Scotts Miracle-Gro (NYSE:SMG) Reports Exceptional Results In First Half Thanks To Growth In Cannabis Sales

Scotts Miracle-Gro (NYSE:SMG) is a potential millionaire-maker stock after soaring 70% in the past 12 months and it is 42% up year to date. The company was among the companies that have grown sales during the pandemic.

Scotts Miracle saw a surge in cannabis sales in the first half

In an earnings call, Chris Hagedorn the SVP of the company indicated that due to the quarantine measure most people are going to spend time at home gardening and smoking pot. This is a massive opportunity for the lawn and garden care products company whose lawn and gardens segment is from the US and cannabis connection from its indoor garden and hydroponic business in Hawthorne.

Although cannabis-related business generated around 11% of the company’s profits it was still significant to its overall increase in profits. The company’s sales were $1.749 billion with a profit of around $371 million thanks to a surge in sales during the coronavirus pandemic and it expects the momentum to continue.

Scotts expects full-year EPS of $4.95 to $5.15

Following the exceptional results in the first half especially in the second quarter, the company has updated its guidance outlook. In Q2 Hawthorne sales grew 60% but the management is somehow conservative and expects full-year sales from this segment to grow by 30% to 35%. On the other hand, the consumer segment saw sales grow 11% in Q1 and Q2 and expects full-year sales to grow by around 1% to 3%.  Total sales for the full year are expected to grow by 6% to 8% and full-year earnings per share guidance will be between $4.95 and $5.15.

Randy Coleman the CFO of the company indicated that the business can be seasonal the CEO Jim Hagedorn indicated that in recent weeks sales have been crazy. Currently, Scotts is in growth mode and following a strong run its share price is reflecting the exceptional results in Q1. 

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