This is our short term rating system that serves as a timeliness indicator for stocks over the next 1 to 3 months. How good is it? See rankings and related performance below.
|Zacks Rank||Definition||Annualized Return|
Zacks Rank Education - Learn more about the Zacks Rank
Zacks Rank Home - All Zacks Rank resources in one place
Zacks Premium - The only way to get access to the Zacks Rank
This page is temporarily not available. Please check later as it should be available shortly. If you have any questions, please email customer support at firstname.lastname@example.org or call 800-767-3771 ext. 9339.
Central Garden & Pet Company (CENT - Analyst Report) recently announced healthy second-quarter 2011 results. The company delivered a quarterly income of 54 cents a share, beating the Zacks Consensus Estimate and prior-year quarter’s income of 49 cents.
With respect to earnings surprises, Central Garden & Pet has missed the Zacks Consensus Estimate in three of the last four quarters. Compared with the Zacks Consensus Estimate, the earnings surprise ranges from a negative 114.3% to a positive 10.2%, the average being negative 43.3%. This signifies that Central Garden & Pet has underperformed the Zacks Consensus Estimate by 43.3% on an average in the last four quarters.
As per Central Garden & Pet, total revenue for the quarter increased 10.0% to $485.7 million, reflecting significant sales growth in garden products segment. The company’s total branded product sales climbed 13.0% to $417.3 million, whereas sales of other manufacturers’ products went down 7.6% to $68.4 million.
The reported net sales also surpassed the Zacks Consensus Revenue Estimate of $457.0 million.
During the reported quarter, gross profit inched up 1.3% to $163.3 million, whereas gross margin contracted 290 basis points to 33.6%. The decline in margin reflected a 14.9% rise in input costs. Total operating income for the quarter was $59.6 million, down 1.5% from $60.5 million in the year-ago quarter, reflecting the company’s increased spending on brand building coupled with accelerating commodity prices.
Central Garden & Pet, one of the leading producers and marketers of premium and value-oriented products, is focused on the lawn & garden and pet supplies markets in the U.S.
Garden Products segment sales jumped 19.0% to $260.3 million driven by the growth in its grass seed business coupled with the sales rise in garden chemicals and control business. The segment reported an operating income of $46.9 million compared with $36.8 million posted in the previous-year quarter.
Pet Products segment sales inched up 1.0% to $225.4 million and the segment’s operating income plunged 33.0% to $23.3 million, reflecting a continued rise in raw material costs.
Central Garden & Pet, which faces stiff competition from The Scotts Miracle-Gro Company (SMG - Snapshot Report), ended the quarter with cash and cash equivalents of $11.2 million, total long-term debt of $517.1 million and shareholders’ equity of $502.9 million, excluding a non-controlling interest of $0.5 million.
On July15, 2010, the company’s board authorized a new $100 million share repurchase program. During the quarter under review, the company bought back $39.0million of its shares.
Followed by a broad evaluation, we prefer to maintain our long-term ‘Underperform’ recommendation on the stock. Moreover, Central Garden & Pet holds a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating.
Please login to Zacks.com or register to post a comment.