Yahoo Finance Central Garden & Pet (CENT) Updates View, Hurt by Garden Unit
Central Garden & Pet Company CENT revised its earnings per share (EPS) view for fiscal 2023. This guidance includes the impacts of macroeconomic volatility, cost inflation, changing consumer behavior and adverse retailer inventory dynamics. The EPS view also considers expected pricing actions, productivity efforts and capital spending below fiscal 2022 levels.
Management envisions fiscal 2023 EPS to be $2.35 or better. Earlier, the company maintained its EPS projection of $2.60-$2.80 versus $2.80 reported in the year-ago period. We note that fiscal 2023 will have 53 weeks versus 52 weeks in fiscal 2022. The guidance excludes the impacts of any acquisitions or restructuring initiatives that might occur in fiscal 2023.
Second-quarter EPS are anticipated to be roughly 90 cents, affected by weak spring weather with severe storms in the Southeast, heavy rain and snow in the West and an unseasonably cold late March. The company also witnessed softness across its Garden portfolio due to the unfavorable weather leading to a late start to the garden season, weak foot traffic and a decline in retailer inventory levels.
Nonetheless, the Pet segment matched the company’s expectations and increased market share. Management also highlighted that the company is progressing with its multi-year cost and simplicity program to lower complexity, boost margins and elevate brands. This program is focused on several areas like procurement, logistics, manufacturing, portfolio management and administrative. Central Garden & Pet projects EPS growth for the second half of the current fiscal year.
What Else?
In order to gain market share, the company intends to develop differentiated products, improve sales capacity, respond to channel shifts and become more cost-effective. The company is also investing in capacity expansion and automation to meet the demand. Further, the company remains optimistic about gains from its recent acquisitions. Also, Central Garden & Pet is making efforts to lower costs in a bid to improve margins and fuel growth.
Central Garden & Pet has been strengthening its position as one of the leading companies in the U.S. pet supplies and lawn and garden supplies space. Unique packaging, point-of-sale displays, logistic capabilities and high-level customer service are some of its key catalysts. The company is also making meaningful progress on its Central-to-home strategy. Notably, the company has been advancing digital capabilities, optimizing its supply chain, expanding data analytics capability and focusing on marketing activities to better engage with customers. The acquisition of DoMyOwn.com further advances the company’s digital capabilities to deliver strong omnichannel performance.
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Shares of this Zacks Rank #3 (Hold) company have risen 6.9% in the year-to-date period against the industry’s 2.3% drop.
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