Scotts Miracle-Gro's Cannabis-Focused Subsidiary Reports 39% YoY Revenue Drop In Q1
Portfolio Pulse from Jelena Martinovic
Scotts Miracle-Gro (NYSE:SMG) reported a 22% decline in Q1 sales to $410.4 million, with its Hawthorne Gardening Company subsidiary experiencing a 39% drop in sales. The company reaffirmed its fiscal 2024 guidance, aiming for high-single-digit growth in its consumer business and maintaining Hawthorne cash flow positive for fiscal 2024. Despite the sales decline, SMG is focused on debt paydown and restoring a strong balance sheet with a target of $575 million adjusted EBITDA and $560 million free cash flow.
February 08, 2024 | 4:45 pm
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Scotts Miracle-Gro reported a significant decline in Q1 sales, with a notable 39% drop in its Hawthorne subsidiary's sales. The company remains optimistic, reaffirming its fiscal 2024 guidance for growth and focusing on debt reduction and cash flow positivity.
The reported 22% decline in overall sales and a 39% drop in Hawthorne's sales indicate a challenging quarter for Scotts Miracle-Gro, likely leading to a negative short-term impact on SMG's stock price. However, the company's reaffirmation of its fiscal 2024 guidance and focus on strategic goals such as debt reduction and maintaining cash flow positivity in Hawthorne may mitigate some investor concerns over the long term.
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