Central Garden & Pet is already starting to see results in the first quarter ended Dec. 28 from an operational strategy it put in place following a disappointing fourth quarter that yielded “unacceptable” financial results.
The leading marketer and producer of branded products for the lawn and garden and pet supplies markets reported net sales of $291 million, a 1% decrease from $292.5 million in the first quarter of the prior year. However, the company’s first quarter operating loss improved to $8.4 million compared to an operating loss of $13.1 million in the first quarter of 2013.
The company also narrowed its net loss for the quarter to $12.7 million, or $0.26 per fully diluted share, compared to a net loss of $15.3 million, or $0.32 per fully diluted share in the year-ago period.
Central Garden & Pet historically has reported a loss in its fiscal first quarter given the seasonal nature of the lawn and garden category.
“Our first quarter showed some improvement. I am pleased we are starting to see improved performance from the changes we are making,” said president and CEO John Ranelli. “Although we are encouraged by our progress, there is still much work to be done to get the business consistently operating as it should. I am optimistic about the company’s future and our ability to deliver improved returns to our shareholders and the highest level of service and innovative products to our customers.”
Net sales for the garden segment increased $8.6 million, or 9%, from the same period a year ago to $105.9 million, due primarily to higher seasonal décor, wild bird feed and professional fertilizer revenues. The garden segment’s branded product sales for the quarter were $92.8 million and sales of other manufacturers’ products were $13.1 million. Historically, first quarter revenues for the garden segment have been the lowest of any quarter of the year due to the seasonality of the lawn and garden market. In the first quarter, the garden segment’s operating margin improved 290 basis points. The garden segment’s operating loss in the quarter was $6.2 million, compared to an operating loss of $8.5 million in the first quarter of 2013.
First quarter net sales for the pet segment declined $10.6 million, or 5%, from the same period a year ago to $184.6 million, due in part to lower sales of aquatics products. The pet segment’s branded product sales were $140.5 million and sales of other manufacturers’ products were $44.1 million. The pet segment’s operating margin increased 260 basis points, due in part to improved results in its dog and cat businesses. The pet segment’s operating income was $14.4 million compared to $10.2 million in the prior-year period.