The Scotts Miracle-Gro Co., headquartered in Marysville, Ohio, released results for its fiscal third quarter, which highlights an increase in sales for its Scotts LawnService business.
“The second half of the lawn and garden season has been extremely strong, with positive consumer purchases against the double-digit increases we posted a year ago,” said Jim Hagedorn, chairman and CEO. “Our momentum is carrying into the fourth quarter with consumer purchases in July at an all-time high and our European business on track to have its most profitable year ever. Based on our continued momentum, we’re now confident that full-year earnings are trending toward the high end of our previous guidance range with upside potential depending on results for the balance of the year. We also are finalizing plans to increase our focus on shareholder friendly actions. Within the coming weeks, we expect to announce returning roughly $125 million, or about $2 per share, to shareholders during the fourth quarter.”
Scotts LawnService 3Q, year-over-year results
Scotts LawnService sales increased 3 percent to $92.8 million in the third quarter, compared to $89.9 million a year ago, primarily due to the timing of sales shifting from the second quarter to the third quarter due to the delayed start of the spring season. For the first nine months of the year, Scotts LawnService sales were flat, compared to a year ago. Concurrently, the segment reported an operating income of $20.7 million for the quarter, a decline of 7 percent, compared with $22.3 million during the same quarter a year ago.
Companywide results
Companywide net sales for the quarter declined 2 percent to $1.12 billion due to a 3 percent decline in the global consumer segment. Moreover, the companywide adjusted gross margin rate was 37.9 percent, compared with 38.9 percent a year ago. The consolidated company-wide adjusted income from continuing operations before income taxes was $227.3 million during the quarter, compared to $240.7 million a year ago.
Adjusted income from continuing operations for the third quarter was $146.0 million, or $2.34 per share, which excludes impairment, restructuring and other charges. That compares with adjusted income of $153.4 million, or $2.45 per share, last year. On a GAAP basis, income from continuing operations was $120.7 million, or $1.93 per share, compared with $147.7 million, or $2.36 per share, a year ago.
The quarter included a $33.7 million non-cash impairment charge related to the Ortho brand as part of the company’s impairment review.
Net sales for the first nine months of fiscal 2014 increased 2 percent to $2.39 billion, compared to $2.34 billion a year ago. The company expects full-year adjusted earnings to be at least on the high-end of its guidance range of $3.05 to $3.20 per share.
