Scotts Miracle-Gro shares drop on profit warning

Scotts Miracle-Gro Co. shares fell 12% in premarket trades Wednesday after the lawn and garden specialist said it now expects 2022 adjusted earnings of $4.50 a share to $5 a share, below the current analyst target of $6.95 a share that was aggregated by FactSet. U.S. consumer sales are expected to decline by 4% to 6%. Retailer orders for lawn and garden products in May came in $300 million below its target, the company said. Also, its Hawthorne cannabis grow products unit is now expected to post a sales decline of 40% to 45% for the year ended Sept. 30. Scotts Miracle-Gro said it’s also talking to lenders about increasing its debt levels beyond 4.5 times its earnings before interest, taxes, depreciation and amortization (Ebitda) and up to 6.5 times Ebitda. Scotts Miracl-Gro now projects a drop of 12% to 13% in its SG&A expenses for 2022.

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