ScottsMiracle-Gro optimistic for 2008, despite slow second quarter
Despite a late launch to the lawn and garden season, which led to adjusted earnings for the second quarter, ScottsMiracle-Gro remains “encouraged by initial consumer response” to new products and has reaffirmed guidance for the year.
“Consumer activity over the first two weeks of April has been strong, and we are recovering ground we lost due to a later than expected break to the season in most parts of the United States,” said Jim Hagedorn, chairman and CEO. “Weather always dictates the launch of the season, and this year got off to a slower start than we've typically experienced.”
The Marysville, Ohio-based company said it expects adjusted earnings in the second quarter, which ended March 29, to range from approximately $1.14 to $1.18 per diluted share, compared to adjusted earnings of $1.40 per share for the same period a year ago. Hagedorn said that while second-quarter and first-half results will be less than the company had expected, the first two quarters historically represent about 25 percent of consumer purchases for the full year.
“We remain encouraged by initial consumer response to our new products as well as the quality of our programs and promotions, and see no reason at this time to change our outlook for the full year,” he said.
Fiscal 2008 reported results will include $15 million to $20 million in unexpected costs due to a voluntary retail recall of wild bird food. A significant portion of this cost will be included in the second-quarter results. The company will account for costs associated with the recall on the line “restructuring and other one-time charges.” As a result, ScottsMiracle-Gro will exclude these costs when discussing its expected results for the full year.
ScottsMiracle-Gro will report its complete second-quarter results on April 29.