Scotts Miracle-Gro announced that company-wide sales increased 35 percent in its fiscal first quarter driven by acquisitions in the Hawthorne segment as well as strong performance in the U.S. Consumer business.
For the quarter ended December 29, 2018, GAAP loss from continuing operations was $1.49 per share compared with $0.35 per share in fiscal 2018 when the company recognized a one-time net tax benefit of $42 million related to 2018 federal tax reform. The non-GAAP adjusted loss in the first quarter was $1.39 per share compared with $1.08 last year. The year-over-year non-GAAP decline was largely due to operating items expected to reverse later in the year as well as otherwise positive non-operating items – notably a lower effective tax rate and share count – which have a negative impact in a loss quarter. Due to the seasonal nature of the lawn and garden category, Scotts Miracle-Gro reports a loss each year during its first quarter. The company’s full year EPS guidance is based on anticipated adjusted non-GAAP results.
“Our operating results are in line with what we expected and, more importantly, we are extremely encouraged with the level of engagement we are seeing from our largest retail partners as we prepare for the 2019 lawn and garden season,” said Jim Hagedorn, chairman and chief executive officer. “The combination of strong retailer support, game-changing innovation with products like Miracle-Gro Performance Organics and Ortho GroundClear, and increased investment behind our brands, give us a high level of confidence in our outlook for the season.
“The recent performance at Hawthorne is also encouraging as we began to see a return to growth in the U.S. hydroponics business in the second half of the first quarter, a trend that has continued in January. The integration of the Sunlight acquisition also remains on track, including the expected cost savings. These facts renew our confidence in our full-year outlook for Hawthorne and our bullish long-term outlook for our role as the leader in this evolving industry.”