Profits plunge at Scotts Miracle-Gro
Scotts Miracle-Gro, the industry’s largest supplier of lawn and garden products, reported sales of $1.06 billion for its third fiscal quarter, showing little change from sales of $1.05 billion in the same quarter of 2011.
Adjusted income from continuing operations was $99.4 million in the third quarter, a 21.5% drop from adjusted income of $126.7 million for the same period a year ago.
The Marysville, Ohio-based company said consumer purchases of its products at its largest retail partners in the United States declined 5% in the third quarter.
"After a strong start to the season, consumer engagement clearly began to decline in May and June," said Jim Hagedorn, chairman and CEO. "We’re pleased to see strong year-over-year improvement in consumer purchases of mulch and controls, but our fertilizer and growing media categories are flat so far this year and have not delivered the results we expected.”
Hagedorn added that the company will “move as quickly as we reasonably can to restore the level of profitability that our business reported just two years ago.” Part of that strategy, he said, was planned price increases, along with several other initiatives to improve the gross margin rate and reduce expenses.
"While we will continue to evaluate acquisition opportunities, our near-term focus will be on restoring our current business to an appropriate level of profitability, not on integrating something new," Hagedorn said.
Pfister fixtures simplify bathroom projects
Lake Forest, Calif.-based Pfister is rolling out a product designed to make bathroom fixture upgrades easier for the homeowner.
Pfister has launched the first Universal Tub and Shower product in the faucet category, a tub and shower fixture that is compatible with eight different water valves from three of the leading manufacturers in the plumbing industry — Pfister, Moen and Delta.
“Until now, replacing an outdated tub and shower fixture meant homeowners needed a big budget and professional help for a total renovation, or they were limited to finding a replacement that fit the old valve behind the wall. Unfortunately the second option usually meant limited style choices and basic functionality,” said Trent Harrington, senior brand manager, Pfister. “By introducing Universal Tub and Shower, we are giving consumers multiple style and finish options, which coordinate with any décor and that fit several of the leading manufactures valves.”
Pfister’s Universal Tub and Shower comes in traditional and transitional architectural styles and provides three different finish options, including Chrome, Brushed Nickel and Tuscan Bronze.
RONA reports rise in Q2 net earnings
Boucherville, Quebec-based RONA, the Canadian hardware retailer and distributor, saw a distribution sales increase of 8.7% in its second fiscal quarter of 2012, while retail and commercial sales rose 1.8%.
Beginning with the quarter, RONA changed the way it measures comparable-store sales. For the first time, the company is including distribution sales to affiliate dealers, and on that basis, same-store sales rose 1% in the second quarter.
Before the revision, the company had reported seven consecutive quarters of same-store sales declines.
In RONA’s retail and commercial business, same-store sales declined 0.9%. The company attributed the decline to cautious consumers and the mix of products sold.
Excluding unusual items, net earnings rose to C$43.6 million, compared with C$37.0 million in the second quarter of 2011.
In a prepared statement, president and CEO Robert Dutton said the company’s new business strategy, which focuses less on big boxes and more on smaller “proximity” stores, is working.
“The second-quarter results again prove that RONA remains a preferred source for renovation and building contractors and specialists,” Dutton said. “We have, for example, seen 10.5% growth in sales to plumbing specialists, while our affiliate dealers, who count a high percentage of building contractors among their clientele, have increased same-store sales by 11.4%.”
Although the RONA statement referenced the “unsolicited and non-binding proposal [received] from U.S.-based Lowe’s,” it quickly dismissed the offer as “not in the best interests of RONA and its stakeholders.” The proposal was not discussed during the quarterly earnings conference with analysts and investors.