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Scotts Miracle - Gro ScottsMiracle - Gro Announces Record Third Quarter Financial Results ; Reaffirms Sales and Earnings Guidance for Fiscal 2021 August 4 , 2021 Company announces acquisition to bolster the Hawthorne portfolio • Company - wide third quarter sales increase 8 % driven by Hawthorne growth of 48 % U.S. Consumer sales decline 4 % in Q3 ; Remain 19 % higher year - to - date • Consumer POS dollars up 4 % entering August driven by POS unit growth of 8 % • Q3 GAAP EPS increases 12 % to $ 4.00 ; Non - GAAP adjusted EPS up 5 % to $ 3.98 • ● HydroLogic acquisition will add approximately $ 20 million in sales MARYSVILLE , Ohio , Aug. 04 , 2021 ( GLOBE NEWSWIRE ) -- The Scotts Miracle - Gro Company ( NYSE : SMG ) , the world's leading marketer of branded consumer lawn and garden as well as indoor and hydroponic growing products , today announced company - wide third quarter sales growth of 8 percent driven by a 48 percent increase in the Hawthorne segment . The Company reaffirmed its full - year guidance for its U.S. Consumer and Hawthorne segments as well as its outlook for adjusted earnings per share . Separately , the Company announced a further strengthening of the Hawthorne Gardening Company portfolio with the acquisition of HydroLogic Purification Systems , a leading provider of products , accessories and systems for water filtration and purification . HydroLogic will add approximately $ 20 million in annualized sales . " Our results in the third quarter continue to speak to the strength of our brands and the execution of our strategy , " said Jim Hagedorn , chairman and chief executive officer . " Despite difficult year - over - year comparisons , we saw record Q3 sales at Hawthorne with growth in all categories . Our U.S. Consumer business continued to excel despite a modest decline in sales compared with last year's record levels . " Even in the face of increasing distribution and commodity costs that are putting pressure on our gross margin rate , we remain on track to deliver the updated full - year guidance we provided in early June , which would result in both record sales and adjusted earnings . " Third quarter details For the period ended July 3 , 2021 , company - wide sales increased 8 percent to $ 1.61 billion . U.S. Consumer segment sales declined 4 percent to $ 1.05 billion from $ 1.09 billion . Hawthorne segment sales increased 48 percent to $ 421.9 million compared with $ 285.7 million . Due to the Company's fiscal calendar , the third quarter of 2021 began six days later than the third quarter of fiscal 2020 , and those six days fell during the peak lawn and garden selling season . The impact of the shift was a decline in sales for the quarter of approximately $ 115 million on a company - wide basis . Segment income decreased 16 percent for U.S. Consumer to $ 264.4 million and improved 37 percent for Hawthorne to $ 51.9 million . " Hawthorne saw growth in every product category and every major geographic market , " Hagedorn said . " We continue to enjoy tremendous success , especially with our signature brands , as growers see the benefit of our innovation and full - service approach . North America lighting continues to be a strong driver of growth with sales up 77 percent in the quarter . Nutrient sales increased 54 percent , and growing media improved 33 percent . More importantly , our brands - Gavita , General Hydroponics , Mother Earth and Botanicare - significantly outperformed our distributed brands in each of their respective categories . " In the U.S. Consumer business , consumer purchases of our products , as measured in dollars , declined 1 percent in the quarter but remain up 4 percent on a year - to - date basis . As measured in units , which aligns more closely with our sales and is a more accurate reflection this year of consumer engagement , POS was up 5 percent in the quarter and is up 8 percent year - to - date . " For the quarter , the company - wide GAAP and non - GAAP adjusted gross margin rates were 30.7 percent and 30.8 percent , respectively . Both compare to 35.3 and 36.1 percent , respectively , in the prior year . The declines were due primarily to higher distribution and commodity costs as well as segment mix due to the growth in the lower - margin Hawthorne segment . Those pressures were partially offset by higher pricing . SG & A decreased 18 percent to $ 194.1 million primarily due to lower accruals for annual incentive compensation payments . Interest expense increased $ 1.6 million on a year - over - year basis to $ 21.9 million , driven by an increase in borrowings . The Company said its debt - to EBITDA ratio at the end of the quarter was approximately 2.19 times . GAAP income from continuing operations was $ 229.8 million , or $ 4.00 per diluted share , compared with $ 204.3 million , or $ 3.57 per diluted share , in the prior year . Non - GAAP adjusted earnings , which exclude impairment , restructuring and other non - recurring items , were $ 228.6 million , or $ 3.98 per diluted share , compared with $ 216.8 million , or $ 3.80 per diluted share . Year - to - date details Company - wide sales for the first nine months increased 29 percent to $ 4.19 billion compared with $ 3.24 billion a year ago . Sales in the U.S. Consumer segment increased 19 percent , to $ 2.83 billion . Hawthorne sales increased 60 percent to $ 1.10 billion . The GAAP gross margin rate on a year - to - date basis was 32.1 percent . The non - GAAP adjusted rate was 32.6 percent . These compare with 34.9 and 35.4 percent , respectively , last year . The reasons for the year - to - date decline are consistent with the factors that drove third quarter results with the added benefit of improved fixed cost leverage . SG & A was $ 582.3 million , a 5 percent increase from 2020 , driven primarily by higher investment in both U.S. Consumer and Hawthorne offset by lower year - to - date accruals for variable compensation .