Central Garden & Pet plunges after withdrawing guidance
Central Garden & Pet Co. (Nasdaq: CENT) shares are down on news that the maker of pet, lawn and garden supplies is withdrawing its fourth-quarter outlook and postponing a public offering and a sale of shares to its chairman.
The Walnut Creek, Calif.-based firm said trends that had contributed to earlier market softness had not eased during August and September. Accordingly, the company withdrew its stated guidance. On September 10, Central Garden & Pet announced in a press release that it expected earnings for the fourth quarter in the range of $0.07 to $0.09 per share and earnings for fiscal 2007 ending September 29 to be in the range of $0.54 to $0.56 a share. Wall Street analysts are looking for earnings of $0.09 per share in the fourth quarter and $0.59 per share for fiscal 2007. The company earned $0.25 per share in the fourth quarter of 2006 and $2.85 per share in fiscal 2006.
The company also previously stated in a press release that it expects fiscal 2008 “to be a substantial improvement over expected fiscal 2007 results but not to the level of fiscal 2006 results, assuming that the adverse weather conditions and volatile grain prices, which adversely affected fiscal 2007 results, do not recur.”
“As we have discussed previously, in fiscal 2007 we have experienced the perfect storm in terms of weather, grain pricing and other factors,” CEO Glenn Novotny said in a statement. “We remain focused on improved performance in fiscal 2008 and believe it is best for our shareholders to withdraw our guidance and postpone the proposed offering at this time.”
The company also previously announced on September 10 that it was offering 10 million shares of Class A common stock to the public. Also among the canceled plans, William Brown, Central Garden & Pet’s chairman, said he intended to purchase an additional 500,000 shares.
In late afternoon trading, CENT shares are nearing a year low of 9.69%, or $1.02, at $9.51. Over the last 52 weeks, shares have ranged from $9.26 to $55.11.
