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Scotts Miracle-Gro (SMG) to Post Q2 Earnings: What's in Store?

The Scotts Miracle-Gro Company SMG is set to release second-quarter fiscal 2020 results on May 6, before the opening bell.

The company has a trailing four-quarter positive earnings surprise of 6.6%, on average. The quarterly results are likely to reflect the benefits of higher demand from U.S. Consumer and Hawthorne businesses. 

The stock has rallied 34.6% in the past year against the industry’s 35% decline.



Let’s see how things are shaping up for this announcement.

What the Zacks Model Says

Our proven model predicts an earnings beat for Scotts Miracle-Gro this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. 

Earnings ESP: Earnings ESP for Scotts Miracle-Gro is +1.49%. The Most Accurate Estimate and the Zacks Consensus Estimate are currently pegged at $4.10 and $4.04, respectively. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Scotts Miracle-Gro currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

What to Expect  

In March, the company reported preliminary results for second-quarter fiscal 2020 (ending Mar 28, 2020).

Scotts Miracle-Gro expects company-wide sales to rise 16-17% year over year in the fiscal second quarter. Sales in the U.S. Consumer and Hawthorne units are expected to increase around 12% and at least 55% in the quarter, respectively.

In the U.S. Consumer division, the company has witnessed a sharp rise in demand in March, which is expected to have boosted consumer purchases by around 25% in the fiscal second quarter. Moreover, purchases of soil and insect control rose roughly 35% and 45% in March, respectively.

The company stated that the demand for its U.S. Consumer and Hawthorne businesses has witnessed a surge, particularly in edible gardening, professional growing and pest-control-focused categories. Notably, the company witnessed increased demand in all areas of the business during March.

Q2 Estimates

The Zacks Consensus Estimate for fiscal second-quarter revenues is currently pegged at $1,309 million, which suggests a 10% rise year over year.

The Zacks Consensus Estimate for fiscal second-quarter sales in the Hawthorne segment is currently pegged at $223 million, which calls for a 54.9% increase from the year-ago quarter's reported figure.

Other Stocks Likely to Beat Estimates

Here are some other companies that you may want to consider as our model shows that they also have the right combination of elements to post an earnings beat this time around.

Wheaton Precious Metals Corp. WPM, scheduled to release first-quarter 2020 results on May 6, has an Earnings ESP of +0.39% and carries a Zacks Rank #2.

Domtar Corporation UFS, slated to release first-quarter 2020 results on May 8, has an Earnings ESP of +39.81% and carries a Zacks Rank #3.

FMC Corporation FMC, scheduled to release first-quarter 2020 earnings on May 5, has an Earnings ESP of +0.56% and carries a Zacks Rank #3. 

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FMC Corporation (FMC): Free Stock Analysis Report
 
The Scotts Miracle-Gro Company (SMG): Free Stock Analysis Report
 
Domtar Corporation (UFS): Free Stock Analysis Report
 
Wheaton Precious Metals Corp. (WPM): Free Stock Analysis Report
 
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