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Jun 11, 2023

Central Garden & Pet (CENT) Rides On Customer

Central Garden & Pet Company CENT is positioning itself as a frontrunner in the competitive landscape of pet supplies, and lawn and garden products within the United States. It employs several key

Central Garden & Pet Company CENT is positioning itself as a frontrunner in the competitive landscape of pet supplies, and lawn and garden products within the United States. It employs several key catalysts to reinforce its market standing, including unique packaging, eye-catching point-of-sale displays, robust logistic capabilities, and a strong commitment to customer service excellence.Customer service has emerged as a cornerstone of Central Garden & Pet's approach, which enhances brand loyalty and customer retention. By prioritizing customer needs and concerns, the company creates a positive reputation.Additionally, the company has been making significant strides in its Central-to-home strategy, marked by enhancements in digital capabilities, supply-chain optimization, data analytic expansion, and customer engagement through marketing activities.

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Central Garden & Pet is streamlining its operations through a multi-year cost and simplicity program. This comprehensive effort aims to enhance efficiency across the organization by rationalizing its footprint, optimizing the portfolio and refining the cost structure.The company is actively engaged in initiatives spanning procurement, logistics, manufacturing, portfolio optimization and administrative expenses, all geared toward reducing complexity and facilitating more streamlined operations.The closure of the Athens production facility and plans to shutter the Portland, OR-based garden distribution facility by the end of 2023 is aligned with this vision of enhanced profitability and release resources for future growth.

The transition to e-commerce is evident, with online sales experiencing significant growth compared with brick-and-mortar outlets. In the third quarter of 2023, the e-commerce business grew more than 20%, representing more than 5% of the overall garden sales.In the garden segment, Central Garden & Pet has witnessed a promising resurgence, as evidenced by a 2% year-over-year increase in net sales to $520 million in the quarter under review.

Given its strong performance, management revised its adjusted outlook for fiscal 2023, raising the earnings expectation from $2.35 per share to $2.55 or better. This is backed by pricing actions and productivity initiatives across the board.This Zacks Rank #1 (Strong Buy) stock has outpaced the Zacks Consumer Products - Discretionary industry in the past three months. In the said period, shares of the company have gained 20.5% compared with the industry’s rise of 1.1%.

Here we have highlighted three other top-ranked stocks, namely Urban Outfitters, Inc. URBN, American Eagle Outfitters Inc. AEO and Crocs, Inc. CROX.Urban Outfitters, which specializes in the retail and wholesale of general consumer products, flaunts a Zacks Rank #1 at present. The company’s expected EPS growth rate for three to five years is 23.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Urban Outfitters’ current fiscal-year sales and earnings suggests growth of 6.6% and 81.7% from the year-ago period’s reported figure. URBN has a trailing four-quarter earnings surprise of 19.2%, on average.American Eagle is a specialty retailer of casual apparel, accessories and footwear. The company currently has a Zacks Rank #2 (Buy). The expected EPS growth rate for three to five years is 9.6%.The Zacks Consensus Estimate for American Eagle’s current fiscal-year earnings suggests growth of 8.3% from the year-ago reported numbers. AEO has a trailing four-quarter earnings surprise of 9.2%, on average.Crocs is one of the leading footwear brands with a focus on comfort and style. It currently has a Zacks Rank #2. CROX delivered an earnings surprise of 20.5% in the last reported quarter.The Zacks Consensus Estimate for Crocs’ current financial-year sales and earnings suggests growth of 12.9% and 11.2%, respectively, from the year-ago reported numbers. CROX has a trailing four-quarter earnings surprise of 19.9%, on average.

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