Scotts Miracle-Gro Co. (NYSE:SMG) announced its financial results for fiscal first quarter with company-wide sales in the quarter decreased 24% to $566.0 million, down 24% from $748.6 million a year ago.
The company also announced plans to restructure its hydroponic subsidiary Hawthorne after sales dropped following quarters of huge growth.
Jim Hagedorn, Scotts' CEO said the company is weighing the benefits of cost savings and contributions from Hawthorne’s management team against the unit’s appeal to investors seeking a stand-alone cannabis company, reported Market Watch.
Cory Miller, CFO said the consolidation has been under consideration for months. “As important, the consolidation of our manufacturing footprint is expected to dramatically lower the per-unit price of some of our most important LED lighting fixtures, which we believe will strengthen Hawthorne’s competitive position in the years to come.”
The company’s move into the cannabis market will become more clear in the coming weeks. The firm said it would spend about $200 million on acquisitions in its current fiscal year.
“We have been encouraged in recent weeks to see a decline in several key raw material inputs, which seeds a level of cautious optimism that the pressure we’ve been dealing with for the past year may finally be easing,” Miller added.
Photo by Damir Spanic on Unsplash.
