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Central Garden & Pet's (CENT) Buyouts & E-Commerce Fuel Sales

·4 min read

Central Garden & Pet Company CENT has been reinforcing its position in the pet supplies, and lawn and garden supplies space via prudent buyouts. Management has been developing new products, advancing digital capabilities, optimizing supply chain and focusing on marketing activities for a while. CENT is also on track with its Central to Home strategy. Its Pet segment has also been standing out so far.

Shares of this producer and distributor of lawn and garden products, and pet supplier have gained 2.8% in the past year against the industry’s 25% decline. The stock has a VGM Score of A and a Zacks Rank #3 (Hold) at present. For fiscal 2022, the Zacks Consensus Estimate for Central Garden & Pet’s sales is currently pegged at $3.36 billion, suggesting growth of 1.7% from the year-ago period’s corresponding figure.

Let’s Delve Deeper

Unique packaging, point-of-sale displays, logistic capabilities and a high level of customer service are the major catalysts. Being the leading producer of garden and pet supplies products in the United States, Central Garden & Pet boasts a diversified portfolio of brands and has strong relationships with key retailers. In addition, management intends to develop differentiated products, improve sales capacity and become more cost-effective.

Strategic buyouts have been aiding CENT’s performance. Through these buyouts, management has been augmenting its manufacturing capabilities, driving operating synergies, developing distribution network and enhancing its key abilities in the digital and e-commerce domain.

Some of the notable acquisitions in the recent past include the transactions of D&D Commodities Ltd. (D&D), a leading provider of premium bird feed, in June 2021; Green Garden Products, a leading provider of vegetable, herb and flower seed packets, seed starters and plant nutrients, in February 2021; and Hopewell Nursery, a leading live goods grower, in January 2021.

The acquisition of DoMyOwn.com advances CENT’s digital capabilities to deliver a solid omni-channel performance. Central Garden & Pet also partnered with the leading e-commerce platform, Profitero, Inc.

During third-quarter fiscal 2022, the Garden unit’s e-commerce advanced 15%, accounting for a mid-single-digit of total segment sales. The Pet unit’s e-commerce grew 14% and now represents approximately 22% of Pet branded sales, reflecting an increase of 200 basis points from the prior-year reading.

CENT’s Pet segment is steadily boosting the overall performance. Contributions from the dog & cat treats, and toys and outdoor cushion businesses have been driving the segment’s growth for a while.

Wrapping up, we expect all the aforementioned drivers to keep yielding favorable results ahead.

Eye These Solid Picks

Here we highlighted three better-ranked stocks, namely, Designer Brands DBI, Oxford Industries OXM and lululemon athletica LULU.

Designer Brands designs, manufactures and retails footwear and accessories. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Designer Brands’ current financial-year revenues and earnings per share (EPS) suggests growth of 6.9% and 23.5%, respectively, from the corresponding year-ago reported figures. DBI has a trailing four-quarter earnings surprise of 55.1%, on average.

Oxford Industries is a renowned apparel company with a Zacks Rank #2 (Buy) at present. OXM has a trailing four-quarter earnings surprise of 91.1%, on average.

The Zacks Consensus Estimate for Oxford Industries’ current financial-year revenues and EPS suggests growth of 15.3% and 25.7%, respectively, from the corresponding year-ago reported figures.

lululemon, the designer and distributor of athletic apparel and accessories, carries a Zacks Rank of 2 at present. LULU has an expected EPS growth rate of 20% for three-five years.

The Zacks Consensus Estimate for lululemon’s current financial-year sales and EPS suggests growth of 26.6% and 25.9%, respectively, from the comparable year-ago reported numbers. LULU has a trailing four-quarter earnings surprise of 10.4%, on average.


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Central Garden & Pet Company (CENT) : Free Stock Analysis Report
 
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Designer Brands Inc. (DBI) : Free Stock Analysis Report
 
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