Scotts Miracle-Gro: Analysts’ Sales Expectations in 3Q17



Sales estimates

Scotts Miracle-Gro’s (SMG) sales growth is expected to be 4.4% YoY (year-over-year) in the coming four quarters. It isn’t significant growth for investors, but it’s better than the negative YoY sales growth that the company experienced in the last four quarters. The forward-looking positive growth numbers might indicate that analysts expect the worst to be over for the company. Scotts Miracle-Gro earns its sales from garden and lawn care products. It also distributes crop protection products produced by Monsanto (MON).

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Analysts’ estimates

For Scotts Miracle-Gro’s upcoming 3Q17 earnings, Wall Street analysts estimate that the company will report sales of $1.06 billion—growth of 6.8% YoY from ~$1 billion a year ago. In 4Q17, the company is expected to report sales growth of 5.7% followed by 4.1% growth in 1Q18 and 2.2% growth in 2Q18. Similarly, the Central Garden & Pet Company’s (CENT) sales are expected to grow as much as 6% YoY in 3Q17.

The above expectations show that the growth in sales will decelerate as we go into the next four quarters, which causes concerns. Marijuana regulations under the Trump Administration remain an overhang for the company and investors (MOO). Earlier, the Trump Administration indicated support for using marijuana for medical purposes. However, there were also signs that the Trump Administration was against recreational use.

Spectrum Brands Holdings (SPB) reported its 3Q17 earnings on July 27. Its sales fell as much as 4.3% YoY.

Next, we’ll discuss margin expectations for Scotts Miracle-Gro.


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