What Happened:
Shares of pet company Central Garden & Pet (NASDAQGS:CENT) jumped 7.3% in the afternoon session after the company reported first-quarter results with revenue exceeding expectations on slightly positive organic revenue growth. The topline beat was led by 6% year-on-year growth in the Garden segment, which more than offset the growth decline in the Pet segment (driven by lower sales of durable pet products). Operating income beat convincingly, leading to an impressive EPS beat. Looking ahead, full-year guidance was unchanged, with management highlighting a "challenging environment with deflationary cost pressures in certain commodity businesses, softer consumption in a number of categories, and lower foot traffic in key retailers." Zooming out, this was a very solid quarter that should please shareholders.
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What is the market telling us:
Central Garden & Pet's shares are not very volatile than the market average and over the last year have had only 5 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
Central Garden & Pet is down 1.7% since the beginning of the year, but at $49.78 per share it is still trading close to its 52-week high of $50.85 from January 2024. Investors who bought $1,000 worth of Central Garden & Pet's shares 5 years ago would now be looking at an investment worth $1,593.
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