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Central Garden & Pet (CENT) Q1 Earnings: What's in Store?

Investors' seem to be enthusiastic just ahead of Central Garden & Pet Company 's CENT first-quarter fiscal 2017 earnings release, which is slated to be announced on Feb 2, 2017. We observe that the stock has advanced roughly 4.7% in the past five days. So, what's driving the stock just before the earnings?

Let's Delve Deep

Central Garden & Pet has a remarkable history, at least in terms of bottom line. The company continued with its positive earnings surprise streak for the ninth straight quarter, when it reported fourth-quarter fiscal 2016 results. Studies indicate that on an average, positive earnings surprises drive strong returns in share price for several weeks following the report. Investors are keeping their fingers crossed over the outcome of the results, as they do want to lose this opportunity.

Shares of this marketer and producer of quality branded products for the lawn & garden and pet supplies markets have advanced approximately 42% in the past six months, while the Zacks categorized Consumer Products-Miscellaneous Discretionary industry has declined 2%. However, the broader Consumer Discretionary sector of which both are part of, has gained 7.5% in the same time frame.

Per the latest Earnings Outlook report as of Jan 26, Consumer Discretionary sector is likely to witness earnings growth of 3.7% and revenue increase of 13.1%. Let's take a closer look as to how Central Garden & Pet is expected to contribute to the sector's performance.

What to Expect from Central Garden & Pet?

Well the obvious question that comes to mind, will Central Garden & Pet be able to continue with its positive earnings surprise streak in the quarter to be reported. The company's past performance reveals that it surpassed the Zacks Consensus Estimate in the trailing four quarters by an average of 72.5%. The current Zacks Consensus Estimate for the quarter is 3 cents, which is couple of cents above from the year-ago quarter. Analysts polled by Zacks expect revenues of $376.4 billion, up about 5% year over year.

Factors Influencing this Quarter

Central Garden & Pet has been revamping both its Pet and Garden segments. Moreover, it intends to have a balanced approach that encompasses improvement in revenues and profits through operational efficiency along with cost reduction. Further, it plans to launch several products that appeal to customers, as well as upgrade its customer service. Organic growth and value accretive acquisitions, such as that of the pet bedding business and divestment of non-strategic assets have been helping the company to enhance its portfolio.

Additionally, Central Garden & Pet's gross margin has shown constant improvement in the past four quarters. Improvement in gross margin can be attributed to the company's efforts toward enhancing manufacturing efficiency and exit from the holiday decor business, which were hurting the margins beside lower raw material costs.

These factors bode well for the company and we hope the quarter turns out to be a favorable one for this Zacks Rank #1 (Strong Buy) company. You can see the complete list of today's Zacks #1 Rank stocks here .

Central Garden & Pet Company Price, Consensus and EPS Surprise

Central Garden & Pet Company Price, Consensus and EPS Surprise | Central Garden & Pet Company Quote

Other Stocks to Watch for Earnings

Investors following the Consumer Discretionary sector may watch out for earnings of Deckers Outdoor Corporation DECK , Michael Kors Holdings Limited KORS and Marriott International, Inc. MAR , which are expected to report quarterly results on February 2, 7 and 15, respectively. You can also uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

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Michael Kors Holdings Limited (KORS): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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