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AeroGrow International, Inc. (OTCMKTS:AERO) Accomplishes Set Goals

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In last trading session, the stock price of AeroGrow International, Inc. (OTCMKTS:AERO) declined more than 3% to close the day at $2.23. The decline came at a share volume of 14,573 compared to average share volume of 28,851.

The buzz

AeroGrow report results for 3Q ended December 31, 2015. For the quarter closed December 31, 2015, the sales jumped to $11.9 million, a jump of 8.3% compared to the same period, a year earlier. Adjusted EBITDA for the reported quarter came at record $1.7 million. The gross margin jumped 720 basis points from 30.5% to 37.7% in the reported period.

J. Michael Wolfe, the CEO and President of AeroGrow, reported that he is extremely delighted with the third quarter results. They planned to achieve 3 major strategic goals during this tough selling period, and they recorded success in execution of all 3 goals.

The goals

The first objective was to continue to expand top line sales, which the company did with huge profits at Amazon.com, up more than 100% compared to last year, robust progress on-line retailers, and in various entries into the housewares market. Its Direct-to-Consumer segment also recorded solid sales growth.

The second goal was to make considerable improvements in gross margin, and AeroGrow achieved that mark with a 720 basis point jump compared to last year. This goal was achieved by cost-outs in supply chain, revised product pricing helping in higher selling costs, and a focus on retail associates with distribution models that permits company to achieve higher margins.

AeroGrow third key objective was to increase the category awareness and general brand of products across targeted consumers. It was achieved by an extensive advertising campaign showcasing a series of new commercials for digital and TV platform. The management said that all these spots created brand awareness and eventually helped through across the direct to consumer, and retail channel.

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