Latest news with #CENT
Yahoo
3 days ago
- Business
- Yahoo
CENT Q1 Earnings Call: Margin Expansion and Cost Discipline Offset Revenue Decline
Pet company Central Garden & Pet (NASDAQ:CENT) missed Wall Street's revenue expectations in Q1 CY2025, with sales falling 7.4% year on year to $833.5 million. Its non-GAAP profit of $1.04 per share was 11.6% above analysts' consensus estimates. Is now the time to buy CENT? Find out in our full research report (it's free). Revenue: $833.5 million vs analyst estimates of $878.8 million (7.4% year-on-year decline, 5.1% miss) Adjusted EPS: $1.04 vs analyst estimates of $0.93 (11.6% beat) Adjusted EBITDA: $119.3 million vs analyst estimates of $114.5 million (14.3% margin, 4.2% beat) Management reiterated its full-year Adjusted EPS guidance of $2.20 at the midpoint Operating Margin: 11.2%, in line with the same quarter last year Market Capitalization: $2.08 billion Central Garden & Pet's latest quarterly results were shaped by shifting seasonal dynamics and ongoing efforts to optimize the business portfolio. Leadership attributed softer sales to the earlier timing of customer orders and promotional events, which pulled demand into the prior quarter, as well as unfavorable weather that delayed the start of the garden season. CEO Niko Lahanas explained, 'the earlier timing of preseason orders and promotional events shifted sales forward into the first quarter, leading to softer sales during the second quarter.' Despite these headwinds, management highlighted the strong performance of the Wild Bird segment and double-digit e-commerce growth as bright spots. Strategic SKU rationalization and cost discipline contributed to margin improvements, and the company continued to streamline operations, including winding down its UK presence in favor of a direct export model. Looking ahead, Central Garden & Pet's outlook reflects both caution and targeted investment in areas with high potential. Management reaffirmed its full-year non-GAAP EPS guidance despite acknowledging increased macroeconomic uncertainty due to tariffs and ongoing geopolitical tensions. Lahanas noted, 'recent tariff actions and related geopolitical tensions have significantly increased macroeconomic uncertainty and weighed on consumer confidence.' The company expects heightened inflationary pressures, particularly in the Pet segment, and is preparing for a more promotional retail environment. Leadership plans to prioritize cost management while investing in e-commerce, digital technology, and further productivity initiatives, emphasizing the importance of agility as weather patterns and consumer behavior remain unpredictable. Management tied the quarter's performance to operational streamlining, portfolio simplification, and targeted investments in logistics and e-commerce, which helped offset external pressures like weather and shifting consumer demand. SKU Rationalization Efforts: Central Garden & Pet accelerated the exit of lower-margin and underperforming product lines, especially in the Pet segment's durable goods, which management cited as a key factor in supporting margins and profitability amid softer demand. Wild Bird Segment Outperformance: The Wild Bird business benefited from prolonged cold weather, driving record sales and mitigating some of the seasonal softness seen in traditional garden categories. This segment also contributed to share gains in both online and brick-and-mortar channels. E-Commerce and Digital Expansion: E-commerce sales saw continued double-digit growth, with enhanced digital capabilities, new product launches, and optimized retail media fueling higher engagement and improved conversion rates across Pet and Garden categories. Distribution and Logistics Upgrades: The company opened new distribution centers and consolidated older ones, introducing direct-to-consumer capabilities and centralizing operations in key categories to drive efficiency and support future growth, particularly in fast-growing segments such as dog and cat products. Cost and Simplicity Program Progress: Continued execution of the Cost and Simplicity program yielded tangible benefits, including cost savings, improved operational flow, and enhanced employee safety. Management expects these initiatives to position the company for additional margin expansion and organic growth. Central Garden & Pet's outlook is shaped by ongoing tariff risks, a more value-focused consumer, and the company's continued investment in digital and operational efficiency. Tariff and Inflation Pressures: Management expects recent tariff actions and geopolitical tensions to increase inflationary pressures in the second half of the year, particularly affecting input costs for the Pet segment. Plans are underway to mitigate these through supply chain adjustments, vendor negotiations, and selective pricing actions, though many changes will not impact results until late this year or next. Promotional Environment and Consumer Behavior: The company anticipates consumers will become more cautious and value-oriented, prompting a more promotional retail landscape and a potential shift toward private label and value products. Management is focused on maintaining competitiveness and margin discipline as these trends evolve. Strategic Investments in E-Commerce and Efficiency: Central Garden & Pet will continue prioritizing investments in e-commerce, technology, and logistics to support organic growth and enhance productivity. The Cost and Simplicity program remains central to operational improvements and potential future margin expansion, even as the company remains watchful for M&A opportunities that align with core categories. In the coming quarters, the StockStory team will monitor (1) the pace and effectiveness of tariff mitigation strategies and supply chain adjustments, (2) trends in consumer trade-down to value and private label products, and (3) the ramp-up in e-commerce and logistics capabilities. We will also assess how ongoing weather variability and promotional intensity affect both the Garden and Pet segments. Central Garden & Pet currently trades at a forward P/E ratio of 16×. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it's free). Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today. Sign in to access your portfolio
Yahoo
08-05-2025
- Business
- Yahoo
Central Garden & Pet Co (CENT) Q2 2025 Earnings Call Highlights: Record Pet Segment Income ...
Release Date: May 07, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Central Garden & Pet Co (NASDAQ:CENT) achieved record non-GAAP operating income within its pet segment, driven by strong execution. The company's wild bird business experienced record sales, benefiting from extended cold weather. E-commerce sales performance remained robust, with Central Garden & Pet Co (NASDAQ:CENT) holding the #1 online sales position in both the wild bird and grass seed categories. The cost and simplicity program continues to deliver significant results, including the successful upgrade of a distribution center in Pennsylvania, enhancing direct-to-consumer capabilities. Central Garden & Pet Co (NASDAQ:CENT) reaffirmed its fiscal 2025 guidance for non-GAAP EPS of $2.20 or higher, demonstrating confidence in its long-term value delivery to shareholders. Negative Points Net sales decreased by 7% to $834 million, impacted by the earlier timing of preseason orders and promotional events. Unseasonably cold and wet weather in March delayed the start of the garden selling season, negatively affecting sales. The loss of two product lines in the third-party garden distribution business added pressure on the top line. Tariff actions and geopolitical tensions have increased macroeconomic uncertainty, potentially impacting consumer confidence and inflationary pressures. The pet segment faced challenges with durable sales down double digits, partly due to SKU rationalization efforts. Q & A Highlights Q: Can you discuss the trends in the pet segment, particularly the differences between durables and consumables, and the outlook for the summer? A: John Hanson, President Pet Consumer Products, explained that net sales were down 6% due to customer pull forwards and SKU rationalization. Consumables were up low to mid-single digits, while durables were down double digits. The durable category faces challenges, especially with tariffs, but there are positive trends in the live animal business. Brad Smith, CFO, added that the decline in durables was partly due to SKU rationalization efforts. Q: How are tariffs impacting your business, particularly in the pet segment? A: Brad Smith, CFO, noted that about 13% of their cost of goods is subject to tariffs, with China being a significant contributor. They are working on vendor concessions, country of origin changes, SKU redesign, and pricing adjustments. Some pre-tariff inventory is helping mitigate exposure, but the situation remains fluid.
Yahoo
02-05-2025
- Business
- Yahoo
1 Profitable Stock Worth Your Attention and 2 to Turn Down
A company with profits isn't always a great investment. Some struggle to maintain growth, face looming threats, or fail to reinvest wisely, limiting their future potential. A business making money today isn't necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. That said, here is one profitable company that leverages its financial strength to beat the competition and two best left off your watchlist. Trailing 12-Month GAAP Operating Margin: 7.5% Enhancing the lives of both pets and homeowners, Central Garden & Pet (NASDAQ:CENT) is a leading producer and distributor of essential products for pet care, lawn and garden maintenance, and pest control. Why Do We Steer Clear of CENT? Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion Sales are projected to be flat over the next 12 months and imply weak demand Earnings growth underperformed the sector average over the last three years as its EPS grew by just 1.5% annually Central Garden & Pet's stock price of $33.91 implies a valuation ratio of 15.1x forward P/E. Dive into our free research report to see why there are better opportunities than CENT. Trailing 12-Month GAAP Operating Margin: 8% With attractions ranging from glacier tours in the Canadian Rockies to an oceanfront geothermal lagoon in Iceland, Pursuit Attractions and Hospitality (NYSE:PRSU) operates iconic travel experiences, experiential marketing services, and exhibition management across North America and Europe. Why Is PRSU Risky? Annual sales declines of 2.4% for the past five years show its products and services struggled to connect with the market Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable Negative returns on capital show that some of its growth strategies have backfired At $29.54 per share, Pursuit trades at 118.2x forward P/E. Read our free research report to see why you should think twice about including PRSU in your portfolio, it's free. Trailing 12-Month GAAP Operating Margin: 12.9% Founded by Fred Luddy, who coded the company's initial prototype on a flight from San Francisco to London, ServiceNow (NYSE:NOW) is a software provider helping companies automate workflows across IT, HR, and customer service. Why Do We Love NOW? Sales pipeline is in good shape as its remaining performance obligations (cRPO) averaged 22.3% growth over the last year Highly efficient business model is illustrated by its impressive 12.9% operating margin, and its operating leverage amplified its profits over the last year NOW is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders ServiceNow is trading at $955.70 per share, or 14.7x forward price-to-sales. Is now the time to initiate a position? See for yourself in our comprehensive research report, it's free. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free. Sign in to access your portfolio
