Scotts Miracle-Gro (NYSE:SMG) announced Tuesday that it expects to fall short of its prior fiscal-year guidance due to lower-than-expected U.S. sales.
According to the lawn and garden products giant, U.S. sales of its products are up only 3% year-to-date, a decline from the 8% sales growth achieved at the start of May. As a result, the company expects to miss its full-year expectations of 6% to 8% sales growth and adjusted earnings of $2.65 to $2.85 per share.
Continue Reading Below
The company stated that it faced many challenges this year, primarily slowing consumer demand after a strong, early start to the lawn care season and a subpar gardening season. The company also said the industry as a whole saw a decline in sales of flower and vegetable plants, which hurt plant food and soil sales. Sales in Europe have fallen due to economic concerns and poor weather, the company said.
"While we remain confident in the long-term growth opportunities in our business, it is clear that near-term category growth has become harder to achieve," the company’s chairman and CEO Jim Hagedorn said in a statement.
Scotts Miracle-Gro said it remains optimistic about the future, citing strong performance in its controls business and gains in market share. The company also said its mulch business has grown 25% over the first seven months of the year.
Shares of Scotts Miracle-Gro were down 7.4% at $39.86 as of 12:30 p.m. ET on Tuesday.