Scotts Miracle-Gro Company (SMG) saw its loss narrow to $21.60 million, or $0.36 a share for the quarter ended Sep. 30, 2016. In the previous year period, the company reported a loss of $23.60 million, or $0.38 a share.
Revenue during the quarter grew 7.17 percent to $402.30 million from $375.40 million in the previous year period. Gross margin for the quarter expanded 59 basis points over the previous year period to 24.78 percent. Operating margin for the quarter stood at negative 7.23 percent as compared to a negative 14.38 percent for the previous year period.
Operating loss for the quarter was $29.10 million, compared with an operating loss of $54 million in the previous year period.
However, the adjusted operating loss for the quarter stood at $22.40 million compared to operating loss of $29 million in prior year period.
"This was an outstanding season and a giant step forward in the execution of our long-term strategic plan," said Jim Hagedorn, chairman and chief executive officer. "Not only did our core business have an exceptional recovery after weather-related challenges at the peak of the season, we also completed the joint venture between Scotts LawnService and TruGreen, closed on two major hydroponics acquisitions and created a new partnership with Bonnie Plants. As we enter Year 2 of 'Project Focus,' we will continue with the reconfiguration of our portfolio to add emphasis on our core U.S. consumer business and emerging high-growth opportunities under the Hawthorne Gardening Company umbrella. "Overall, we remain optimistic about our company-wide growth prospects for 2017 and remain on track to achieve our long-term operating margin goal of 18 percent."
For fiscal year 2017, Scotts Miracle-Gro Company forecasts revenue to grow in the range of 6 percent to 7 percent. The company expects diluted earnings per share to be in the range of $4.10 to $4.30 on adjusted basis.
Debt moves up
Scotts Miracle-Gro Company has witnessed an increase in total debt over the last one year. It stood at $1,316.10 million as on Sep. 30, 2016, up 13.69 percent or $158.50 million from $1,157.60 million on Sep. 30, 2015. Total debt was 46.84 percent of total assets as on Sep. 30, 2016, compared with 45.81 percent on Sep. 30, 2015. Debt to equity ratio was at 1.80 as on Sep. 30, 2016, down from 1.83 as on Sep. 30, 2015.
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