...- The Scotts Miracle-Gro Co.'s profitability and credit metrics will weaken significantly in 2022, including S&P Global Ratings-adjusted leverage of about 4.6x compared to 2.6x in 2021. This is because of poor weather, unfavorable mix shift, high inflation affecting its core lawn and garden business, and oversupply in the Hawthorn hydroponics segment. The company and its banks recently amended its credit agreement, including relaxing its leverage covenant while tightening terms around investments and restricted payments. - We affirmed all our ratings on the company, including our '##' issuer credit rating and 'B+' rating on its senior unsecured notes. We believe consumers will continue to spend on lawn and garden products more than they did before the COVID-19 pandemic given the sizable investments made in housing the last few years, albeit well below elevated 2020-2021 levels. We also expect the company to manage the business for cash and pay down debt until it restores leverage to its...
