Central Garden & Pet Co. CENT, a leading producer of branded lawn & garden and pet supplies products, announced that it has acquired the pet bedding business and certain other assets from National Consumers Outdoors Corp. (previously known as Dallas Manufacturing Company) for $61 million.
Central Garden & Pet expects that the acquired dog and cat bedding business will prove to be an attractive asset for the company. According to the company, bedding, which is the fifth leading category in dog and cat supplies, is gaining at a vigorous rate. Further, Central Garden & Pet thinks that this acquisition is in line with its strategy of constructing a portfolio of budding businesses and categories, and complements its broad pet products portfolio.
We note that Central Garden & Pet is revamping both its Pet and Garden segments. The company intends to have a balanced approach that encompasses revenue growth as well as cost reduction. It also aims to launch several products that will appeal to customers in addition to upgrading its customer service. Management expects the ongoing transformation efforts to yield results in the near future. The company plans to gain market share in the home centers, mass market, grocery, specialty pet store and other independent channels.
Additionally, the company’s effective inventory management is helping it to optimize merchandise levels in accordance with sales trends. Moreover, it is facilitating optimum utilization of working capital. Also, the company intends to evolve into an integrated, multi-brand company from a portfolio of stand-alone businesses, by restructuring and reorganizing operating units and consolidating facilities.
Zacks Rank
Central Garden & Pet currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the same industry include Nutrisystem, Inc. NTRI and Prestige Brands Holdings, Inc. PBH, both carrying a Zacks Rank #2 (Buy). Another stock in the related industry worth considering is Outerwall Inc. OUTR, also carrying a Zacks Rank #2.
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