Scotts Miracle-Gro (SMG -7.2%) Stocks fell to their lowest level in nearly two years after cut sales guidance for the whole year for its Hawthorne segment and said the reduction would likely result in lower-than-expected adjusted earnings for fiscal 2022.
Chief Financial Officer Cory Miller said the company now expects Hawthorne sales to drop by 15%-25%, including benefits from the acquisition, after several months of oversupply of cannabis, resulting in the withdrawal Both indoor and outdoor farming have leveled off.
Scotts said the revised Hawthorne sales outlook means the company is unlikely to hit the low end of guidance for adjusted EPS, which it currently expects to hit “at least” $8 for the year. , down here previous instruction of $8.50-$8.90.
The company also said it no longer expects a significant acquisition in fiscal 2022, after actively pursuing such an opportunity over the past year.
Scotts Miracle-Gro has fallen out of favor with investors, but management is restructuring the business and the stock could be a good choice for bargain hunters, Gen Alpha wrote in a note. Bullish analysis published on Seeking Alpha.