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How is Central Garden & Pet (CENT) Placed Before Q3 Earnings?

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Central Garden & Pet Company CENT is likely to post a bottom-line decrease when it reports third-quarter fiscal 2021 results on Aug 4, after the closing bell. The Zacks Consensus Estimate for quarterly earnings is currently pegged at 99 cents, which indicates a decline of around 25% from $1.32 earned in the year-ago quarter. The consensus mark has also moved 2 cents south in the past 30 days.

However, this renowned player in the garden and pet industries has a trailing four-quarter earnings surprise of 227.7%, on average.

The Zacks Consensus Estimate for revenues is pegged at $954.3 million for the fiscal third quarter. The estimate suggests an increase of above 14% from the year-ago quarter’s reported figure.

Keys Aspects to Note

Central Garden & Pet has been witnessing escalated SG&A expense for a while now. Higher selling and delivery expense on increased payroll-related costs, and selling and delivery expenses stemming from the recent acquisitions in the Garden unit are both concerning.

Headwinds, such as increase in labor and freight costs as well as key commodity prices are most likely to have eroded margins in the quarter under review. Any deleverage in such expenses, might have weighed on the company’s bottom-line performance in the third quarter of fiscal 2021. Again, in supply chain, the company might have experienced increased operational and logistics costs in the fiscal third quarter.

On the flip side, Central Garden & Pet continues to strengthen its position in the pet supplies, and lawn and garden supplies space. The company has also been developing new products, advancing digital capabilities, optimizing supply chain and focusing on its marketing activities for sometime now. Its Central-to-Home strategy bodes well too.

The company is also experiencing consistent strength across both its Pet and Garden units. While the pet unit is gaining from strong sales of dog and cat, distribution and small animal supplies, its garden unit is benefiting from growth in distribution, fertilizers and controls, wild bird feed and grass seed categories. The Zacks Consensus Estimate for sales in the fiscal third quarter at the Pet and Garden segments is currently pegged at $426 million and $504 million, respectively, suggesting an increase of 3.1% and 20% each. These factors along with contributions from the recent buyouts might have bolstered the top line in the to-be-reported quarter.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Central Garden & Pet this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Central Garden & Pet Company Price and EPS Surprise

Central Garden & Pet Company Price and EPS Surprise
Central Garden & Pet Company Price and EPS Surprise

Central Garden & Pet Company price-eps-surprise | Central Garden & Pet Company Quote

Although Central Garden & Pet has an Earnings ESP of +3.69%, it has a Zacks Rank #4 (Sell) that leaves surprise prediction inconclusive.

Stocks Poised to Beat Earnings Estimates

Here are some companies you may want to consider as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

Chewy CHWY has an Earnings ESP of +20.00% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Under Armour UAA currently has an Earnings ESP of +35.38% and a Zacks Rank #3.

Ralph Lauren RL currently has an Earnings ESP of +2.30% and a Zacks Rank of 3.

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Ralph Lauren Corporation (RL) : Free Stock Analysis Report

Central Garden & Pet Company (CENT) : Free Stock Analysis Report

Under Armour, Inc. (UAA) : Free Stock Analysis Report

Chewy Inc. (CHWY) : Free Stock Analysis Report

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