Central Garden & Pet Company
) reported soft fiscal fourth-quarter 2012 (ended September 29,
2012) results. The company's quarterly loss of 21 cents a share
remained flat with the prior-year quarter loss but was wider than
the Zacks Consensus Estimate of a loss of 20 cents.
However, strong sales in the company's Pet division and one
extra week in the quarter facilitated it to register a 5%
increase in total sales to $397.2 million. The company's reported
total sales surpassed the Zacks Consensus Estimate of $380
Gross profit increased 7% to $105.1 million, whereas gross
margin expanded approximately 40 basis points to 26.5%. The
company reported an operating loss of $8.5 million compared with
an operating loss of $4.6 million in the prior-year quarter.
The company stated that increased promotional and
innovation expenses and lower revenues from the decor business
negatively impacted the results.
segment sales increased 12% to $237.6 million, reflecting
improved sales in animal health products coupled with increases
in pet distribution business. The segment's branded product sales
jumped 12% to $191.7 million, whereas sales of other
manufacturers' products rose 15% to $45.9 million in the quarter.
Pet segment's operating income increased 4.5% year over year to
sales declined 3% year over year to $159.6 million, reflecting
lower decor sales. The Garden Products segment's branded product
sales decreased 6% to $140.2 million, whereas sales of other
manufacturers' products increased 17% to $19.4 million. The
segment reported an operating loss of $7.7 million during the
quarter compared with a loss of $6.9 million in the year-ago
quarter, reflecting lower profitability and increased costs.
Central Garden & Pet, which faces stiff competition from
The Scotts Miracle-Gro Company
), ended the quarter with cash and cash equivalents of $48.5
million, long-term debt of $449.5 million and shareholders'
equity of $464.9 million. The leverage ratio was 4.0x for the
Currently, we maintain a long-term 'Outperform' recommendation
on the stock. However, Central Garden & Pet has a Zacks #3
Rank, which translates into a short-term 'Hold' rating.
CENTRAL GARDEN (CENT): Free Stock Analysis
SCOTTS MIRCL-GR (SMG): Free Stock Analysis
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