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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