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Central Garden & Pet's (CENT) Brands & Buyouts Fuel Sales

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Central Garden & Pet Company (CENT - Free Report) has been reinforcing its position in the pet supplies, and lawn and garden supplies space. Management has been developing new products, advancing digital capabilities, optimizing supply chain and focusing on marketing activities. CENT is also on track with its Central to Home strategy. These factors have been aiding the company’s performance for a while now.

Let’s delve deeper.

Detailing Strategies

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. CENT is also on track with its Central to Home strategy, and invests in digital marketing and innovation, besides taking customer feedback to drive growth. Unique packaging, point-of-sale displays, logistic capabilities and a high level of customer service are some of its key catalysts.

To reinforce its footprint, Central Garden & Pet has been a disciplined buyer in the garden and pet areas for sometime now. Through these buyouts, CENT aims to enhance its manufacturing capabilities, operating synergies and distribution network, as well as advance key capabilities in digital and e-commerce domains. These buyouts have been enriching Central Garden & Pet’s portfolio and customer base for a while, and thus contributing to its top line.

Some of the notable acquisitions in the recent past include those of D&D Commodities Ltd., 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.

Further, the buyout of DoMyOwn.com is steadily advancing CENT’s digital capabilities to deliver a robust omni-channel performance. DoMyOwn.com is a fast-growing online retailer of professional-grade control products, which is consistently fortifying CENT’s position in the control products space. The deal adds best-in-class e-commerce fulfillment platform and digital capabilities to Central Garden & Pet’s portfolio, and helps the same efficiently meet e-commerce demand. CENT has also partnered with the leading e-commerce platform of Profitero, Inc, which is reinforcing its e-commerce business.

What’s More?

Buoyed by the aforesaid endeavors, the company’s Pet as well as Garden segments have been performing impressively. Contributions from animal health, dog and cat, and the pet distribution businesses favorably impacted the Pet segment. The company increased its market share in dog toys, rawhide, equine, reptile, and health & wellness. E-commerce now represents 22% of Pet branded sales. Garden segment’s first-quarter net sales advanced 45% year over year in first-quarter fiscal 2022, courtesy of a $70-million contribution from recent buyouts. Strength in wild bird, chemicals & fertilizer, as well as live plants has been aiding the segment.

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Encouragingly, the retailer’s shares have gained 1.2% over the past three months against the industry’s 14% decline. A VGM Score of A for this presently Zacks Rank #3 (Hold) stock further speaks volumes. For fiscal 2022, the Zacks Consensus Estimate for CENT’s sales and earnings per share (EPS) suggests growth of 4.7% and 6.2%, respectively, from the year-ago period’s corresponding figures.

We believe that all the aforementioned growth factors will keep yielding favorable results ahead.

Eye These Solid Picks

Some better-ranked stocks in the Consumer Discretionary space are Oxford Industries (OXM - Free Report) , Gildan Activewear (GIL - Free Report) and G-III Apparel (GIII - Free Report) .

Oxford Industries currently carries sports a Zacks Rank of 1 (Strong Buy). OXM has a trailing four-quarter earnings surprise of 112.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Oxford Industries’ current financial year’s sales and EPS suggests growth of 10.2% and 13%, respectively, from the corresponding year-ago reported numbers.

Gildan Activewear carries a Zacks Rank #2 (Buy) at present. GIL has an expected long-term earnings growth rate of 8%.

The Zacks Consensus Estimate for Gildan Activewear’s 2022 sales and EPS suggests growth of 8.9% and 3.3%, respectively, from the corresponding year-ago reported figures. GIL has a trailing four-quarter earnings surprise of 66.6%, on average.

G-III Apparel currently has a Zacks Rank of 2. GIII has a trailing four-quarter earnings surprise of 160.6%, on average.

The Zacks Consensus Estimate for G-III Apparel 's current financial-year sales suggests growth of 8.7% while the same for EPS indicates a rise of 5.2% from the respective year-ago  reported figures.

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