Central Garden & Pet Company (CENTA) has reported a 6.08 percent rise in profit for the quarter ended Mar. 25, 2017. The company has earned $34.68 million, or $0.67 a share in the quarter, compared with $32.70 million, or $0.65 a share for the same period last year. Revenue during the quarter grew 5.30 percent to $569.92 million from $541.25 million in the previous year period. Gross margin for the quarter expanded 92 basis points over the previous year period to 32.20 percent. Total expenses were 88.79 percent of quarterly revenues, down from 89.02 percent for the same period last year. This has led to an improvement of 23 basis points in operating margin to 11.21 percent.
Operating income for the quarter was $63.86 million, compared with $59.40 million in the previous year period.
"Our second quarter results continue to reflect our initiatives to grow sales and profits organically," said George Roeth, president and chief executive officer. "During the quarter we continued to grow faster than our categories, gaining market share across the majority of our businesses, with strong execution and a clear focus on demand-creation activities. On top of that, our M&A efforts continue to enhance our overall operating results."
For financial year 2017, the company forecasts diluted earnings per share to be $1.37 on adjusted basis.
Working capital increases marginally
Central Garden & Pet Company has recorded an increase in the working capital over the last year. It stood at $597.23 million as at Mar. 25, 2017, up 4.35 percent or $24.91 million from $572.32 million on Mar. 26, 2016. Current ratio was at 3.45 as on Mar. 25, 2017, down from 3.47 on Mar. 26, 2016. Cash conversion cycle (CCC) has decreased to 61 days for the quarter from 112 days for the last year period. Days sales outstanding went down to 43 days for the quarter compared with 45 days for the same period last year.
Days inventory outstanding has decreased to 50 days for the quarter compared with 99 days for the previous year period. At the same time, days payable outstanding was almost stable at 32 days for the quarter, when compared with the previous year period.
Debt remains almost stable
Total debt of Central Garden & Pet Company remained almost stable for the quarter at $496.24 million, when compared with the last year period. Total debt was 35.47 percent of total assets as on Mar. 25, 2017, compared with 37.56 percent on Mar. 26, 2016. Debt to equity ratio was at 0.83 as on Mar. 25, 2017, down from 0.93 as on Mar. 26, 2016. Interest coverage ratio improved to 9.35 for the quarter from 8.37 for the same period last year.
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