The Scotts Miracle Gro Co (SMG) Reports Fiscal 2023 Full-Year Results
The Scotts Miracle Gro Co (NYSE:SMG) reported fiscal 2023 net sales of $3.55 billion, in line with guidance.
Full-year GAAP loss per share was $6.79, with adjusted non-GAAP EPS of $1.21.
Free cash flow improved by $681 million year over year, reaching $438 million.
Company-wide sales decreased by 10% on a full-year basis.
Released on November 1, 2023, The Scotts Miracle Gro Co (NYSE:SMG)'s fiscal 2023 full-year results show net sales in line with guidance and adjusted non-GAAP earnings exceeding guidance, thanks to the faster realization of Project Springboard savings. Despite a 10% decline in sales year over year, the company reported a GAAP loss of $6.79 per share for fiscal 2023 and non-GAAP adjusted earnings of $1.21 per diluted share.
Financial Performance Highlights
For the fiscal year ended September 30, 2023, company-wide sales decreased 10% to $3.55 billion. U.S. Consumer segment sales declined 3% to $2.84 billion, mainly driven by lower volumes partially offset by pricing. Hawthorne segment sales decreased 35% to $467.3 million compared with $716.2 million during the same period last year.
GAAP net loss was $380.1 million, or $6.79 per share, compared with a loss of $437.5 million, or $7.88 per share, in the prior year. Non-GAAP adjusted earnings, which exclude impairment, restructuring and other non-recurring items, were $68.1 million, or $1.21 per diluted share, compared with $230.0 million, or $4.10 per diluted share, last year.
Company's Response and Future Outlook
Despite the challenges, the company's leadership remains optimistic. Chairman and CEO Jim Hagedorn stated,
The outcome of fiscal 23 is stabilization of the business and a return to a more normal state of operating. We made measurable progress on a number of fronts with Project Springboard cost savings, free cash flow generation and debt reduction."
Looking ahead, the company's financial outlook for fiscal 2024 incorporates meaningful progress on margin recovery while adjusting for a higher share count, effective tax rate and average cost of borrowing versus fiscal 2023.
Fourth Quarter Details
For the quarter ended September 30, 2023, company-wide sales decreased 24% to $374.5 million. U.S. Consumer segment sales declined 33% to $201.0 million from $302.1 million a year ago, driven by lower volumes and timing of shipments. Hawthorne segment sales decreased 11% to $149.7 million, compared with $168.5 million during the same period last year.
Balance Sheet and Cash Flow
Free cash flow for fiscal 2023 increased $680.7 million to $438.2 million mainly driven by reductions to inventory levels during the year. The Companys debt-to-EBITDA ratio at the end of the year was 6.57 times and within the fourth-quarter covenant maximum of 7.75 times.
Explore the complete 8-K earnings release (here) from The Scotts Miracle Gro Co for further details.
This article first appeared on GuruFocus.
