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Central Garden & Pet (CENT) Beats Q3 Earnings, Ups View
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Central Garden & Pet Company (CENT - Free Report) continued with its positive earnings surprise streak for the eighth consecutive quarter, when it reported third-quarter fiscal 2016 results. In fact, the stellar performance prompted management to raise its earnings outlook for the fiscal year.
Organic growth, value accretive acquisitions such as the pet bedding business, and divestment of non-strategic assets have been helping the company to enhance its portfolio, thereby resulting in the improved performance.
The company posted adjusted earnings of 48 cents per share that beat the Zacks Consensus Estimate of 43 cents and also increased 26.3% year over year. The better-than-expected results were driven by improved top-line performance and effective cost-containment efforts.
Management now envisions fiscal 2016 adjusted earnings to jump at least 59% to $1.18 per share or higher. Earlier, the company had projected an increase of 49% in adjusted earnings per share to at least $1.10 or higher.
Net sales of this leading producer of branded lawn & garden and pet supplies products grew 12% year over year to $514.5 million. The top line also surpassed the Zacks Consensus Estimate of $490.9 million, thus marking the fifth successive quarter of revenue beat.
Adjusted gross profit increased 15.3% to $163.7 million, while gross margin expanded 90 basis points (bps) to 31.8%. Central Garden & Pet reported operating income of $48.2 million. Operating margin expanded 90 bps to 9.4% in the reported quarter.
Segment Details
The Pet segment’s net sales surged 20.6% year over year to $287.2 million on the back of acquisitions as well as organic growth. Higher sales across professional as well as wild bird feed categories along with increased sales of other manufacturers’ products resulted in improved organic sales. Sales across the segment’s branded product and other manufacturers’ products came in at $227.8 million and $59.4 million, a rise of 24.3% and 8.4%, respectively.
The segment’s operating income soared 17.7% year over year to $38.7 million. Operating margin decreased marginally to 13.5%.
Net sales at the Garden segment improved 2.7% to $227.3 million primarily driven by increase in sales of other manufacturers' products and wild bird feed and controls revenues. Sales across the segment’s branded products came in at $175.9 million, down 2.5% year over year whereas other manufacturers’ reported revenues of $51.4 million, up 51.7% year over year. The segment recorded an operating income of $26.5 million, up 12.8% from the prior-year quarter.
Financial Details
Central Garden & Pet ended the quarter with cash and cash equivalents of $40 million, long-term debt of $394.6 million, and shareholders’ equity of $556.1 million, excluding non-controlling interest of $1.9 million.
Other Stocks to Consider
Central Garden & Pet currently has a Zacks Rank #3 (Hold). Better-ranked stocks in this sector include PCM, Inc. , Barnes & Noble Education, Inc. (BNED - Free Report) and Nutrisystem, Inc. . PCM sports a Zacks Rank #1 (Strong Buy) whereas Barnes & Noble Education and Nutrisystem hold a Zacks Rank #2 (Buy).
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Central Garden & Pet (CENT) Beats Q3 Earnings, Ups View
Central Garden & Pet Company (CENT - Free Report) continued with its positive earnings surprise streak for the eighth consecutive quarter, when it reported third-quarter fiscal 2016 results. In fact, the stellar performance prompted management to raise its earnings outlook for the fiscal year.
Organic growth, value accretive acquisitions such as the pet bedding business, and divestment of non-strategic assets have been helping the company to enhance its portfolio, thereby resulting in the improved performance.
The company posted adjusted earnings of 48 cents per share that beat the Zacks Consensus Estimate of 43 cents and also increased 26.3% year over year. The better-than-expected results were driven by improved top-line performance and effective cost-containment efforts.
Management now envisions fiscal 2016 adjusted earnings to jump at least 59% to $1.18 per share or higher. Earlier, the company had projected an increase of 49% in adjusted earnings per share to at least $1.10 or higher.
CENTRAL GARDEN Price, Consensus and EPS Surprise
CENTRAL GARDEN Price, Consensus and EPS Surprise | CENTRAL GARDEN Quote
Net sales of this leading producer of branded lawn & garden and pet supplies products grew 12% year over year to $514.5 million. The top line also surpassed the Zacks Consensus Estimate of $490.9 million, thus marking the fifth successive quarter of revenue beat.
Adjusted gross profit increased 15.3% to $163.7 million, while gross margin expanded 90 basis points (bps) to 31.8%. Central Garden & Pet reported operating income of $48.2 million. Operating margin expanded 90 bps to 9.4% in the reported quarter.
Segment Details
The Pet segment’s net sales surged 20.6% year over year to $287.2 million on the back of acquisitions as well as organic growth. Higher sales across professional as well as wild bird feed categories along with increased sales of other manufacturers’ products resulted in improved organic sales. Sales across the segment’s branded product and other manufacturers’ products came in at $227.8 million and $59.4 million, a rise of 24.3% and 8.4%, respectively.
The segment’s operating income soared 17.7% year over year to $38.7 million. Operating margin decreased marginally to 13.5%.
Net sales at the Garden segment improved 2.7% to $227.3 million primarily driven by increase in sales of other manufacturers' products and wild bird feed and controls revenues. Sales across the segment’s branded products came in at $175.9 million, down 2.5% year over year whereas other manufacturers’ reported revenues of $51.4 million, up 51.7% year over year. The segment recorded an operating income of $26.5 million, up 12.8% from the prior-year quarter.
Financial Details
Central Garden & Pet ended the quarter with cash and cash equivalents of $40 million, long-term debt of $394.6 million, and shareholders’ equity of $556.1 million, excluding non-controlling interest of $1.9 million.
Other Stocks to Consider
Central Garden & Pet currently has a Zacks Rank #3 (Hold). Better-ranked stocks in this sector include PCM, Inc. , Barnes & Noble Education, Inc. (BNED - Free Report) and Nutrisystem, Inc. . PCM sports a Zacks Rank #1 (Strong Buy) whereas Barnes & Noble Education and Nutrisystem hold a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>