Q2 income, sales rise for Scotts
Scotts Miracle-Gro reported a strong second quarter ended March 29, driven by strong sell-in of its consumer products in the United States and Europe.
Adjusted income from continuing operations increased 38% to $136.7 million from $99.3 million in the prior-year quarter. This growth was driven by increased sales, continued margin expansion and strong control of operating expenses.
Net sales were $1.08 billion for the quarter, up 7% from $1.01 billion a year ago, due to strong initial sell-in to retailers.
"It should come as no surprise that consumer activity was lighter than we had originally anticipated, but we have seen high levels of consumer purchases when the weather has cooperated," said Jim Hagedorn, chairman and CEO. "We are pleased with the strong support we are seeing from our retail partners and glad to see a strong start to the season in Europe, where our business is currently trending ahead of our internal expectations.
Sales in the Global Consumer segment increased 9% to $1.05 billion during the second quarter, compared with $962.8 million during the same quarter a year ago.
Scotts LawnService sales were down 12% to $28.9 million in the second quarter, compared with $32.9 million a year ago, primarily due to a delay in the start of the spring season.
Net sales for the first six months of fiscal 2014 were $1.27 billion, an increase of 6% from $1.20 billion a year ago. The year-over-year change was attributable to increased sales in the Global Consumer segment, primarily due to strong retailer support, targeted pricing and the acquisition of the Tomcat business. For the first six months of the year, Scotts LawnService sales were down 3%.
Adjusted income from continuing operations was $71.1 million for the first six months of the year, compared with $30.8 million during the same period a year ago.
Lifetime Brands posts strong Q1
Lifetime Brands, a leading global provider of branded kitchenware, tableware and other products used in the home, is seeing the results of its aggressive growth strategy — which included the acquisition of four businesses during the period — in the first quarter ended March 31.
Consolidated net sales for the quarter were $118.4 million, soaring 20% from $98.7 million for the corresponding period in 2013.
Consolidated net sales for the company’s wholesale segment were $113.8 million, another two-digit increase, of 22.2% this time, compared to net sales of $93.1 million for the corresponding period in 2013. Consolidated net wholesale sales in the 2014 period included $17.1 million of net sales from Kitchen Craft and other acquisitions that were completed in the first quarter of 2014.
In January, the company acquired Thomas Plant (Birmingham) Limited. Trading as Kitchen Craft, Thomas Plant is one of the United Kingdom’s leading suppliers of kitchenware products and accessories. The company’s broad ranges of housewares products are marketed under what chairman and CEO Jeffrey Siegel called “well-known proprietary, customer-exclusive and private label brands” to more than 2,600 retailers in the U.K. and in upwards of 70 countries worldwide.
In February, the company purchased the intellectual property and certain assets of Built NY, a designer and distributor of lunch boxes, wine bags and baby accessories.
“The acquisition of Built brings us new and exciting product classifications and provides us access to a broad base of independent retailers in more than 60 countries worldwide,” said Siegel.
Also in February, the company acquired the intellectual property and certain assets of Empire Silver Company, a U.S. manufacturer of sterling silver and pewter gift items, principally baby cups, rattles and hollowware.
In March, it purchased the business and certain assets of La Cafetière, a supplier of products to brew and serve coffee and tea; further broadening the company’s product classifications and strengthening its presence in the U.K. and Continental Europe.
Of these acquisitions, only Kitchen Craft recorded any significant revenues during the first quarter. However, Siegel expects all four to be running smoothly in the second half of the year and to add more than $75 million in net sales and significantly to increase the company’s net income and diluted earnings per share in 2014.
“In addition, we will begin supplying kitchenware products to almost 400 Walmart stores in China in the second half of this year,” added Siegel. “On our last conference call, we stated that, for all of 2014, we foresaw sales increasing by approximately 5% organically and approximately 15% from acquisitions, to a total of approximately $600 million. Today, we are reaffirming that guidance.”