Big earnings decline at Central Garden & Pet
The company’s top line is boosted by two recent acquisitions.
Central Garden & Pet anticipated a challenging environment in the first quarter, and that’s it what reported. Not counting acquisitions, total organic growth declined 1.7%.
“We continue to expect to end the year with healthy organic sales and profitability growth in both our Garden and Pet segments, primarily driven by new products, a more favorable mix of sales, and higher organic margins aided by pricing actions and continued cost savings,” said George Roeth, president and CEO.
One thing the company did not expect was the timing shift in ordering made by a “large Garden customer.” Still, because of the recent acquisitions of Bell Nursery and General Pet, Central Garden & Pet reported first-quarter sales of $462.0 million, up 4.5% from the same quarter last year.
Net income dropped dramatically – down from $26.2 million in last year’s quarter to $1.8 million in the recent quarter. The drop was described as the result of a tax benefit in the first quarter of a year ago. Excluding that, earnings declined from $9.9 million.
On the positive side, wild bird feed sales rose, benefiting from harsh winter weather early in the season, the company said.
“While challenged by the expected headwinds that we articulated last quarter, the results for our first quarter came in largely as we expected, excluding the key customer shipment timing,” Roeth said. “With a strong sales performance in January, we are comfortable where our businesses stand at his point in the year.”
The company’s stock was hammered following the release, falling as much as 20% on Thursday.
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