Scotts hits the ground running at a double-digit pace
The Scotts Miracle-Gro Company had double-digit gains to report in the first quarter of fiscal 2016, with volume growth and acquisitions largely driving the progress.
Net sales increased 14% to $245.7 million for the quarter, up from $216.2 million in the year-ago period.
The company largely attributed the strong performance to shipments in the U.S. core business and recent acquisitions: Global Consumer sales were up 16%, and Scotts LawnService sales were up 10%. Additionally, the first quarter of 2016 has six more days in it than the first quarter of 2015.
At the same time, net loss attributable to controlling interest widened in Q1 from $74.6 million to $81.3 million.
The company also announced a minority investment in Bonnie Plants Inc., a provider of potted vegetables and herbs.
“We couldn’t be more pleased with the start to the fiscal year and the partnership we are announcing today with Bonnie,” said Jim Hagedorn, chairman and CEO. “Consumer purchases of our products were strong throughout the fall season and our retail partners were highly engaged. The level of engagement we’ve been seeing in the marketplace gives us a high level of confidence as we prepare for the upcoming season."
In addition to holding a minority interest, ScottsMiracle-Gro will provide marketing, research and development and other services to Bonnie.
“We also continue to make outstanding progress implementing our strategic plan," added Hagedorn. "When we announced the details of ‘Project Focus’ in December we said the growth of our core business in the U.S. would be the centerpiece of our efforts. Directly participating in the live goods category is an essential element of this effort. We want the consumer to see ScottsMiracle-Gro as a true gardening company, not just a gardening products company. The partnership we are announcing today with Bonnie will be critical to meeting this goal.”
ScottsMiracle-Gro reaffirmed its fiscal 2016 outlook, which estimate a net sales increase of approximately 4 to 5%. Adjusted earnings per share are expected to be in a range of $3.75 to $3.95 per share.
Additionally, the pending joint venture between Scotts LawnService and TruGreen is on track for completion during the second quarter, after which the results from the company’s 30% ownership stake in TruGreen will be reported as other income.