Kirby McInerney LLP Announces the Filing of a Securities Class Action on Behalf of Scotts Miracle-Gro Company (SMG) Investors

Business Wire 11-Jun-2024 5:56 PM

The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Southern District of Ohio on behalf of those who acquired The Scotts Miracle-Gro Company ("Scotts Miracle-Gro" or the "Company") (NYSE:SMG) securities during the period of November 3, 2021 and August 1, 2023, inclusive ("the Class Period"). Investors have until August 2, 2024 to apply to the Court to be appointed as lead plaintiff in the lawsuit.

[Click here to learn more about the class action]

On June 8, 2022, Scotts Miracle-Gro issued a press release admitting that replenishment orders from its U.S. retailers were more than $300 million below target in the month of May. The Company told investors that its full-year 2022 earnings would be roughly half its prior guidance and announced plans to take on additional debt to cover restructuring charges. On this news, the price of Scotts Miracle-Gro shares declined by $9.05 per share, from $102.18 per share on June 7, 2022, to close at $97.13 per share on June 8, 2022.

On August 2, 2023, Scotts Miracle-Gro issued a press release announcing its financial results for its fiscal year 2023 third quarter ended July 1, 2023. In the press release, the Company disclosed that it had amended its debt covenants, with the most significant amendment being that the Company had to modify its debt covenants to permit a 7.00 times debt-to-EBITDA ratio, from the original covenant that only permitted a 6.25 times debt-to-EBITDA ratio. The same day, Scotts Miracle-Gro held earnings call to discuss the Company's financial results. Scotts Miracle-Gro revealed that quarterly sales for its fiscal third quarter had declined by 6%, and gross margins fell by 420 basis points. The Company also slashed fiscal year EBITDA guidance by 25% and announced a $20 million write down for "pandemic driven excess inventories." On this news, the price of Scotts Miracle-Gro shares declined by $13.58 per share, or approximately 19%, from $71.44 per share on August 1, 2023, to close at $57.86 per share on August 2, 2023.

According to the lawsuit, Scotts Miracle-Gro had an oversupply of inventory that exceeded consumer demand. Scotts Miracle-Gro executives engaged in a scheme to saturate the Company's sales channel with more product than those retailers could sell through to end users, a practice that required Scotts Miracle-Gro sales personnel to pressure retailers to purchase more inventory than they wanted or needed.

If you purchased or otherwise acquired Scotts Miracle-Gro securities, have information, or would like to learn more about this investigation, please contact Thomas W. Elrod of Kirby McInerney LLP by email at investigations@kmllp.com, or by filling out this CONTACT FORM, to discuss your rights or interests with respect to these matters without any cost to you.

Kirby McInerney LLP is a New York-based plaintiffs' law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm's efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP's website.

This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

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