Why Scotts Miracle-Gro Stock Was Moving Higher Today
Shares of Scotts Miracle-Gro (NYSE: SMG) were moving higher today after the lawn-care products company offered an update to its fiscal second-quarter performance this morning. As a result, the stock was up 4.5% as of 12:04 p.m. ET.
Scotts didn't report preliminary results but said it expects a Q2 net debt/EBITDA (earnings before interest, taxes, depreciation, and amortization) leverage ratio in the range of 6, which is below the facility covenant limit of 6.5 for the second quarter. That implies that its trailing EBITDA over the last four quarters is approximately $550 million, as the company finished the fiscal fourth quarter with $3.4 billion in debt.
Investors have been concerned about the company's cash position as its sales fell sharply after a boom during the pandemic, so it's a good sign that it continues to be within its debt covenants. Management credited a disciplined approach to cost control and a focus on efficiency.
Source Fool.com
