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Shares of Scotts Miracle-Gro (NYSE:SMG) are down nearly 14% after the company slashed its full-year 2022 guidance for both revenue and adjusted earnings.
The company now sees an adjusted EPS between $4.50 to $5.00, a large miss compared to the $7.25 expected and significantly lower than the previous $8.00.
“The changes we have seen since our last public comments in early May are clearly not what we would have expected,” said Jim Hagedorn, chairman and chief executive officer.
“The revised guidance we are providing is our best estimate of where things currently stand in a fluid and rapidly evolving market. While we are striving to deliver the best outcome for fiscal 2022, our focus is shifting toward the future. We are committed to taking decisive steps to improve our margins and cash flow in fiscal 2023 and get the business back to a level of performance that our shareholders rightfully expect.”
The company expects U.S. Consumer sales to decline between 4% and 6% with Hawthorne sales expected to fall 40% and 45% for the year ending September 30, 2022.
“Entering May, Hawthorne sales had begun to show signs of strengthening but momentum in the business slowed again during the month as expected improvement in outdoor cultivation has been slow to materialize.”
SMG also said it is holding “highly productive discussions” with its lenders.
