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What to Expect From Central Garden & Pet (CENT) Q4 Earnings?

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Central Garden & Pet Company (CENT - Free Report) is scheduled to report fourth-quarter fiscal 2020 numbers on Nov 23, after the closing bell. The company’s bottom line is likely to have registered a year-on-year decline during the quarter. The Zacks Consensus Estimate for the same is currently pegged at a loss of 5 cents per share, as against the earnings of 4 cents reported in the prior-year period. However, the consensus mark for the loss narrowed by a cent over the past 30 days. Further, Central Garden & Pet has a trailing four-quarter earnings surprise of 5.1%, on average.

The Zacks Consensus Estimate for revenues is pegged at $597 million, indicating growth of 10.3% from the prior-year quarter. However, the rate of sales growth is likely to have decelerated on a sequential basis during the period in discussion. The company had witnessed an increase of 18% in the last reported quarter.

Key Factors to Note

Central Garden & Pet has been benefiting from solid organic growth as well as contributions from buyouts like C&S Products (concluded in May 2019). Notably, C&S Products has been complementing the company’s existing wild bird feed business. Apart from this, Central Garden & Pet has been gaining on its healthy commercial relations with big retailers like PetSmart, PETCO and Walmart (WMT - Free Report) to name a few.

In the third quarter of fiscal 2020, acquisitions contributed about $10 million to the company’s top line, which was backed by strength in both Pet and Garden segments. In its conference call, management said that it expects the robust business momentum witnessed in the fiscal third quarter to continue — which bodes well for the quarter under review. The Zacks Consensus Estimate for the fiscal fourth-quarter sales in the Pet and Garden segments is pegged at $384 million and $192 million, respectively, suggesting an increase of 7.9% and 3.8%.

Nonetheless, management noted that the fiscal fourth quarter generally attracts smaller earnings, which coupled with increased investments in the period, will likely have resulted in a marginal loss in the fiscal fourth quarter. Additionally, any rise in SG&A expenses could be a concern for the company.

What the Zacks Model Unveils

Our proven model predicts 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 currently carries a Zacks Rank #2 and has an Earnings ESP of +57.14%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks With Favorable Combinations

Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season.

Best Buy (BBY - Free Report) has an Earnings ESP of +14.92% and carries a Zacks Rank #2, currently.

lululemon athetica (LULU - Free Report) has an Earnings ESP of +0.79% and holds a Zacks Rank #3, at present.

PVH Corp. (PVH - Free Report) has an Earnings ESP of +161.64% and currently carries a Zacks Rank of 3.

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