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The Scotts Miracle-Gro's CEO Discusses F3Q12 Results - Earnings Call Transcript

Stocks in this article: SMG

We remain committed to returning cash to shareholders in the near and long term. That’s why our board this week approved an 8% increase in our dividend, now bringing it to a $1.30 per share on an annual basis. And I will come back to this point later in my remarks. For now, let’s take a look at the quarter.

As you saw in the press release consumer purchases are now up 1% year-to-date entering August. Within those numbers we have seen some wins and we have seen some losses. And I will start by saying, overall, we have gained about 2 points of market share this year in units. And other than non-selective weed and outdoor insect, we have gained share in every category. At our largest retail partners, consumer purchases of our control products sold under the Roundup and Ortho brands, are up nearly double-digits for the year.

Mulch is up 16% for the year. And consumer purchases of our Scotts branded lawn fertilizer are essentially flat, reversing a pattern of year-over-year unit declines. Consumer purchases of products we are distributing for S.C. Johnson are up 70%, as we continue to see strong benefits from this partnership. Innovation was important in the areas we saw strength. Our new battery-powered sprayer was key to the growth of the Ortho business and the Snap spreader system delivered on plan. We put Snap in the hands of about 200,000 consumers, nearly all of them have bought more fertilizer this season than users of our traditional spreaders.

For the balance of the year we have strong programs in place for fall lawn care activity. Given the harsh summer growing conditions, we are cautiously optimistic that lawn care consumers will reengage in September and October and help us drive positive growth in the fertilizer category for the full season. Consumer purchases of grass seed are down about 14% so far this year. As we stated in the past, we expected declines this season given the lack of damage to lawns from last year’s mild weather. But the category was off more than we thought. That said, we gained more than 250 basis points of market share in grass seed this season.

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