SHAREHOLDER LAWSUIT REMINDER: Faruqi & Faruqi, LLP investigates claims on behalf of Scotts investors

James (Josh) Wilson, securities litigation partner at Faruqi & Faruqi, LLP, encourages investors who suffered losses in excess of $100,000 in Scotts to contact him directly to discuss their options

If you have suffered losses of over $100,000 on Scotts between November 3, 2021 and August 1, 2023 and would like to discuss your legal rights, call Faruqi & Faruqi Partner Josh Wilson direct at 877-247-4292 or 212-983-9330 (extension 1310). For more information you can also click here: www.faruqilaw.com/SMG.

New York, New York–(Newsfile Corp. – July 2, 2024) – 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 Deadline 5 August 2024 to serve as lead plaintiff in a federal securities class action lawsuit filed against the Company.

Faruqi & Faruqi is a leading national securities law firm with offices in New York, Pennsylvania, California and Georgia. Since its founding in 1995, the firm has recovered hundreds of millions of dollars for investors. See www.faruqilaw.com.

As detailed below, the complaint alleges that the Company and its officers violated federal securities laws by making false and/or misleading statements and/or failing to disclose: the Company’s inventory levels, compliance with its credit covenants, and financial performance. Specifically, Defendants repeatedly assured investors that the Company’s inventory levels were adequate while attributing heavy sales to “selling off expensive inventory” resulting in “peak sales” and “record deliveries.” Defendants also repeatedly assuaged investor concerns about the Company’s debt by stating that they were “optimistic that we will remain within our bank covenants” and “foresee no issues with compliance with leverage covenants in the future.” As a result of these misrepresentations, Scotts’ common stock traded at artificially inflated prices during the Class Period.

The truth came to light on June 8, 2022, when Scotts admitted that its U.S. retailers’ reorders were more than $300 million below target in the month of May alone. The company told investors that 2022 annual profit would be about half of what it had previously forecast. The company also announced plans to take on additional debt to cover restructuring costs in an effort to cut costs.

In response to these disclosures, the price of Scotts common stock decreased 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 announced that quarterly revenue declined 6% in the fiscal third quarter and gross margins declined 420 basis points. The company also cut its fiscal year EBITDA guidance by a whopping 25% and announced a $20 million write-down for “pandemic-related excess inventory.” The company also announced that it had to change its debt covenants to 7.00 times debt-to-EBITDA from a previous ratio of 6.25 times.

These disclosures caused the price of Scotts common stock to decrease 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 will be the investor with the greatest financial interest in the relief sought by the class, who is reasonable and typical of class members, and who will direct and oversee the litigation on behalf of the putative class. Any member of the putative class may, through counsel of his or her choosing, ask the court to serve as lead plaintiff, or he or she may choose to do nothing and remain an absent class member. Your ability to share in any relief will not be affected by your decision to serve as lead plaintiff.

Faruqi & Faruqi, LLP also encourages anyone with information regarding Scotts’ conduct, including whistleblowers, former employees, shareholders and others, to contact the firm.

Learn more about the Scott’s Class action lawsuit, go to www.faruqilaw.com/SMG or Call Faruqi & Faruqi Partner Josh Wilson direct at 877-247-4292 or 212-983-9330 (extension 1310).

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To view the original version of this press release, please visit https://www.newsfilecorp.com/release/215118