Scotts Miracle-Gro recently released its 10-K report, revealing key insights into the company's financial performance and operations. The company operates through three segments: U.S. Consumer, Hawthorne, and Other, offering lawn care products, gardening and landscape products, and hydroponic products under various well-known brand names. The U.S. Consumer and Other segments make Scotts Miracle-Gro the leading manufacturer and marketer of branded consumer lawn and garden products in North America. The Hawthorne segment focuses on indoor and hydroponic gardening and is a leading provider of nutrients, lighting, and other materials in North America.
The company's net sales for fiscal 2024 were $3,552.7 million, almost unchanged from fiscal 2023. However, this represented a 9.5% decrease from fiscal 2022. The decrease in net sales for fiscal 2023 as compared to fiscal 2022 was primarily driven by decreased sales volume across all segments and the unfavorable impact of foreign exchange rates. The company's cost of sales for fiscal 2024 was $2,702.2 million, down from $2,894.0 million in fiscal 2023. This decrease was primarily driven by lower warehousing and transportation costs, lower material costs, lower sales volume in the Hawthorne segment, and a decrease in impairment, restructuring, and other charges.
During fiscal 2022, the company began implementing organizational changes and initiatives to create operational and management-level efficiencies. These efforts delivered run-rate annualized savings of more than $300.0 million, increasing the gross margin rate and lowering selling, general, and administrative expenses. However, the Hawthorne segment experienced adverse financial results primarily due to decreased sales volume attributed to an oversupply of cannabis, leading to a prolonged period of lower cannabis wholesale prices and reduced indoor and outdoor cannabis cultivation. The company also recorded non-cash, pre-tax other-than-temporary impairment charges related to its convertible debt investments and investment in Bonnie Plants, LLC during fiscal 2024.
It's clear from the 10-K report that Scotts Miracle-Gro faced challenges such as decreased sales volume, cost inflation, and uncertain macroeconomic and geopolitical conditions. The report provides a detailed breakdown of the company's financial performance, including net sales, cost of sales, and the factors contributing to changes in these figures. Following these announcements, the company's shares moved -4.6%, and are now trading at a price of $77.96. If you want to know more, read the company's complete 10-K report here.
