MARYSVILLE, Ohio (AP) — The Scotts Miracle-Gro Co.'s shares sank more than 15 percent in after-market trading Tuesday after the lawn and garden company said it expects weak sales and an unfavorable product mix to dampen its earnings for the year and the current quarter.
The news sent Scotts' shares plunging more than 15 percent after hours.
Scotts, based in Marysville, Ohio, said the lawn care season started strong and early, but customer demand slowed, and the gardening season, which peaks in mid- to late May, has not met its expectations.
In Europe, poor weather and the tough economy are causing it to fall short, Scotts said.
The company had expected adjusted earnings of $2.65 to $2.85 per share with revenue gains of 6 percent to 8 percent, implying total revenue of $1.12 billion to $1.14 billion. Instead, Scotts said, U.S. consumer purchases of its products have risen only 3 percent from a year ago.
Scotts said it plans to update its forecast when it reports its third-quarter results in August. Analysts already were expecting much lower adjusted profit of $2.26 per share but higher revenue of $1.23 billion.
"While we are clearly disappointed that we will fall short of our plans, there have been several key wins during the season that give us reason to be confident moving forward," Jim Hagedorn, chairman and CEO said in a statement.
The company said purchases of its lawn fertilizer products have increased for the first time in several years. And sales in its mulch and other categories are up. Purchases of its Miracle-Gro branded soils and plant food are similar to 2011, hurt by an industry-wide slowdown in the sale of flower and vegetable plants.
Scotts shares fell $6.49, or 15.1 percent, to $36.56 after hours. They ended regular trading at $43.05, up 60 cents.
