Over the past 12 years, Scotts Miracle-Gro’s (SMG) gross margins have averaged ~35%. The company’s gross margins have been fairly stable in the past. Let’s look at what analysts estimate for the next four quarters.
For the company’s upcoming 2Q17 earnings, analysts’ gross income estimates stood at $541 million—3.8% higher than $521 million in 2Q16. Gross margins on the company’s 2Q17 sales estimate of $1.2 billion would come in at 42%—unchanged from 2Q16.
For the next four quarters, analysts estimate gross income of $1.1 billion—about 6.5% higher than $1.2 billion in the last four quarters. Margins are estimated to expand slightly from 35.5% to 36% during the same period.
Scotts Miracle-Gro’s sales are estimated to grow 5.2% over the next four quarters. The gross income is estimated to grow 6.5%, which indicates that the company’s cost of goods will grow slower than sales growth to benefit margins.
Companies (MOO) such as Scotts Miracle-Gro, Central Garden & Pet (CENT), Spectrum Brands (SPB), and Agrium (AGU) are all in the race to improve their margins. Cental Garden & Pet is expected to report gross margins of 30%. Spectrum Brands is expected to report gross margins of 38%, while Agrium’s gross margins are estimated to stand at 25% over the next four quarters.