Scotts Miracle-Gro (NYSE: SMG) reported Q2 EPS of $3.64, $0.22 better than the analyst estimate of $3.42. Revenue for the quarter came in at $1.19 billion versus the consensus estimate of $1.16 billion.

• U.S. Consumer sales increase 8% driven by double-digit growth in consumer purchases
• Hawthorne sales up 245% due to Sunlight acquisition and volume growth in most categories
• GAAP EPS: $7.10 versus $2.66; Non-GAAP adjusted EPS of $3.64 versus $2.88
• Full-year financial guidance re-affirmed

“Consumers came flying out of the gate compared with last year to get a head start on the lawn and garden season,” said Jim Hagedorn, chairman and chief executive officer. “We’ve seen strong consumer engagement in every region, in every channel of retail and in nearly every product category in which we compete. Innovation has helped drive double-digit increases in lawn food, grass seed and growing media products, while retailer support led to over a 30 percent increase in consumer purchases of mulch. In addition, consumer purchases of non-selective weed control also are well ahead of last year, including a more than 20 percent increase in Roundup purchases.”

“In Hawthorne, shipments increased double digits on a comparative basis in every month of the quarter, and again in April. We’re seeing consistent growth in both durable and consumable products and solid performance in both new and established markets.”

“Our strong start in both businesses gives us increased confidence in our full-year guidance and increases the probability that sales growth for the full year could exceed our original guidance range of 10 to 11 percent.”

Full-year outlook

The Company re-affirmed all aspects of its fiscal 2019 guidance although it acknowledged the strong start in both the U.S. Consumer and Hawthorne segments increases the probability that sales growth for the full year could exceed its original forecast.

“We are extremely pleased with our strong start to the year, which gives us a high degree of confidence in our guidance for non-GAAP adjusted earnings in a range of $4.10 to $4.30 per share,” said Randy Coleman, executive vice president and chief financial officer. “Our expected performance, combined with the cash proceeds from two divestitures, is allowing us to pay down debt more quickly than we expected several months ago.”

“While it’s still too early in the fiscal year to adjust any of our guidance targets, we currently anticipate providing the financial community with an updated outlook on fiscal 2019 in early June, consistent with how we’ve operated in the past.”

GUIDANCE:

Scotts Miracle-Gro sees FY2019 EPS of $4.10-$4.30, versus the consensus of $4.22.

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