Please ensure Javascript is enabled for purposes of website accessibility

Why Central Garden & Pet Company Shares Popped

By Jeremy Bowman - Feb 5, 2014 at 4:15PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Is this meaningful? Or just another movement?

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Central Garden & Pet Company (CENT -1.67%) were looking like man's best friend today, gaining as much as 12% after reporting first-quarter earnings.

So what: The pet-and-garden-care retailer topped bottom-line estimates, saying its net loss narrowed to $0.26 a share, better than expectations of -$0.31, but sales still fell 1%, to $291 million, worse than estimates of $302.8 million. Due to the seasonal nature of its business, the company generally reports a loss at this time of year. CEO John Ranelli said the first quarter "showed some improvement," as its focus on fundamentals was beginning to yield results. Sales in its Lawn and Garden segment improved, but fell in the Pet category.

Now what: The jump in share price shows how weak expectations are for Central Garden & Pet, as this was not a particularly impressive report. Coming off a year where total per-share profit hit just $0.12, the bottom line appears to be moving in the right direction, though the drop in sales is concerning. Improved efficiency meant that gross profit actually increased in the quarter, but investors should pay close attention to sales in its next report as the first quarter of the year is where the company makes its money. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Central Garden & Pet Company Stock Quote
Central Garden & Pet Company
CENT
$43.50 (-1.67%) $0.74

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
327%
 
S&P 500 Returns
116%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/20/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.