Scotts lowers forecast as consumers hold back
Marysville, Ohio-based Scotts Miracle-Gro said it expects to report a 2% decline in sales for fiscal 2011 when it issues its full-year financial results Nov. 8.
The sales shortfall, coupled with associated gross margin pressure, will likely result in adjusted net earnings in a range of approximately $2.70 to $2.75 per share, according to the company. The company had forecast earnings of about $3.00 per share back in August.
The reduced outlook stems primarily from an unexpected year-over-year decline in consumer purchases in the United States during September.
"While we were counting on another strong fall lawn care season, the weather issues that plagued us throughout fiscal 2011 remained problematic during the fourth quarter," said Jim Hagedorn, chairman and CEO. "The impact of Hurricane Irene and other inclement weather in September all but eliminated lawn and garden activity in key markets during a critical period of our fall season, not only in our consumer business but for Scotts LawnService as well."
When the weather was good, so was business, Hagedorn said. "But the combination of weather, commodities and challenges in the mass merchant channel were just too much to overcome in a single season," he said.
He added that the company remains optimistic about its innovations coming to market in 2012.