Weather, raw material costs impact results at Central G&P
Central Garden & Pet, a leading supplier of seeds, pottery, insecticides and other outdoor living products, reported net sales for its third fiscal quarter of $484.3 million, a 4% increase over the same period in 2010. The company said its sales gains were largely driven by the garden products segment, which reported sales growth of 6% for the quarter.
Third-quarter operating income was $36.6 million, compared with operating income of $52.6 million in the year-ago period. Net income for the quarter totaled $17.1 million, compared with net income of $25.9 million a year ago.
"We continued to drive solid revenue growth in the third quarter despite a difficult environment," said Bill Brown, chairman and CEO. "However, the continued significant escalation in raw material input costs, together with extreme weather conditions that suppressed our chemical and controls business and altered our product mix, negatively impacted our gross margin and bottom-line results. We have implemented price increases to recover some of the input cost increases, but there is a lag in retailer implementation that impacted the quarter and will continue to cause margin pressure. Our operating income was further reduced by our long-term commitment to strategic investments in marketing and brand building. Although adversely impacted by significant commodity price increases and extreme weather during the quarter, our business remains fundamentally sound. We remain focused on bringing innovative products to the marketplace, driving operational efficiency throughout our operation, and delivering top-line and bottom-line growth over the long term."
Based in Walnut Creek, Calif., Central Garden & Pet is a supplier of lawn, garden and pet products under a variety of brands, including Pennington, Kaytee, Amdro, Sevin, Ironite, Norcal and New England Pottery.