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.
By Lindsay Beaton
This country is straddling the line between developing and developed as more of its citizens see the value in pet ownership.
By Lindsay Beaton