The Scotts Miracle-Gro Company SMG has reaffirmed its fiscal 2025 guidance. SMG noted continued year-over-year growth in both consumer point-of-sale (POS) units and POS dollars during the peak lawn and garden season, with trends through Memorial Day weekend remaining consistent with the first half of the fiscal year.
The company expects its interest expense to decline about $30 million from the previous year compared with the earlier forecasted decrease of $15-$20 million. Additionally, it has revised its projected increase in share count to approximately 1 million, down from the prior estimate of 2 million. SMG anticipates adjusted earnings per share to be at least $3.50, marking a 53% increase over the previous year.
During the peak lawn and garden season, the company continues to achieve favorable results across various areas, reflecting both a resilient consumer base and the effectiveness of its increased marketing efforts and retailer promotions. Robust consumer demand, combined with the pace of retailer restocking in the third quarter, reinforces the company’s confidence in meeting its full-year outlook. Meeting its targets for adjusted EBITDA and free cash flow will allow it to end fiscal 2025 with a much-improved debt profile, positioning it to achieve its leverage goal of below 3.5 by the close of fiscal 2027.
SMG has reaffirmed its previously announced fiscal 2025 guidance, which includes low single-digit growth in U.S. Consumer net sales, excluding non-recurring sales related to AeroGarden and bulk raw material sales. It expects an adjusted gross margin of approximately 30%, with adjusted EBITDA projected to range between $570 million and $590 million. Additionally, the company anticipates generating approximately $250 million in free cash flow for the year.
SMG’s shares are down 4.7% over a year against the 0.8% growth recorded by its industry.
Image Source: Zacks Investment ResearchSMG’s Rank & Key Picks
SMG currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space are Carpenter Technology Corporation CRS, Alamos Gold Inc. AGI and Hawkins, Inc. HWKN.
Carpenter Technology currently sports a Zacks Rank #1 (Strong Buy). CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 11.1%. The company's shares have soared 110% in the past year. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Alamos Gold's current-year earnings is pegged at $1.29 per share. AGI, sporting a Zacks Rank of 1 at present, surpassed the Zacks Consensus Estimate in two of the trailing four quarters, while missing twice, with an average earnings surprise of 1.4%. The company's shares have rallied 58.1% in the past year.
Hawkins, which currently carries a Zacks Rank #2 (Buy), beat the consensus estimate in one of the trailing four quarters, while missing thrice. In this time frame, it has delivered an earnings surprise of roughly 8.2%, on average. The company's shares have rallied 43.6% in the past year.
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Carpenter Technology Corporation (CRS): Free Stock Analysis Report The Scotts Miracle-Gro Company (SMG): Free Stock Analysis Report Alamos Gold Inc. (AGI): Free Stock Analysis Report Hawkins, Inc. (HWKN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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