Organic growth, value accretive acquisitions and divestment of non-strategic assets have been the key strengths for Central Garden & Pet Company CENT. Additionally, management is revamping both the Pet and the Garden segments. It also has a balanced approach that encompasses improvement in revenues and profits through operational efficiency along with cost reduction.
These attributes have aided the company’s shares to gain 13.6% in the last six months, outperforming the industry’s decline of 9.8% as well as the broader Consumer Discretionary sector’s growth of 8.8%. Analysts polled by Zacks expects first quarter and fiscal 2018 revenues to come in at $433.19 million and $2.09 billion, reflecting an increase of roughly 3.3% and 1.9%, respectively.
Let’s Delve Deeper
Central Garden & Pet has been witnessing solid growth momentum in the Pet segment, which is evident from its ninth successive quarter of organic sales growth in fourth-quarter fiscal 2017. This came on the back of robust performance at the dog & cat businesses. Management intends to enhance market share in the home centers, mass market, grocery, specialty pet store and other independent channels as well. Going forward, it plans to launch several products that appeal to customers and upgrade customer services.
Moreover, the company’s diversified portfolio of brands including major garden and pet supplies products has helped in developing healthy commercial relationships with giant retailers in the United States. Also, Central Garden & Pet’s effective inventory management is aiding it to optimize merchandise levels as well as facilitating in optimum utilization of its working capital.
Central Garden & Pet Vs Industry
Impressively, this Zacks Rank #3 (Hold) company’s gross margin has shown constant improvement since the past five quarters. In the first, second, third and fourth quarters of fiscal 2017, gross margin expanded 110, 90, 10 and 50 basis points to 28.8%, 32.2%, 31.9% and 29.6%, respectively.
Looking for Solid Stocks in the Same Space, Count on These
Some better-ranked stocks in the Consumer Discretionary space include Party City Holdco Inc. PRTY, G-III Apparel Group, Ltd. GIII and PVH Corp. PVH. While Party City Holdco and G-III Apparel sport a Zacks Rank #1 (Strong Buy), PVH Corp. carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Party City Holdco with an impressive long-term earnings growth rate of 21.6% has pulled off an average positive earnings surprise of 9.2% in the trailing four quarters.
G-III Apparel with a long-term earnings growth rate of 15% has delivered an average positive earnings surprise of 6.1% in the last four quarters.
PVH Corp. has a long-term earnings growth rate of 13%. Also, the company’s earnings have outpaced the Zacks Consensus Estimate in each of the trailing four quarters by an average of 2.6%.
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Central Garden & Pet Company (CENT) : Free Stock Analysis Report
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