Central Garden & Pet’s (CENT) Brands & Buyouts Fuel Sales – April 20, 2022
Central Garden & Pet Company (HUNDRED – Free Report) has strengthened its position in the pet supplies and lawn and garden supplies business. The management develops new products, advances digital capabilities, optimizes the supply chain and focuses on marketing activities. CENT is also on the right track with its Central to Home strategy. These factors have long contributed to business performance.
Let’s go deeper.
As the leading producer of garden and pet products in the United States, Central Garden & Pet has a diverse portfolio of brands and maintains strong relationships with major retailers. Additionally, management intends to develop differentiated products, improve sales capability and become more profitable. CENT is also on track with its Central to Home strategy and is investing in digital marketing and innovation, in addition to taking customer feedback into account to drive growth. Unique packaging, point-of-sale displays, logistical capabilities and a high level of customer service are some of its key enablers.
To reinforce its footprint, Central Garden & Pet has been a disciplined marketer in the garden and pet business for quite some time. Through these acquisitions, CENT aims to improve its manufacturing capabilities, operational synergies and distribution network, as well as advance its key digital and e-commerce capabilities. These acquisitions have for some time enriched the portfolio and clientele of Central Garden & Pet, and thus contributed to its turnover.
Some of the notable acquisitions of the recent past include those of D&D Commodities Ltd., a leading premium bird feed provider, in June 2021; Green Garden Products, a leading supplier of vegetable, herb and flower seed packets, seeds and plant nutrients, in February 2021; and Hopewell Nursery, a leading producer of live products, in January 2021.
Additionally, the acquisition of DoMyOwn.com steadily advances CENT’s digital capabilities to deliver robust omnichannel performance. DoMyOwn.com is a fast-growing online retailer of professional quality control products, constantly strengthening CENT’s position in the control products space. The deal adds best-in-class e-commerce fulfillment platform and digital capabilities to Central Garden & Pet’s portfolio, and helps it effectively meet e-commerce demand. CENT has also partnered with the leading e-commerce platform of Profitero, Inc, which strengthens its e-commerce business.
Buoyed by the aforementioned efforts, the Pet and Garden segments of the company recorded impressive performance. Contributions from animal, canine and feline health and companion animal distribution activities had a favorable impact on the Companion Animals segment. The company increased its market share in dog toys, rawhide, horses, reptiles, and health and wellness. E-commerce now represents 22% of Pet brand sales. First-quarter Garden segment net sales were up 45% year-over-year in the first quarter of fiscal 2022, driven by a $70 million contribution from recent buyouts. Strength from wild birds, chemicals and fertilizers, and live plants helped the segment.
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Encouragingly, shares of the retailer have gained 1.2% over the past three months against an industry decline of 14%. A VGM score of A for this currently ranked #3 Zacks (Hold) title says it all. For fiscal year 2022, Zacks consensus estimate for CENT’s sales and earnings per share (EPS) suggests growth of 4.7% and 6.2%, respectively, over the corresponding period figures. of the previous year.
We believe that all of the aforementioned growth factors will continue to produce favorable results.
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