Scotts expects rough patch in first quarter
Marysville, Ohio-based Scotts Miracle-Gro said Wednesday morning that its first quarter will see a bigger-than-expected loss, but it is maintaining its outlook for the full year.
Sales for the first quarter ending Dec. 31 are expected to decline about $30 million from the same quarter a year ago. The adjusted net loss in the quarter is expected to range from $70 million to $75 million, compared with a net loss of $65.6 million in the prior year.
The $1.20-to-$1.25 per share loss is greater than the $1.13 per share loss expected by Wall Street.
The first quarter is the slowest selling season for the lawn and garden company. It represents less than 10% of Scotts' full-year total.
The company pointed to lower sales volume, "unfavorable product mix" and higher commodity costs for hurting its performance.
"The foundation we've built for fiscal 2012 gives us a high degree of confidence in a strong lawn and garden season," said Jim Hagedorn, chairman and CEO. "We're excited about the innovation we're bringing to the market, our increased investment in advertising and the continued evolution of our consumer-centric business model. The results we expect in the first quarter are in line with our internal expectations as we work with our retail partners to help them finish the year with lower inventory levels. That, in turn, should set the stage for a strong spring selling season."
The company continues to expect sales growth of at least 6% from its Global Consumer and Scotts LawnService segments in fiscal 2012.