Scotts Miracle-Gro stock drops after cutting outlook for profit and Hawthorne sales

Shares of Scotts Miracle-Gro Co. dove 3.8% toward a near two-year low in premarket trading Tuesday, after the lawn care company, with its hands in the cannabis business, warned of lower-than-expected full-year profit give a surprise anticipated decline in Hawthorne sales. The company said it now expects fiscal 2022 sales for its Hawthorne business to decline 15% to 25% from a year ago, compared with previously provided guidance for growth of 8% to 12%. The company said Hawthorne sales have been "challenged for several months" because of an oversupply of cannabis. The company said it expects to achieve adjusted earnings per share of "at least" $8.00 for the year, compared with previous guidance provided in November of $8.50 to $8.90. The company also said it no longer expects to make a "significant" acquisition in fiscal 2022, after previously saying it would continue pursuing acquisition opportunities throughout the year. The stock, which closed Monday at the lowest price since May 4, 2020, has dropped 16.4% over the past three months while the S&P 500 has shed 10.6%.

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