Scotts Miracle-Gro Touts Record Quarter, Hawthorne 'Gains Steam,' CEO Says

The Scotts Miracle-Gro Co.’s SMG shares went up 1.7% in pre-market trading on the heels of the company’s announcement that its total revenue spiked 79% to $890.3 million in the fourth quarter.

For the year, company-wide sales rose 31% to $4.13 billion.

Moreover, Hawthorne Gardening Company’s sales increased by 68% to $351.9 million. The other segment of The Marysville, Ohio-based company, U.S. Consumer, spiked 90% to $497.2 million.

Jim Hagedorn, the company’s Chairman, and CEO said Wednesday that September was its “highest sales month ever,” as Hawthorne “continued to gain steam.”

“The 90 percent fourth-quarter increase in our U.S. Consumer segment was driven by continued strong consumer demand and support from our retailers who were replenishing inventory levels in anticipation of continued strength,” Hagedorn added.

Other Highlights From The Quarter:

For the quarter, GAAP and non-GAAP adjusted gross margin rate was 24.3%, versus 18% and 18.5%, respectively, in the same period of the last year.

• On the year-to-date basis, the GAAP gross margin rate was 32.6%, while the non-GAAP adjusted rate was 33%
• Quarterly selling, general and administrative expenses amounted to $204.8 million, up by 47% year-over-year
• Yearly selling, general and administrative expenses amounted to $757.8 million
• Interest expense declined $5 million over the year to $16.7 million in the fourth quarter
• Income from continuing operations for the quarter was $4.2 million
• Operating cash flow for fiscal 2020 was $558 million

The company expects Hawthorne sales to increase roughly 15-20% in 2021 and U.S. Consumer to remain flat to down 5%.

As a supplier to the cannabis industry, Scotts Miracle-Gro is poised to benefit as the industry is ramping up toward establishing itself on the federal level.

According to Politico, the company supported New Jersey’s cannabis legalization initiative by donating $800,000 to two committees advocating for the cause. In addition, the Garden State respondents voted in favor of cannabis legalization on the Nov. 3 ballot, the New York Times reported Tuesday.

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