How Central Garden & Pet (CENT) is Poised Before Q1 Earnings

Central Garden & Pet Company CENT is likely to post a bottom-line decrease when it reports first-quarter fiscal 2022 results on Feb 2, after the closing bell. The Zacks Consensus Estimate for quarterly earnings is currently pegged at 1 cent, indicating a significant decline from 28 cents earned in the year-ago quarter. The consensus mark has also moved 5 cents south in the past 30 days.

However, this renowned player in the garden and pet industries has a trailing four-quarter earnings surprise of 46.1%, on average.

The Zacks Consensus Estimate for revenues is pegged at $619.7 million for the fiscal first quarter, suggesting an increase of 4.6% from the year-ago quarter’s reported figure.

Key Aspects to Note

Central Garden & Pet’s performance for the fiscal first quarter is likely to have gained from favorable demand conditions, and strength across its Garden and Pet units. While the Garden segment is benefiting from recent accretive buyouts and higher gardening activities, the Pet unit is being aided by significant contributions from dog treats and chews, distribution, outdoor cushions and animal health.

People have been engaged in gardening activities and pet adoptions amid the pandemic so far. As a result, demand for pet-related products and gardening-related supplies is decent. Additionally, Central Garden & Pet continues developing new products, advancing digital capabilities and focusing on marketing activities. Its Central-to-Home strategy also bodes well. These factors and contributions from the recent acquisitions might have bolstered the top line in the to-be-reported quarter. CENT is gaining from the Hopewell, Green Garden, DoMyOwn and D&D takeovers.

However, Central Garden & Pet is persistently encountering escalated SG&A expenses. Besides, supply-chain headwinds, cost inflation across key commodities, and freight and labor as well as heightened investment levels to build capacity might have dented margins in the quarter under review. On its fourth-quarter fiscal 2021 conference call, management had anticipated lingering pressure on supply chain because of elevated demand levels in fiscal 2022. CENT expects international ocean freight to remain constrained and anticipates inflationary pressures on key commodities and labor to stay. Management expected first-half fiscal 2022 to be hit hard by the ongoing headwinds with GAAP earnings per share for the fiscal first quarter to be well below the prior-year period’s level.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict 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 Company Price and EPS Surprise

Central Garden & Pet Company Price and EPS Surprise

Central Garden & Pet Company price-eps-surprise | Central Garden & Pet Company Quote

Although Central Garden & Pet has an Earnings ESP of +100.00%, the same has a Zacks Rank #4 (Sell), presently, leaving surprise prediction inconclusive.

Stocks Poised to Beat Earnings Estimates

Here are some companies worth considering as our model shows that these have the right combination of elements to beat on earnings this season:

Macy’s M currently has an Earnings ESP of +7.71% and a Zacks Rank #1. M is expected to register top and bottom-line growth when it reports fourth-quarter fiscal 2021 financial numbers. The Zacks Consensus Estimate for M’s quarterly revenues is pegged at $8.44 billion, suggesting growth of 24.5% from the prior-year quarter’s reported figure. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Macy’s quarterly earnings has moved 2.6% up in the past 30 days to $1.97 per share, suggesting 146.3% growth from the year-ago period’s reported number. M delivered an earnings beat of 313.5%, on average, in the trailing four quarters.

Coty COTY currently has an Earnings ESP of +37.14% and a Zacks Rank #3 (Hold). COTY is anticipated to register top-line growth when it reports second-quarter fiscal 2022 results. The Zacks Consensus Estimate for Coty’s quarterly revenues is pegged at $1.6 billion, indicating an improvement of 13.8% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Coty’s bottom line has been stable in the past seven days at 12 cents per share. However, the consensus estimate for earnings suggests a decline of 29.4% from the year-ago quarter’s reported figure. COTY delivered an earnings beat of 66.4%, on average, in the trailing four quarters.

Hershey HSY has an Earnings ESP of +0.90% and a Zacks Rank of 3 at present. HSY is expected to witness a rise in the top and the bottom line when it reports fourth-quarter 2021 earnings numbers. The Zacks Consensus Estimate for HSY’s quarterly revenues is pegged at nearly $2,258 million, suggesting a rise of 3.4% from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for Hershey’s quarterly earnings has gone 2 cents up in the past 30 days to $1.63 per share, suggesting 9.4% growth from the year-ago quarter’s reported number. HSY delivered an earnings beat of 4.4%, on average, in the trailing four quarters.

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