Scotts Miracle-Gro (SMG) fell 14% after-hours as the lawn care company announced that it won’t meet its previous earnings guidance because of reduced demand for its products.
“The Company said consumer purchases of its products at its largest retail partners in the U.S. are up 3 percent on a year-to-date basis, compared with 8 percent entering May. As a result, it expects to fall short of its previous guidance of 6 to 8 percent sales growth as well as adjusted earnings of $2.65 to $2.85 per share.”
Scotts said its gross margin will also likely fall short of its prior expectations “due primarily to unfavorable product mix, unplanned distribution costs associated with the strong performance of the controls and mulch businesses and reduced leverage of fixed costs.”
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