Central Garden & Pet sales up 17% in first quarter
Net sales for pet segment were up 25%
Central Garden & Pet Co. saw a 17% increase in sales for its fiscal first quarter ended December 26, 2015.
“We are right where we want to be. Our strategic initiatives are working,” said John Ranelli, president & CEO of Central Garden & Pet.
The company is increasing its guidance for the full year. It now expects adjusted earnings per fully diluted share to grow at least 35% for the year, to US$1.00 or higher.
Sales increased 17% to US$359.8 million compared with US$307.3 million in the first quarter a year ago. Approximately half of the growth was organic and half from acquisitions.
Gross profit increased 13% to US$99.8 million compared with US$88.0 million in the first quarter a year ago. Gross margin for the first quarter declined 90 basis points to 27.7% compared with 28.6% in the first quarter a year ago.
First quarter net sales for the pet segment increased US$49.4 million, or 25%, from the same period a year ago to US$248.7 million. Approximately 57% of the gain was due to acquisitions while the remaining 43% was organic growth. Sales increases in the dog & cat and aquatics categories, as well as higher sales of other manufacturers’ products, drove the increase in organic sales. The dog & cat and aquatics categories benefitted from increased distribution while sales of other manufacturers’ products were driven by strength in the e-commerce channel and increased distribution for a new third-party customer. The pet segment’s branded product sales were US$188.6 million in the first quarter of 2016 and sales of other manufacturers’ products were US$60.1 million.
The pet segment’s operating income rose 27% to US$26.2 million compared with US$20.6 million in the first quarter of 2015. Pet operating margin improved 20 basis points, more than offsetting a decline in the segment’s gross margin. The margin increase was largely due to a more favorable mix of sales, with a greater percentage of dog & cat revenues, inclusive of the company’s new acquisitions, and a reduction in the percentage of sales of other manufacturers’ products.