The Scotts Miracle-Gro Company (SMG) saw its loss narrow to $65.30 million, or $1.09 a share for the quarter ended Dec. 31, 2016. In the previous year period, the company reported a loss of $81.30 million, or $1.32 a share. On the other hand, adjusted net loss for the quarter narrowed to $57.60 million, or $0.96 a share from a loss of $69.90 million or $1.14 a share, a year ago. Revenue during the quarter grew 26.89 percent to $246.80 million from $194.50 million in the previous year period. Gross margin for the quarter expanded 932 basis points over the previous year period to 17.91 percent. Operating margin for the quarter stood at negative 28.73 percent as compared to a negative 50.23 percent for the previous year period.
Operating loss for the quarter was $70.90 million, compared with an operating loss of $97.70 million in the previous year period.
However, the adjusted operating loss for the quarter stood at $69.50 million compared to operating loss of $91.20 million in prior year period.
“The strong consumer demand that we saw last summer continued into the fall and gave us an outstanding start to our new fiscal year,” said Jim Hagedorn, chairman and chief executive officer. “As we prepare for the start of another lawn and garden season, we continue to see strong retailer support for our category and for our brands. The strength of the core U.S. business, combined with the continued momentum from the hydroponic businesses in the Hawthorne Gardening Company portfolio, give us great confidence as we enter the season and in the financial guidance that we have provided.”
The Scotts Miracle-Gro Company projects revenue to grow in the range of 6 percent to 7 percent for the financial year 2017. For financial year 2017, the company forecasts diluted earnings per share to be in the range of $4.10 to $4.30 on adjusted basis.
Working capital increases
The Scotts Miracle-Gro Company has recorded an increase in the working capital over the last year. It stood at $762.20 million as at Dec. 31, 2016, up 8.51 percent or $59.80 million from $702.40 million on Jan. 02, 2016. Current ratio was at 2.72 as on Dec. 31, 2016, up from 2.58 on Jan. 02, 2016. Cash conversion cycle (CCC) has decreased to 176 days for the quarter from 322 days for the last year period. Days sales outstanding went down to 107 days for the quarter compared with 130 days for the same period last year.
Days inventory outstanding has decreased to 172 days for the quarter compared with 306 days for the previous year period. At the same time, days payable outstanding went down to 103 days for the quarter from 113 for the same period last year.
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