Scotts Miracle-Gro (SMG) stock is falling despite what the company says was a strong second quarter.

Jim Hagedorn, chairman and CEO of Scotts Miracle-Gro, joins Market Domination to discuss the company's earning print. Hagedorn pushes back on the idea of "mixed results," highlighting the company's reaffirmed guidance and consumer sales increase.

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Video Transcript

00:00 Speaker A

Shares of the Scotts Miracle-Gro Company fallen today. That's following mixed results on their second quarter earnings. We're joined now by Jim Hagedorn, Scotts Miracle-Gro Company chairman and CEO. Great to see you, sir, here on set.

00:11 Jim Hagedorn

Hi.

00:12 Speaker A

Let me read this report, sir. I don't think it was a mixed, you know, report.

00:17 Jim Hagedorn

Well, I want you to respond to this because the stock, we're under some pressure here. Um, it did look like you reported Q Q2 sales that may miss consensus, Jim. But I I want you to walk us through this report. I want you to explain to us what you're seeing in the business.

00:32 Jim Hagedorn

Business is fantastic. I mean, our point of sale, which is our sales to consumer at at retail, um, are I think right now, I think we reported for the first half like plus 12.1. Today, it's over 14% ahead of last year in actual POS units um to consumer. Um, we affirmed guidance on sales. Um, and so I I don't know what I I can either blame the street for completely not getting it or say I must be the worst storyteller in the world where we reaffirm guidance. We are beating all of our financial metrics. Um, sales were, if you exclude some one-time sales as we sold some excess inventory last year and discontinued one business, sales were flat, but the first half of the year is nothing but load into the retailers. And so what really matters is replenishment. 60% of our sales happen in the second half of the year. And so, um, you know, just in the last two days, like the POS data got up, you know, our complete sales data was up, I don't know, almost a point and a half just in two days. This is the weather that you guys are complaining about with allergies.

03:07 Speaker A

Well, goodness, it's a blessing and a curse.

03:10 Jim Hagedorn

No, yeah, exactly. But it is gardening season hardcore and business is is great. And so I I have to say I was a bit disappointed, you know, which is we thought this is a blowout sales report, you know. The the consensus numbers were not our numbers anyway. We don't provide, you know, quarterly sales guidance. Um, so it was somebody else's numbers and it's not a number that we manage to. I mean, we're basically managing toward consumer takeaway and then it's a view of kind of where we think we'll end the year inventory-wise at our biggest retailers. And that's a actually a good story for us. So when you hear about like Black and Decker and, you know, Stanley Works and other guys who legitimately I think have issues, we don't have any tariff issues. You know, our biggest import is peat moss, which is exempt from from tariffs. Um, we don't have any pressure in this year or put this way, so minor that it we're not changing our outlook at all. Um, so retailers are trying to look at, I mean, think about this from a retailer point of view. If everything is costing twice as much and they're trying to protect their balance sheet and look at like lawn and garden tends to phase into Halloween. Um, almost all of that is Chinese imports. And so what you're seeing is a real opportunity for them to buy less Halloween stuff and extend the lawn and garden season, which is something we really like, um, because they normally it's kind of artificial where they're getting out in the fall to get set up for um their fall business.

05:54 Speaker A

Mhm.  Related Videos

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