Central Garden & Pet posts mixed results
Earnings are down, sales are up, along with optimism for investments in demand creation.
With a new CEO at the helm, Central Garden & Pet reported fourth quarter net sales of $540.7 million, up 7.7% compared the same quarter last year.
For the full year, sales were $2.38 billion, up 7.6% from $2.22 billion in previous fiscal year.
CEO Tim Cofer, who took over the role in September, said investments in the company’s demand creation capabilities and initiatives have dampened earnings growth rate, but are expected to pay off in the future.
“My early days at Central have strengthened my conviction that Central is well-positioned as a leader in the pet and garden industries,” Cofer said. “One of my observations is that we have opportunities to enhance our position by investing more in demand creation capabilities and initiatives to drive long-term sustainable profitable growth.”
Details on the company’s strategy and adjustments will be shared in the spring, he said.
The company posted declines in both fourth quarter and full-year net income. For the year, the company’s $92.8 million in earnings was down 25%.
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Bottom line: Net income for the quarter declined to $2.4 million, down from $10.6 million in the same quarter last year.
What the CFO said: “A number of factors unfavorably impacted our performance in fiscal 2019, some of which may continue into 2020,” said CFO Niko Lahanas. “The timing of the 2018 acquisition of the highly-seasonal Bell Nursery business, the underperformance of our animal health businesses, impacted by unfavorable weather and other factors, a higher amount of receivables and inventory write-offs, and a higher number of shares outstanding, all negatively impacted results versus the prior year.”
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