Hawthorne Gardening To Focus On Profit After Aggressive Market Share Push

The Scotts Miracle-Gro Co. subsidiary is expecting continued growth

Scotts Miracle-Gro Co.’s business supplying the cannabis industry beat sales projections for 2019 but fell short on profitability because of troubles in the California market and deep discounts that helped it grab market share.

Horticulture subsidiary Hawthorne Gardening Co. represented $671.2 million of the Marysville lawn and garden supplier’s record $3.16 billion in sales for the year ended Sept. 30. The company had predicted 2019 sales of $650 million for the segment when it acquired the former Sunlight Supply last year.

The segment’s margin of 8% is less than the 23% for Scotts’ much larger consumer lawn and garden supply business. Leaders pledged to improve Hawthorne profits by 2 percentage points next year, along with sales growth of 12% to 15%.

“The operating group is very confident they can achieve that and continue that into 2021,” CEO Jim Hagedorn said in Wednesday’s conference call with investors.

That effort will be helped by cost-cutting throughout 2019, including closing locations and eliminating duplicate jobs as it integrates $1 billion worth of acquired companies. The acquisitions are now on the same IT platform as the parent and will see other benefits from being part of the larger organization, Hagedorn said.

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