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The Scotts Miracle-Gro Company (NYSE: SMG) Securities Fraud Class Action

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COMPANY       The Scotts Miracle-Gro Company 
COURT United States District Court for the Southern District of Ohio
CASE NUMBER 24-cv-03132
JUDGE The Hon. Algenon L. Marbley
CLASS PERIOD  November 3, 2021 through August 1, 2023


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Case Background:

A class action lawsuit has been filed on behalf of those who purchased or acquired The Scotts Miracle-Gro Company (“Scotts”) (NYSE: SMG) securities between November 3, 2021 and August 1, 2023, both dates inclusive (the “Class Period”).

Scotts produces various lawn, garden, and agricultural products for both consumer and professional purposes and is the world’s largest marketer of branded consumer products for lawn and garden care. 

The Class Period begins on November 3, 2021, the day that Scotts announced its financial results for its fiscal year 2021 fourth quarter and full year ended on September 30, 2021. On that same day, Scotts held an earnings call with analysts and investors to discuss the Company’s financial results. During the call, CEO Hagedorn claimed, “we see a higher level of sustainable growth with our existing brands . . . based largely on our ability to reach a new generation of consumers.” CEO Hagedorn also emphasized that the company “just finished [its] third straight record year and remain extremely optimistic.” Defendant Miller added “as it relates to inventory, we find ourselves in a very good place right now.”

On June 8, 2022, Scotts revealed that replenishment orders from its U.S. retailers were $300 million below target in the month of May alone. Scotts also cut its 2022 full-year earnings guidance by roughly half and announced plans to take on additional debt to cover restructuring charges as it attempted to cut costs. These disclosures came mere weeks after Scotts promised that it was “tracking to do even better” than its guidance. 

On August 2, 2023, Scotts issued a press release announcing its financial results for its fiscal year 2023 third quarter ended July 1, 2023. In the press release, Scotts disclosed that it had amended its debt covenants, including having 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. That same day, Scotts held an earnings call with analysts and investors to discuss the company’s financial results for its fiscal year 2023 third quarter. On the call, Scotts revealed that quarterly sales for its fiscal third quarter had declined by 6%, and gross margins fell by 420 basis points. Scotts also slashed fiscal year EBITDA guidance by a staggering 25% and announced it had to take a $20 million write down for “pandemic driven excess inventories.” Following this news, Scotts common stock declined 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 complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements and omissions concerning the company’s inventory levels, debt covenant compliance, and financial performance. Specifically, Defendants repeatedly assured investors that the company’s inventory levels were appropriate, while attributing strong sales to “selling through high-cost inventory,” which resulted in “peak selling” and “record” shipments. Defendants also repeatedly assuaged investors’ concerns about the company’s debt, stating that they were “optimistic we will remain within the bounds of our bank covenants” and “[did] not see leverage compliance issues going forward.” As a result of these misrepresentations, Scotts common stock traded at artificially inflated prices during the Class Period. 

What is a Lead Plaintiff?

A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case.  Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.

Complete this form with your transactions in The Scotts Miracle-Gro Company securities between November 3, 2021 and August 1, 2023.

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# of Shares
Price per Share
Principal Amount
Amount Paid
Series or CUSIP
# of Contracts
Price per Contract
Exercise Price
Expiration Date
Did you purchase shares of The Scotts Miracle-Gro Company prior to the Class Period?
Are you a current or former employee of The Scotts Miracle-Gro Company ?
The submission of this form does not create an attorney-client relationship, nor an obligation on the part of Kessler Topaz or you to file a lead plaintiff motion in this matter. Any information you submit will be maintained as confidential. If Kessler Topaz, in its sole discretion, believes that you might be an appropriate lead plaintiff candidate, Kessler Topaz will contact you to discuss the matter and whether to establish an attorney client relationship. By signing this form you are authorizing us to contact you regarding this case and/or future cases.
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