Scotts reports Q2 sales slump
Marysville, Ohio-based Scotts Miracle-Gro Company has had a rough spring selling season. The company reported a company-wide sales decline of 7%, primarily due to the slow start to lawn-and-garden season.
For the fiscal second quarter, the company reported sales of $1.01 billion, down 7% from $1.08 billion a year earlier. U.S. Consumer segment sales declined 6% to $920.2 million. Sales for the Hawthorne – specializing in hydroponics -- decreased 29% to $41.8 million.
“The start to this lawn and garden season has been delayed to a greater extent than we have seen in recent memory,” said Jim Hagedorn, chairman and chief executive officer. “Consumer purchases entering May are down double digits from a year ago.”
On a positive note, he added: “We’ve begun to see momentum picking up in the Midwest and Northeast in recent weeks as the weather has turned more favorable, making us optimistic that we can quickly make up ground and finish the season as strong as possible,” Hagedorn added.
The company’s hydroponics business – a field closely associated with, but not necessarily connected to marijuana cultivation – faces challenges in California, where regulatory changes have affected growth and distribution of marijuana.
“As we’ve previously stated, we now expect those challenges to last for the balance of the year and now believe Hawthorne sales will likely be, at best, flat in 2018 on a year-over-year basis including the impact of acquisitions,” Hagedorn said.
In April, the company agreed to buy hydroponics company Sunlight Supply of Vancouver, Washington, for some $450 million. Hawthorne, which had 2017 sales of approximately $290 million, owns leading hydroponic brands such as Gavita, Botanicare, Can-Filters, and General Hydroponics. That deal marked Scott’s latest of several hydroponics investment, which if added up, would amount to more than $1 billion.
Scotts Q2 company-wide gross margin rates decreased 290 basis points to 35.9%.
For the fiscal second quarter, the company reported sales of $1.01 billion, down 7% from $1.08 billion a year earlier. U.S. Consumer segment sales declined 6% to $920.2 million. Sales for the Hawthorne – specializing in hydroponics -- decreased 29% to $41.8 million.
“The start to this lawn and garden season has been delayed to a greater extent than we have seen in recent memory,” said Jim Hagedorn, chairman and chief executive officer. “Consumer purchases entering May are down double digits from a year ago.”
On a positive note, he added: “We’ve begun to see momentum picking up in the Midwest and Northeast in recent weeks as the weather has turned more favorable, making us optimistic that we can quickly make up ground and finish the season as strong as possible,” Hagedorn added.
The company’s hydroponics business – a field closely associated with, but not necessarily connected to marijuana cultivation – faces challenges in California, where regulatory changes have affected growth and distribution of marijuana.
“As we’ve previously stated, we now expect those challenges to last for the balance of the year and now believe Hawthorne sales will likely be, at best, flat in 2018 on a year-over-year basis including the impact of acquisitions,” Hagedorn said.
In April, the company agreed to buy hydroponics company Sunlight Supply of Vancouver, Washington, for some $450 million. Hawthorne, which had 2017 sales of approximately $290 million, owns leading hydroponic brands such as Gavita, Botanicare, Can-Filters, and General Hydroponics. That deal marked Scott’s latest of several hydroponics investment, which if added up, would amount to more than $1 billion.
Scotts Q2 company-wide gross margin rates decreased 290 basis points to 35.9%.