The Scotts Miracle-Gro Company said company-wide sales increased 27 per cent in its fiscal first quarter driven by the benefit of recently completed acquisitions and strong consumer demand in the U.S, for the quarter ended December 31, 2016.
Chairman and chief executive officer Jim Hagedorn said: "The strong consumer demand that we saw last summer continued into the fall and gave us an outstanding start to our new fiscal year. As we prepare for the start of another lawn and garden season, we continue to see strong retailer support for our category and for our brands. The strength of the core U.S. business, combined with the continued momentum from the hydroponic businesses in the Hawthorne Gardening Company portfolio, give us great confidence as we enter the season and in the financial guidance that we have provided."
For the fiscal first quarter, the Company reported sales of $246.8 million, up 27 per cent from $194.5 million a year earlier. Sales in the Other segment, which includes The Hawthorne Gardening Company, Canada and Asia Pac businesses, increased 74 per cent to $96.9 million due primarily to the recent acquisitions of Botanicare and Gavita.
US-based Scotts is set to sell its overseas business with private equity buyers having viewed the business in recent months. Plant protection regulations are an increasing issue for growers and home gardeners, with regulations in France and Germany mean making a profit on plant protection products in those countries difficult. Europe Consumer business sales for the previous quarter declined to $37.3 million compared to $43.8 million, with Scotts' purchase of Solus an issue. Scotts subsequently old Solus brand Chapelwood to Smart Garden in September 2016 and Bermuda to Evolution Aqua in December 2016.
Vice president Randy Coleman said he hopes to sell the Europe business by spring: "We maintain our bias to exit the European marketplace, and as we said in the past, we've been marketing this business for some time. We still view this as a good business, and we're not looking to give it away. So anything we do must be based on an attractive valuation. I'm cautiously optimistic we will get something done, but I don't want to commit too much, too soon."
Coleman told investors in a company earnings conference call in November the European arm of Scotts would be attractive to a "strategic or financial buyer" and preliminary discussions have begun with both after "discussions with a potential partner broke down in early spring" 2016 for a European joint venture.
Scotts in the UK launched a Black Magic indoor gardening range to the trade in July 2016. The range is marketed at marijuana growers in states where it is legal in the UK but at indoor fruit and veg growers in the UK.
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