Central Garden & Pet Company (CENT Quick QuoteCENT - Free Report) is likely to register a decrease in both top and bottom lines when it reports fourth-quarter fiscal 2024 on Nov. 25, after market close. The Zacks Consensus Estimate for revenues is pegged at $723.8 million, which indicates a decline of 3.5% from the prior-year reported figure. 

The consensus mark for the bottom line has remained unchanged in the past 30 days and is pegged at a loss of 20 cents. Central Garden & Pet Company has a trailing four-quarter earnings surprise of 38.9%, on average. In the last reported quarter, the company’s bottom line outperformed the Zacks Consensus Estimate by a margin of 5.6%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Central Garden & Pet Company Price, Consensus and EPS Surprise

Central Garden & Pet Company price-consensus-eps-surprise-chart | Central Garden & Pet Company Quote

Factors to Note Ahead of CENT’s Q4 Earnings Results

Central Garden & Pet Company continues to grapple with macroeconomic headwinds impacting consumer discretionary spending and a decline in new pet adoptions. These along with any softness in durable pet products are likely to have hurt CENT’s Pet segment. We foresee sales from the Pet segment to decline 5.6% in the final quarter of the current fiscal.

CENT's garden segment has historically been vulnerable to unpredictable weather patterns. The segment's exposure to seasonal products like live plants makes it particularly susceptible to weather variability. We anticipate a slight sales decline of 0.6% in the fourth quarter, a more modest decrease compared with 6.1% drop seen in the third quarter.

The company is in the midst of significant operational restructuring, including the closure of certain distribution facilities and the winding down of its underperforming pottery business. While cost-saving measures are designed to improve long-term profitability, these might result in short-term revenue disruptions. Furthermore, heightened competition and lower foot traffic, particularly in home centers, are likely to have contributed to weaker top-line performance. 

A major concern for CENT is the significant decrease in market prices for grass seed. On its last earnings call, the company estimated a write-down of $15 million to $20 million in its grass seed inventory. This is likely to have impacted the profitability. Also, any deleverage in selling, general, and administrative (SG&A) expenses could adversely affect margins. Moreover, any deleverage in SG&A expenses could have pressured margins. We anticipate SG&A expenses, as a percentage of net sales, to increase 140 basis points in the final quarter. 

Consequently, we expect an operating loss of $25.7 million for the fourth quarter, which includes the write-down charge. On an adjusted basis, we anticipate an operating loss of $9.7 million.

Despite challenges, Central Garden & Pet has been advancing with its cost and simplicity program, alongside investments in capacity expansion and automation. The company has implemented strategic measures across procurement, manufacturing, logistics and administrative functions, which are expected to have mitigated some of the bottom-line pressure.

What the Zacks Model Unveils for CENT

Our proven model doesn’t conclusively predict an earnings beat for Central Garden & Pet Company this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.

Central Garden & Pet Company currently has a Zacks Rank #4 (Sell) and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

3 Stocks With the Favorable Combination

Here are three companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this season:

Abercrombie & Fitch Co. (ANF Quick QuoteANF - Free Report) has an Earnings ESP of +4.59% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

ANF’s top line is anticipated to advance year over year when it reports third-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.18 billion, which indicates an 11.8% rise from the figure reported in the year-ago quarter. 

The company is expected to register an increase in the bottom line. The consensus estimate for Abercrombie & Fitch’s third-quarter earnings is pegged at $2.32 per share, up 26.8% from the year-ago quarter. ANF has a trailing four-quarter earnings surprise of 28%, on average.

Five Below (FIVE Quick QuoteFIVE - Free Report) has an Earnings ESP of +19.73% and currently carries a Zacks Rank of 3. FIVE’s top line is anticipated to advance year over year when it reports third-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $799.2 million, which indicates an 8.5% rise from the figure reported in the year-ago quarter. 

The company is expected to register a decline in the bottom line. The consensus estimate for Five Below’s third-quarter earnings is pegged at 16 cents per share, down 38.5% from the year-ago quarter. FIVE has a trailing four-quarter earnings surprise of 1.6%, on average.

Casey's General Stores (CASY Quick QuoteCASY - Free Report) has an Earnings ESP of +1.50% and currently carries a Zacks Rank of 3. CASY’s top line is anticipated to decline year over year when it reports second-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $4 billion, which indicates a 1.4% decline from the figure reported in the year-ago quarter. 

The consensus estimate for Casey's second-quarter earnings per share has dropped 1% in the past seven days and is now pegged at $4.24, flat year over year. CASY has a trailing four-quarter earnings surprise of 15.8%, on average.