By Christiana Sciaudone
Investing.com - American lawns never saw so much love. Scotts Miracle-Gro Company (NYSE:SMG) rallied after reporting strong growth, a bump in guidance, and a special dividend.
The marketer of branded consumer lawn and garden as well as indoor and hydroponic growing products said its U.S. Consumer and Hawthorne segments led to 28% company-wide sales growth to $1.49 billion and a 22% improvement in non-GAAP adjusted earnings in the fiscal third quarter.
The company increased its guidance for full-year sales, adjusted earnings, and free cash flow as a result of the performance.
Shares have more than doubled since March and hit a new 52-week high on Wednesday. The stock has two buy ratings, two holds and no sells, according to analysts tracked by Investing.com. Shares traded up 12% on Wednesday.
The board of directors approved payment of a special dividend of $5 per share and increased its regular quarterly dividend by 7%, to 62 cents per share.
“As we enter the final weeks of fiscal 2020 and prepare for the start of our next fiscal year, we remain optimistic about the strength of our business as well as our ability to continue to enhance shareholder value,” said Jim Hagedorn, chairman and chief executive officer. The company will also make special one-time payments to nearly 3,000 associates.
“Consumer purchases entering August are up 23% at our largest four retail partners and we’ve seen increases in every product category,” Hagedorn said. “We also continued to see strong third quarter growth at Hawthorne in every product category and geography.”
The company’s newly revised sales guidance of 26% to 28% growth assumes the U.S. Consumer segment grows 20% to 22% in fiscal 2020 and Hawthorne sales increase 55% to 60%. That compares to expectations set in June of U.S. Consumer sales up 9% to11% and Hawthorne up 45% to 50%.
Scotts revised guidance for non-GAAP adjusted earnings per share of $6.65 to $6.85, which compares with the June forecast of $5.65 to $5.85 per share.
“The growth we saw in June and July clearly exceeded our expectations as we have seen unprecedented levels of consumer engagement later in the summer than normal,” said Randy Coleman, executive vice president and chief financial officer.