Scotts Miracle-Gro developed a Super Bowl ad for the first time in the company’s history, aiming to build on the momentum it gained during the coronavirus pandemic, CEO Jim Hagedorn told CNBC on Wednesday.
“We got about 20 million new customers at Covid last year and the goal is to keep them and grow the market,” said Hagedorn at “Power Lunch”. “We think we can do that, and the Super Bowl is part of the reach we want – to reach people who have been and to convince them to stay.”
Scotts Miracle-Gro’s commercial is scheduled to air during the second quarter of Sunday’s NFL championship game between the Kansas City Chiefs and the Tampa Bay Buccaneers. The ad is 45 seconds long and features a number of high-profile celebrities, including businesswoman 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 business driven by the pandemic. Chipotle, used car retailer Vroom and e-commerce company Mercari are new to advertising during the biggest game in the NFL.
Scotts Miracle-Gro saw an influx of customers during the Covid crisis, when people stayed at home and started farming. Hawthorne Gardening, its cannabis subsidiary, was also helped by the pandemic, said Hagedorn. “Covid made people smoke more marijuana. That’s for sure.”
Scotts Miracle-Gro, based in Marysville, Ohio, recorded record sales in its fiscal year 2020 and on Wednesday reported a first-quarter profit for the first time. The company typically experiences losses in these quarters due to the seasonality of the lawn and garden industry.
Sales for the quarter ended January 2 were $ 748.6 million, an increase of 105% year on year. Scotts Miracle-Gro achieved diluted earnings per share of 43 cents in the quarter, compared to a loss of $ 1.28 per share in the same quarter last year.
Scotts Miracle-Gro shares rose 5.1% on Wednesday to $ 240.17 and registered an all-time intraday high of $ 250 each. The stock has risen almost 94% in the last 12 months.
CEO confident of more growth ahead
Close-up of a bag with Miracle-Gro Potting Mix logo for gardening, San Ramon, California, May 19, 2020.
Smith Collection | Cattle | Photo archive | Getty Images
Hagedorn said he sees continuous tail winds for Scotts Miracle-Gro in its two main business segments. “Our research shows that 85% of the people who participated in lawn and garden last year intend to do this again, and a large group intends to do even more,” said the CEO. “We are very comfortable that we can expand business this year,” he added.
And on the cannabis side, Hagedorn said that Hawthorne Gardening is “really on fire”. First quarter sales of $ 309.4 million increased 71% year on year, based on 61% revenue growth in fiscal 2020.
“We are innovating. Much of this growth is happening in areas where we are applying a lot of technology, for example, LED lighting for indoor crops,” said Hagedorn, adding that he is optimistic about the prospect of additional recreational legalization across NOS
New Jersey voters agreed to legalize marijuana in the state in the November election and supporters are pushing for legalization in Pennsylvania and New York. “If you visit Pennsylvania, New Jersey and New York, this is as big as the state of California,” said Hagedorn. “California is almost half of our business, so the East Coast is really happening and it’s great to see.”