Central Garden & Pet Company CENT is a solid pick for 2022, thanks to continued strength in the pet and garden divisions, and technology advancements. CENT has been strengthening its position in the pet supplies, and lawn and garden supplies space via prudent acquisitions. The retailer is developing new products, optimizing supply chain and focusing on marketing activities.

This presently Zacks Rank #2 (Buy) player has increased 12.2% in a year against the industry’s 51.8% decline. A VGM Score of A for the stock further speaks volumes. For fiscal 2022, the Zacks Consensus Estimate for CENT’s sales and earnings per share (EPS) suggests growth of 4% and 6.5%, respectively, from the year-ago period’s corresponding figures.

Let’s delve deeper.

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Detailing Strategies

Being the leading producer of garden and pet supplies products in the United States, Central Garden & Pet boasts a diversified portfolio of brands and has strong relationships with key retailers. In addition, management intends to develop differentiated products, improve sales capacity and become more cost-effective. CENT is also on track with its ‘Central to Home’ strategy, and invests in digital marketing and innovation as well as derives customer insights to drive growth.

To reinforce its footprint, Central Garden & Pet has been a disciplined buyer in the garden and pet areas for sometime now. Through these buyouts, CENT aims to enhance its manufacturing capabilities, operating synergies and distribution network as well as advance key capabilities in digital and e-commerce domains. These buyouts have been enriching Central Garden & Pet’s portfolio and customer base for a while, contributing to its top line.

Some of its important acquisitions in the recent past were 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.

Further, the buyout of DoMyOwn.com is steadily advancing CENT’s digital capabilities to deliver a robust omni-channel performance. DoMyOwn.com is a fast-growing online retailer of professional-grade control products and is consistently fortifying the buyer’s position in the control product space. The deal adds best-in-class e-commerce fulfillment platform and digital capabilities to Central Garden & Pet’s portfolio and helps the same efficiently meet e-commerce demand. CENT also partnered with the leading e-commerce platform of Profitero, Inc, which is reinforcing its e-commerce business.

Final Thoughts

Despite strong tailwinds, Central Garden & Pet is not immune to headwinds, such as rising costs for key commodities and freight and labor. On a positive note, CENT is constantly performing well, defying such headwinds. We note that both its garden and pet businesses are consistently standing out. While the Garden segment is benefiting from recent accretive buyouts and higher gardening activities, the Pet unit is aided by significant contributions from dog treats and chews, distribution, outdoor cushions and animal health.

Wrapping up, we believe that all the aforementioned growth factors will keep yielding favorable results in 2022.

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The Zacks Consensus Estimate for Gildan Activewear’s 2022 sales and EPS suggests growth of 7.6% and 9.2%, respectively, from the year-ago corresponding figures. GIL has a trailing four-quarter earnings surprise of 85%, on average.

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