June 12, 2012 / 9:08 PM / 5 years ago

Weak gardening trends dampen Scotts Miracle-Gro outlook

2 Min Read

(Reuters) - Scotts Miracle-Gro Co (SMG.N) said it would fall short of its full-year outlook as demand for its potting soil and plant seeds failed to take off during the peak gardening season in the United States, sending its shares down 17 percent.

Sales at its largest retail partners in the U.S. grew 3 percent year-to-date, down from an 8 percent growth recorded entering May, said the lawn and garden products maker.

Scotts Miracle-Gro, which traditionally benefits from the gardening season in mid- to late May, said sales did not meet expectations.

The company, which sells everything from grass seeds and fertilizers to related tools through retailers, had earlier forecast sales to grow between 6 percent and 8 percent and adjusted earnings of $2.65 to $2.85 per share for fiscal 2012.

Slowdown at its European business due to poor weather and challenging economic conditions will also affect results, the Marysville, Ohio-based company said.

The company also warned gross margin rates will likely miss expectations due to an unfavorable product mix and unplanned distribution costs.

In May, Scotts Miracle-Gro had warned that it would miss gross margin forecast for the year due to rising material and distribution costs and higher promotional spends.

Shares of the company were down at $36 in after-market trading. They had closed at $43.05 on Tuesday on the New York Stock Exchange.

Reporting by Durba Ghosh, Arpita Mukherjee in Bangalore; Editing by Joyjeet Das

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