Scotts Miracle-Gro developed a Super Bowl advertisement for the first time in the company’s history as it looks to build off the momentum it gained during the coronavirus pandemic, CEO Jim Hagedorn told CNBC on Wednesday.
“We got about 20 million new customers in Covid time last year and the goal is to keep them and grow the market,” Hagedorn said on “Power Lunch.” “We think we can do that, and the Super Bowl is a part of the reach we want — to reach out to people who were in and convince them to stay in.”
Scotts Miracle-Gro’s commercial is set to run during the second quarter of Sunday’s NFL championship game between the Kansas City Chiefs and Tampa Bay Buccaneers. The ad is 45 seconds long and features numerous high-profile celebrities such as entrepreneur Martha Stewart, actor John Travolta and NASCAR driver Kyle Busch. It focuses on the company’s lawn and garden segment.
Scotts Miracle-Gro is not the only brand this year running a Super Bowl commercial for the first time, and many of the new entrants have also seen their businesses boosted by the pandemic. Chipotle, used-car retailer Vroom and e-commerce company Mercari are all newcomers to advertising during the NFL’s biggest game.
Scotts Miracle-Gro saw an influx of customers during the Covid crisis as people stayed home and picked up gardening. Hawthorne Gardening, its cannabis subsidiary, also was aided by the pandemic, Hagedorn said. “Covid has caused people to smoke more pot. That’s for sure.”
Scotts Miracle-Gro, based in Marysville, Ohio, tallied record sales in its fiscal 2020 and on Wednesday reported a first-quarter profit for the first time. The company has typically experienced losses in those quarters due to the seasonality of the lawn and garden industry.
Sales for the quarter ended Jan. 2 were $748.6 million, up 105% year over year. Scotts Miracle-Gro saw diluted earnings per share of 43 cents for the quarter, compared with a loss of $1.28 per share in the same quarter last year.
Shares of Scotts Miracle-Gro rose 5.1% on Wednesday to $240.17 and recorded an all-time intraday high of $250 apiece. The stock is up nearly 94% in the past 12 months.
CEO confident in more growth ahead
Close-up of bag with logo of Miracle-Gro Potting Mix for gardening, San Ramon, California, May 19, 2020.
Smith Collection | Gado | Archive Photos | Getty Images
Hagedorn said he sees continued tail winds for Scotts Miracle-Gro in its two main business segments. “Our polling shows like 85% of people who participated in lawn and garden last year intend to do it again, and a big group of that intend do it even bigger,” the CEO said. “We’re really comfortable we can grow the business this year,” he added.
And on the cannabis side, Hagedorn said Hawthorne Gardening is “really catching fire.” First-quarter sales of $309.4 million were up 71% year over year, building on the 61% revenue growth in fiscal 2020.
“We’re innovating. A lot of that growth is happening in areas where we’re putting a lot of technology, for instance LED lighting for indoor grows,” Hagedorn said, adding that he’s optimistic about the prospect of further recreational legalization across the U.S.
New Jersey voters agreed to legalize marijuana in the state in the November election, and advocates are pushing for legalization in Pennsylvania and New York. “If you see Pennsylvania, New Jersey and New York go, that’s as big as the state of California,” Hagedorn said. “California is nearly half our business, so the East Coast is just really happening and it’s great to see.”
