Scotts Miracle-Gro stock gains after narrower-than-expected loss, sales fell less than forecast

Shares of Scotts Miracle-Gro Co. SMG, -0.49% rose 2.1% in premarket trading, after the lawn care and indoor and hydroponic growing products company reported a narrower-than-expected fourth-quarter loss and revenue that topped forecasts, as a big beat in its U.S. Consumer business offset a Hawthorne miss. For the quarter to Sept. 30, the company swung to a net loss of $47.8 million, or 86 cents a share, from income of $3.9 million, or 7 cents a share, in the year-ago period. Excluding nonrecurring items, the adjusted per-share loss of 82 cents beat the FactSet loss consensus of 87 cents. Sales declined 17.1% to $737.8 million but was above the FactSet consensus of $680.8 million. U.S. Consumer sales fell 28% to $369.4 million but was well above expectations of $268.7 million, while Hawthorne sales slipped 2% to $329.1 million and missed expectations of $362.3 million. The company said over-supply of cannabis in California pressured Hawthorne's results. "Commodity prices were a headwind throughout fiscal '21 but were partially offset in the quarter by price increases in our U.S. Consumer segment that took effect in August," said Chief Financial Officer Cory Miller. "We have communicated to our retail partners that we will take additional pricing actions effective in January as we continue to battle higher costs from urea, resin, grass seed and other commodities." The stock has tumbled 16.8% over the past three months through Tuesday, while the S&P 500 SPX, +0.37% has gained 4.7%.