ScottsMiracle-Gro announces record fourth quarter and full year results

The Scotts Miracle-Gro Company released record fiscal fourth quarter and full year financial results that were driven by the continued strength of both its U.S. Consumer and Hawthorne reporting segments.

The company also established guidance for fiscal 2021 that assumes company-wide sales growth of 0 to 5 percent and expected non-GAAP adjusted earnings growth of 10 to 16 percent.

For the year ended September 30, 2020, company-wide sales increased 31 percent to a record $4.13 billion, compared with $3.16 billion a year earlier. GAAP earnings from continuing operations were $6.78 per diluted share, compared with $7.77 per share in the prior year. Non-GAAP adjusted earnings, which are the basis of the company’s guidance and exclude impairment, restructuring, and other one-time items, were $7.24 per share compared with $4.47 per share a year ago.

“The momentum we enjoyed throughout fiscal 2020 accelerated further in the fourth quarter and is carrying into the first quarter of fiscal 2021 as well,” said Jim Hagedorn, chairman and chief executive officer. “The 90 percent fourth quarter increase in our U.S. Consumer segment was driven by continued strong consumer demand and support from our retailers who were replenishing inventory levels in anticipation of continued strength. The growth in Hawthorne also continued to gain steam as September was our highest sales month ever.

“The guidance we are establishing for fiscal 2021 assumes both segments will report strong growth in the first half of the year but face difficult year-over-year comparisons from May through September. Frankly, it’s too early to accurately gauge what may happen next spring and summer and, so, we are taking a prudent approach in establishing this outlook. We currently expect to deliver adjusted earnings per share in a range of $8.00 to $8.40 in fiscal 2021, which would mark yet another year of double-digit earnings growth.”

Separately, the company announced it has signed a non-binding letter-of-intent to acquire a 50 percent equity stake in the Bonnie Plants business. The proposed transaction would be structured as a 50/50 joint venture with Alabama Farmers Cooperative, Inc., the current owner of Bonnie Plants. The proposed deal remains subject to antitrust clearance, due diligence and negotiation of definitive agreements and is expected to close around the end of the calendar year. While the impact of the proposed transaction is expected to be accretive to earnings in fiscal 2021, it is not contemplated in the company’s current guidance. Financial terms are not being disclosed at this time.

The proposed transaction would replace an existing relationship that gives ScottsMiracle-Gro a 25 percent financial interest in Bonnie Plants based on financing ScottsMiracle-Gro provided in 2016. As part of the proposed transaction, ScottsMiracle-Gro also would relinquish its previously negotiated option to become the majority owner of Bonnie Plants.

“There is no gardening without plants, which makes live goods the engine that drives this industry,” Hagedorn said. “We are especially enthusiastic about edible gardening, a category that has been growing for years and resonates especially well with millennial consumers. Our relationship with Bonnie Plants over the past five years has been beneficial to both parties and we look forward to working together to take the edible gardening category to new heights.”

Click here to see all the results as shared by the company.

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