Profits plunge at Scotts Miracle-Gro
Scotts Miracle-Gro, the industry’s largest supplier of lawn and garden products, reported sales of $1.06 billion for its third fiscal quarter, showing little change from sales of $1.05 billion in the same quarter of 2011.
Adjusted income from continuing operations was $99.4 million in the third quarter, a 21.5% drop from adjusted income of $126.7 million for the same period a year ago.
The Marysville, Ohio-based company said consumer purchases of its products at its largest retail partners in the United States declined 5% in the third quarter.
"After a strong start to the season, consumer engagement clearly began to decline in May and June," said Jim Hagedorn, chairman and CEO. "We're pleased to see strong year-over-year improvement in consumer purchases of mulch and controls, but our fertilizer and growing media categories are flat so far this year and have not delivered the results we expected.”
Hagedorn added that the company will “move as quickly as we reasonably can to restore the level of profitability that our business reported just two years ago.” Part of that strategy, he said, was planned price increases, along with several other initiatives to improve the gross margin rate and reduce expenses.
"While we will continue to evaluate acquisition opportunities, our near-term focus will be on restoring our current business to an appropriate level of profitability, not on integrating something new," Hagedorn said.