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Here's Why You Should Hold Central Garden & Pet (CENT) Stock

Central Garden & Pet Company CENT seems well-poised for growth, thanks to its robust business strategies, including the expansion of digital capabilities and prudent buyouts. CENT continues reinforcing its position in the pet supplies, and lawn and garden supplies space. Management has been developing new products, advancing digital capabilities, optimizing supply chain and focusing on marketing activities for a while now.

Management is progressing smoothly on its ‘Central to Home’ strategy, and investing in digital marketing and innovation as well as customer insights and brand building to drive overall growth. Unique packaging, point-of-sale displays, logistic capabilities and a high level of customer service are key catalysts. Central Garden & Pet has a diversified portfolio of brands and strong relationships with key retailers.

Central Garden & Pet’s major buyouts have been augmenting its manufacturing capabilities, boosting operating synergies, developing distribution network as well as enhancing key capabilities in digital and e-commerce. Some of the notable acquisitions in the recent past include the transactions of D&D Commodities Ltd. (D&D), a leading provider of premium bird feed, in June 2021; Green Garden Products, a leading provider of vegetable, herb and flower seed packets, seed starters and plant nutrients, in February 2021; and Hopewell Nursery, a leading live goods grower, in January 2021.

The acquisition of DoMyOwn.com is constantly enhancing CENT’s digital capabilities. Central Garden & Pet’s also partnered with the leading e-commerce platform, Profitero, Inc. In third-quarter fiscal 2022, the Garden unit’s e-commerce advanced 15%, accounting for an amount in mid-single-digit of total segment sales. The Pet unit’s e-commerce grew 14%, representing approximately 22% of Pet branded sales and reflecting an increase of 200 basis points from the prior-year tally.

What’s More?

We note that CENT’s Pet unit is consistently performing well. The Pet segment’s third-quarter net sales of $505 million were largely in line with the prior-year sales figure. Contributions from the dog & cat treats, and toys and outdoor cushion businesses continue driving the segment’s upside.

Additionally, analysts seem optimistic about this presently Zacks Rank #3 (Hold) stock. For 2022, the Zacks Consensus Estimate for Central Garden & Pet’s sales is currently pegged at $3.36 billion, suggesting growth of 2.8% from the year-ago period’s corresponding figure. Also, for the next fiscal year, the consensus estimate for sales and earnings per share (EPS) stands at $3.39 billion and $3.01 each, implying an increase of 2.9% and 5%, respectively, from the year-earlier tallies.

Shares of this producer and distributor of lawn and garden products, and pet supplier have gained 6.1% in the past six months against the industry’s 20.9% decline. A VGM Score of A further speaks volumes for the stock’s credibility.

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Designer Brands DBI designs, manufactures and retails footwear and accessories. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Designer Brands’ current financial-year revenues and earnings per share (EPS) suggests growth of 6.9% and 23.5%, respectively, from the corresponding year-ago reported figures. DBI has a trailing four-quarter earnings surprise of 55.1%, on average.

Delta Apparel DLA is a manufacturer of activewear and lifestyle apparel products. DLA flaunts a Zacks Rank of 1 at present.

The Zacks Consensus Estimate for Delta Apparel’s current financial-year sales and EPS suggests growth of 14.6% and 45.8%, respectively, from the year-ago corresponding figures. DLA has a trailing four-quarter earnings surprise of 41.1%, on average.

Caleres CAL, a footwear dealer, flaunts a Zacks Rank of 1 at present. CAL has a trailing four-quarter earnings surprise of 62.9%, on average.

The Zacks Consensus Estimate for Caleres’ current financial-year sales and EPS suggests growth of 5.2% and 1.8%, respectively, from the year-ago corresponding figures.


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Central Garden & Pet Company (CENT): Free Stock Analysis Report
 
Caleres, Inc. (CAL): Free Stock Analysis Report
 
Delta Apparel, Inc. (DLA): Free Stock Analysis Report
 
Designer Brands Inc. (DBI): Free Stock Analysis Report
 
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