Top estimates for Central Garden’s (CENTA) second-quarter earnings and revenue

Central Garden (CENTA) reported quarterly earnings of $1.27 per share, beating the Zacks Consensus Estimate of $1.18 per share. For comparison, a year earlier earnings per share were $1.32. These numbers have been adjusted for one-off items.

This quarterly report presented an earnings surprise of 7.63%. A quarter ago, it was expected that this maker of pet and lawn supplies would post earnings of $0.01 per share when it actually produced earnings of $0.16, delivering a surprise of 1,500%.

The company has topped consensus EPS estimates four times over the last four quarters.

Central Garden, which belongs to the Zacks Consumer Products – Discretionary industry, posted revenues of $954.37 million for the quarter ended March 2022, surpassing the Zacks Consensus Estimate by 2.06%. For comparison, revenues from the previous year amounted to USD 935.25 million. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the immediate share price movement based on the recently-released numbers and future earnings expectations will largely depend on management’s commentary on the earnings call.

Central Garden shares have lost about 14.7% since the beginning of the year compared with the S&P 500 Index’s decline of -12.4%.

What’s next for Central Garden?

Even though Central Garden has underperformed the market this year, the question that comes to investors’ minds is: what’s next for the stock?

There are no simple answers to this key question, but one reliable measure that can help investors address this issue is the company’s earnings prospects. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of the earnings release, the estimate revision trend for Central Garden is mixed. While the magnitude and direction of estimate revisions may change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) stock. Therefore, the company’s stock is expected to perform in line with the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the next quarters and the current fiscal year change in the coming days. The current consensus EPS estimate is $1.65 on $1.08 billion in revenues for the coming quarter and $3.10 on $3.46 billion in revenues for the current fiscal year.

Investors should be aware that the outlook for the industry may also have a significant impact on share prices. In terms of the Zacks Industry Rank, Consumer – Discretionary is currently in the bottom 27% of the 250+ Zacks industries. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Lifetime Brands (LCUT), another company in the same industry, has not yet released results for the quarter ending March 2022. The results are expected to be released on May 5.

The kitchen products company is expected to post quarterly earnings of $0.03 per share in its upcoming report, representing a year-over-year change of -76.9%. The consensus EPS estimate for the quarter has been revised 30.8% down to the current level over the last 30 days.

Lifetime Brands’ revenue is expected to be $186.4 million, down 4.7% from the year-ago quarter.

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