Scotts sees a strong start to lawn-and-garden season

Marysville, Ohio-based The Scotts Miracle-Gro said a record level of consumer purchases in March led to a 4% gain in company-wide sales in the second quarter to $1.17 billion.

Entering May, consumer purchases of the company's products at its largest retail partners in the United States were up 8%, with growth in 45 states, all major retail channels and nearly all product categories.

Net income was reported at $127.2 million, down from $177.6 million in the same quarter last year.

"We are well positioned as we conclude the peak weeks of the lawn fertilizer season and move into the peak of gardening activity," said Jim Hagedorn, chairman and CEO. "We have seen strong consumer engagement across the United States whenever the weather has cooperated as evidenced by the 20% increase in consumer purchases for the second quarter. Entering May, consumer purchases are up 8%, an outstanding result with growth and market share gains in nearly every category and region.”

Sales in the U.S. business increased 3%, while sales in the international business increased 5%, or 8% excluding the impact of foreign exchange rates.

"While the gross margin rate in the quarter was consistent with our expectations, we are closely monitoring recent trends in material and distribution costs, product mix and trade promotions," said Dave Evans, executive VP and chief financial officer. "Continued negative trends in any of these areas increase the likelihood that gross margin rate could fall below the low end of the range that we outlined earlier this year."