Central Garden & Pet Company
) posted a disappointing quarter yet again. The company's
third-quarter fiscal 2013 earnings of 28 cents a share missed the
Zacks Consensus Estimate of 42 cents by miles and plunged 40.4%
year over year.
Top line decreased approximately 7% year over year to $494.1
million and also missed the Zacks Consensus Estimate of $525
million. Decline in both Pet and Garden segments and tough
year-over-year comparisons were to blame.
Lower sales led to a 15.6% decline in consolidated gross
profit to $152.5 million, while gross margin decreased
approximately 290 basis points to 30.9%. Operating income
decreased 32.8% to $32.9 million, while operating margin
contracted 250 basis points to 6.7% during the quarter.
segment net sales decreased 12% year over year to $237.8 million.
The segment's branded product sales decreased 15% to $194.5
million, whereas sales of other manufacturers' products increased
2% to $43.3 million in the quarter. Pet segment's operating
income declined 18.1% year over year to $33.1 million, whereas
operating margin contracted 100 basis points, reflecting a
decline in flea & tick sales, partially offset by lower
selling, general and administrative expenses.
Revenue at the
segment decreased 2% year over year to $256.3 million, reflecting
a decline in control products sales. Moreover, the prior-year
quarter benefited from backlog sales, which were not there this
quarter. The Garden segment's branded product sales
decreased 3% to $215.5 million, whereas sale of other
manufacturers' products declined 1% to $40.8 million during the
quarter. The segment reported an operating income of $13.7
million, down 39.4% year over year, whereas operating margin
declined 330 basis points.
Other Financial Details
This Zacks Rank #3 (Hold) company ended the quarter with cash
and cash equivalents of $20.5 million, total debt of $509.6
million and shareholders' equity of $489.9 million, excluding
non-controlling interest of $1.7 million. The leverage ratio was
4.9x for the quarter. The company incurred $3 million in capital
expenditures and plans to spend at most $30 million in fiscal
Other Stocks to Consider
Until any further upward revision in Central Garden's Zacks
Rank, other stocks in the consumer goods sector worth considering
Prestige Brands Holdings, Inc
Rocky Brands, Inc
), all of which hold a Zacks Rank #1 (Strong Buy).
CENTRAL GARDEN (CENT): Free Stock Analysis
LIBBEY INC (LBY): Free Stock Analysis Report
PRESTIGE BRANDS (PBH): Free Stock Analysis
ROCKY BRANDS (RCKY): Free Stock Analysis
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