uploads///SMGs YTD Stock Movement

Is Scotts Miracle-Gro Slowing Down?

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Aug. 10 2017, Published 5:30 a.m. ET

Scotts Miracle-Gro stock

The Scotts Miracle-Gro Company (SMG) announced its recent earnings on August 1, 2017. The company reported EPS (earnings per share) of $2.53 without adjustments and EPS of $2.63 with adjustments. It also beat analysts’ estimates of $2.51. On an adjusted basis, Scotts Miracle-Gro’s 3Q17 earnings were almost 21% higher year-over-year from $2.16 per share.

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Market reaction

Following the company’s earnings release, the stock closed ~2.3% lower at $93.8 from the previous day’s close. Seven days following the company’s earnings, the stock recovered and closed at $96.18 as of August 8, 2017.

Scotts Miracle-Gro’s performance wasn’t unexpected. In June, the company revised its guidance downwards due to slow retail sales and a late start to the season. Most of the company’s growth has been driven by acquisitions. The company has slowed down on acquisitions this year.

Read The Scotts Miracle-Gro Company: What’s Its Secret? to learn more about Scotts Miracle-Gro’s drivers.

Versus peers

The stock has only returned 0.66% YTD (year-to-date), which isn’t significant compared to the company’s return of 48.1% last year. So far this year, the company has underperformed the benchmarks. The S&P 500 Index (SPY) has returned 9.5% YTD, while the PowerShares Global Agriculture ETF (PAGG) has returned 4.7% during the same period.

Peers such as Spectrum Brands Holdings (SPB) has returned losses of 9.2% YTD. On the other hand, Central Garden & Pet Company (CENT) has returned 6.9% YTD and the HRG Group (HRG) has returned 3.3% YTD.

Series overview

In this series, we’ll primarily discuss key themes from Scotts Miracle-Gro’s earnings that were released earlier this month. We’ll discuss catalysts that were identified as the company’s growth drivers during the earnings call.

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