MARYSVILLE, Ohio, June 12, 2012 /PRNewswire-FirstCall/ -- The Scotts Miracle-Gro Company (NYSE: SMG), the world's leading marketer of branded consumer lawn and garden products, today provided a financial update for fiscal 2012 to reflect the pressures driven by lower-than-expected sales and unfavorable product mix.
The Company said consumer purchases of its products at its largest retail partners in the U.S. are up 3 percent on a year-to-date basis, compared with 8 percent entering May. As a result, it expects to fall short of its previous guidance of 6 to 8 percent sales growth as well as adjusted earnings of $2.65 to $2.85 per share. An updated outlook will be provided when ScottsMiracle-Gro issues its third quarter financial results in early August.
"While we are clearly disappointed that we will fall short of our plans, there have been several key wins during the season that give us reason to be confident moving forward," said Jim Hagedorn, chairman and chief executive officer. "We have seen unit growth in consumer purchases of our lawn fertilizer products for the first time in several years. Our controls businesses – where growth in consumer purchases has been in the high teens – are having their best season ever. In addition, our mulch business has grown by about 25 percent through the first seven months of the year. Those facts, coupled with market share gains in nearly every category, reinforce our confidence in our strategy and our brands."
The Company said challenges this year are primarily an outcome of slowing consumer demand following a strong and early start to the lawn care season in the second quarter. However, the gardening season, which traditionally peaks in mid- to late-May, has not met expectations. Consumer purchases of Miracle-Gro branded soils and plant food are essentially in line with 2011 and appear to have been negatively impacted by an industry-wide slowdown in the sale of flower and vegetable plants. In addition, the Company said poor weather and challenging economic conditions will also cause its European business to fall short of expectations.
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