Central Garden & Pet Company (CENT) produces, innovates, and markets pet, lawn, and garden products under leading brands. In fiscal 2007, the company generated 53% of net sales and 95% of operating income from the Pet Products segment, which markets Four Paws, TFH, Nylabone, and Interpet pet supplies; Wellmark insect control products; and Kaytee bird and small animal food. The company also markets Oceanic and All-Glass Aquariums, and Kent Marine saltwater aquarium supplies.
Management is addressing a difficult environment of adverse weather and higher costs, which have affected sales and profitability. The benefits from the strategy of expanding the operating margin through a positive mix shift towards higher margin products and the optimization of the supply chain has been delayed.
Higher grain costs are negatively impacting profitability. Management has lowered both sales and earnings guidance for fiscal 2008. However, the stock's decline discounts much of the negative developments. Therefore, the shares
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