Central Garden & Pet (CENT) up 39% in one year: what about in 2022? – December 30, 2021
Central Garden & Pet Company (HUNDRED – Free Report) appears well positioned for growth, thanks to its robust business strategies. CENT has been strengthening its position in pet supplies and lawn and garden supplies for some time through prudent acquisitions. The retailer develops new products, advances digital capabilities, optimizes the supply chain and focuses on marketing activities. These efforts will continue to contribute to overall performance in 2022.
Shares of this currently Zacks Rank # 2 (Buy) player jumped 39.3% year-on-year against the industry’s 36.5% decline. Zacks’ consensus estimate for Central Garden & Pet’s sales and EPS for the next fiscal year suggests growth of 3% and 10.4%, respectively, from the corresponding figures for the previous year. An VGM score of A further shows strength.
Let’s analyze more
To strengthen its footprint, Central Garden & Pet continues to be a disciplined buyer in the garden and pet industries. In fact, acquisitions are a key part of CENT’s strategy. The retailer has developed its business through more than 60 acquisitions since 1992. Through these acquisitions, management aims to improve its manufacturing capabilities, operating synergies and distribution network, as well as to advance its key capabilities in the fields of digital and electronic commerce. Of course, these acquisitions enrich Central Garden & Pet’s portfolio and clientele, in turn fueling sales.
Some notable acquisitions in the recent past include that of D&D Commodities Ltd. (D&D), a leading supplier of premium bird food, in June 2021; Green Garden Products, a leading supplier of vegetable, herb and flower seed packets, seed starters and plant nutrients, in February 2021; and Hopewell Nursery, a leading producer of live products, in January 2021.
Image source: Zacks Investment Research
Speaking of its digital initiatives, the takeover of DoMyOwn.com consistently advances CENT’s digital capabilities to deliver strong omnichannel performance. The purchase of DoMyOwn.com, a fast growing online retailer of professional quality control products, strengthens the buyer’s position in the control product space. The deal adds a premier e-commerce execution platform and digital capabilities to Central Garden & Pet’s portfolio, helping Central Garden & Pet meet the growing demand for e-commerce. CENT has also partnered with Profitero, Inc.’s leading e-commerce platform. This partnership provides CENT with a comprehensive view of its e-commerce business across eight retail partners.
Central Garden & Pet intends to develop differentiated products, improve sales capacity, respond to channel changes and become more profitable. Unique packaging, point-of-sale displays, logistics capabilities and a high level of customer service are also key enablers.
At the end of the line
On the strength of these strengths, CENT’s gardening and pet activities are consistently successful. While the Garden segment benefits from recent accretive buyouts and larger gardening activities, the Pets unit is helped by significant contributions from dog treats and chews, distribution, outdoor cushions and animal health.
In the end, we believe, all of the aforementioned initiatives will continue to produce favorable results in the future.
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