DEADLINE ALERT: Faruqi & Faruqi, LLP Investigates Claims on Behalf of Investors of Scotts
Faruqi & Faruqi, LLP Securities Litigation Partner James (Josh) Wilson Encourages Investors Who Suffered Losses Exceeding $100,000 In Scotts To Contact Him Directly To Discuss Their Options
If you suffered losses exceeding $100,000 in Scotts between June 2, 2021, and August 1, 2023 and would like to discuss your legal rights, call Faruqi & Faruqi partner Josh Wilson directly at 877-247-4292 or 212-983-9330 (Ext. 1310). You may also click here for additional information: www.faruqilaw.com/SMG.
NEW YORK, Aug. 02, 2024 (GLOBE NEWSWIRE) -- Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential claims against The Scotts Miracle-Gro Company (“Scotts” or the “Company”) (NYSE: SMG) and reminds investors of the August 5, 2024 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the Company.
Faruqi & Faruqi is a leading national securities law firm with offices in New York, Pennsylvania, California and Georgia. The firm has recovered hundreds of millions of dollars for investors since its founding in 1995. See www.faruqilaw.com.
As detailed below, the complaint alleges that the Company and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose that: (1) Scotts had an oversupply of inventory that far exceeded consumer demand prior to the start of the Class Period; (2) Defendants engaged in a channel-stuffing scheme to saturate the Company's sales channel with more product than those retailers could sell through to consumers; (3) Scotts was only able to satisfy its debt covenants through its channel-stuffing scheme; and (4) as a result of the above, Defendants' positive statements about the Company's business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.
The Class Period begins on June 2, 2021. After the close of the markets on June 1, 2021, Scotts issued a press release announcing it had "increased sales and earnings guidance for fiscal 2021 based on the continued strength of both its U.S. Consumer and Hawthorne segments" and that the Company now expected "company-wide sales growth of 17 to 19 percent. " The following day, during the William Blair & Company 41st Annual Growth Stock Conference on June 2, 2021, CFO Miller provided additional commentary on the increased guidance and reiterated that, despite prior seasonality issues, "we're still raising our guidance . . . on sales in both the U.S. Consumer business and Hawthorne." CFO Miller then explained that the Company "now expect[s] growth of 7% to 9% in the U. S. Consumer business versus a previous guidance range of 4% to 6%." For Hawthorne, CFO Miller highlighted that Scotts "now expect[s] growth of 40% to 45% versus a previous range of 30% to 40%."
The truth began to emerge on June 8, 2022, when Scotts admitted that replenishment orders from its U.S. retailers were more than $300 million below target in the month of May alone. The Company told investors that 2022 full-year earnings would be roughly half of its prior guidance. The Company also announced plans to take on additional debt to cover restructuring charges as it attempted to cut costs.
In response to these disclosures, the price of Scotts common stock declined by $9.05 per share, or nearly 9%, from a closing price of $102.18 per share on June 7, 2022, to a closing price of $93.13 per share on June 8, 2022.
On August 2, 2023, Scotts revealed that quarterly sales for its fiscal third quarter had declined by 6%, and that gross margins fell by 420 basis points. The Company also slashed fiscal year EBITDA guidance by a staggering 25% and announced a $20 million write down of “pandemic driven excess inventories.” The Company also disclosed that it had to modify its debt covenants to 7.00 times debt-to-EBITDA ratio, from the former ratio of 6.25 times debt-to-EBITDA ratio.
These disclosures caused the price of Scotts common stock to decline by $13.58 per share, or 19%, from a closing price of $71.44 per share on August 1, 2023, to a closing price of $57.86 per share on August 2, 2023.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding Scotts’ conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
To learn more about the Scotts class action, go to www.faruqilaw.com/SMG or call Faruqi & Faruqi partner Josh Wilson directly at 877-247-4292 or 212-983-9330 (Ext. 1310).
Follow us for updates on LinkedIn, on X, or on Facebook.
Attorney Advertising. The law firm responsible for this advertisement is Faruqi & Faruqi, LLP (www.faruqilaw.com). Prior results do not guarantee or predict a similar outcome with respect to any future matter. We welcome the opportunity to discuss your particular case. All communications will be treated in a confidential manner.
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/5e848124-9c14-4bab-ba13-256ecec0c433
![](https://ml.globenewswire.com/media/MTFhMjFhZTAtYjU1NS00MWI5LTg1NTktZTBiZjUzY2M0MzY5LTEwMjkyMDk=/tiny/Faruqi-Faruqi-LLP.png)
Legal Disclaimer:
EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.
![](https://www.einpresswire.com/tracking/article.gif?t=2&a=CR_TZyed45gEKAg4&i=kKG3ROiRGzsagyuC)