Central Garden & Pet earnings better than expected

Central Garden & Pet Co. reported better-than-expected earnings for the fifth successive quarter, thanks to its pet division.
The company reported fourth quarter earnings of 1 cent per share – the first time the company reported positive earnings in the last quarter since 2009. A year ago, the company reported a loss of 12 cents per share.
Net sales were up 3.2% year over year to US$386.4 million. Gross profit was up 0.4% to $108 million.
Net sales in the company’s pet segment were up 8.5% year over year to US$235.6 million. The segment’s operating income was up thanks to improved margins in the dog and cat categories, higher professional business volume and sales, and reduced marketing expenses in the flea and tick business.

Previous quarter

In August, Central Garden & Pet reported its third quarter sales increased to US$459.4 million compared with US$438.0 million for the third quarter of 2014. Adjusted sales for the third quarter of 2014 were US$445.0 million.
Third quarter sales for the pet segment increased US$11.0 million, or 4.8 percent, from the same period a year ago to US$238.1 million, due in large part to higher professional revenues and higher sales of other manufacturers' products.

PetSmart, Petco eyeing merger possibility?

PetSmart Inc. is exploring the possibility of acquiring Petco Holdings Inc., according to reports.
The two companies explored a merger possibility in 2014, but PetSmart ruled out a deal with Petco in 2014 in favor of a buyout by private equity consortium led by BC Partners Ltd. for US$8.7 billion. At the time, PetSmart was unsure a deal with Petco would receive antitrust clearance.
If PetSmart and Petco merged, the new company would account for 30% of US pet specialty supplies stores, reports say.
PetSmart and Petco account for 20% of all pet product sales in the US, according to market research publisher Packaged Facts. The two pet retail stores had combined sales of about US$11 billion in 2014 based on Packaged Facts' estimates, with sales of natural pet products an important factor in the strong performances.
In August 2015, Petco filed for an initial public offering of stock that could value it at US$5 billion to US$6 billion, including debt.

Central Garden & Pet posts US$497.6 million in net sales

Central Garden & Pet Co. reported second quarter net sales of US$497.6 million, down 1% from US$501.6 million a year ago.
The company’s second quarter operating income was US$50 million, compared with US$44.8 million a year ago.
Sales and general administrative expenses as a percentage of sales improved to 20.1% from 20.5% a year ago.
Pet segment
Net sales for the company’s pet segment rose 2% to US$221.5 million. Partially offsetting those gains were lower wild bird feed and dog and cat revenues. Sales of other manufacturers' products increased primarily due to increased distribution and higher sales of dog food, treats and supplies. The pet segment’s branded product sales were US$168.4 million, and sales of other manufacturers’ products were US$53.1 million.
 The pet segment’s operating income was US$27.1 million, up 12% from a year ago.

PetSmart, Petco account for 20% of all US pet product sales

PetSmart and Petco account for 20% of all pet product sales in the US, according to market research publisher Packaged Facts. The two pet retail stores had combined sales of about US$11 billion based on Packaged Facts' estimates, with sales of natural pet products an important factor in the strong performances.

"Although PetSmart is public and Petco privately held, the two companies share a number of similarities. This ranges from their pet parent pitch, to their focus on national brands and private labels alike, to their emphasis on higher-margin products and services, to their leading e-commerce websites," says David Sprinkle, Packaged Facts research director. "For both chains, factoring strongly among those higher-margin products are natural products."
Aside from superior customer service and a knowledgeable staff, an important differentiator for pet specialty retailers to separate them from lower-priced mass retailers is their focus on natural products, and an increase in all-natural private label brands. In Packaged Facts' April/May 2014 Pet Owner Survey, 39% of pet owners agreed that the natural products sold in the pet specialty channel are better than those sold at mass, up from 28% in a February/March 2013 survey.
For PetSmart and Petco, natural products are a major thrust, with Petco fielding its "store-within-store" It's All Natural departments, and PetSmart — which in December 2014 agreed to be acquired for more than $8 billion by a group led by BC Partners Inc. — calling itself "the most trusted source for natural pet solutions." Both chains feature a wide array of natural brands, with category leaders including Nutro, Blue Buffalo, WellPet, Natural Balance, Merrick and Natura. 

Pet supply retailer Petsense to open 100th location

National pet supply retailer Petsense has completed construction and is preparing to open its 100^th location, a 5000-square-foot retail space in Athens, Tennessee. The new location will cap a nearly decade-long streak of expansion and help set the stage for even faster growth over the next five years, according to the company.

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"It's been a tremendous nine years for Petsense; from our beginnings in our Scottsdale office when we had a notebook of ideas but zero stores, to our current footprint across America, we've been very fortunate to connect with millions of pet owners who have helped propel us forward," said President and CEO Bob Angstead. "I am proud to say that in what can generously be described as a tough macroeconomic environment, Petsense has consistently been a market leader in store count growth, overall sales growth and comparable store sales growth."

Special sections at Global Pet Expo 2014 sell out

The four special sections included at the 2014 Global Pet Expo (Natural Pet, The Boutique, Everything Aquatic and What's New!) have officially sold out, according to Andrew Darmohraj, executive vice president and COO of the American Pet Products Association. The show, celebrating its 10th anniversary, will take place March 12-14, 2014, in Orlando, Fla.

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"We're thrilled to see the specialty areas sell out yet again, as they've become such an exciting and important part of the Show floor," said Darmohraj. "Having sold out in all of our special sections truly proves how much the pet industry continues to grow, and what a vast amount of new products continue to hit the market year after year."
The Natural Pet section highlights the latest in healthy, organic and environmentally friendly products. This section provides media and retailers with an opportunity to learn about green-conscious trends in the pet industry. It's the largest of all the specialty areas with nearly 200 booths.
The Boutique section covers the trendiest pet products on the market. Fashion, jewelry and pet-spa products for the most fashion-forward pets and owners are displayed. The latest in pampered pet trends like couture clothing and luxury pet beds and carriers will be revealed at The Boutique during the show.
The Everything Aquatic section provides underwater species enthusiasts with all of the up-and-coming trends and aquatic suppliers in one place to showcase the newest water pet trends in 2014.
Reserved for first-time exhibitors only, the What's New! section is a great place for buyers and media to visit with 150 new companies in one convenient area on the massive show floor.

Europe pet retailers look to growth in 2014

Pets at Home Group has announced its intention to go public and Fressnapf Group is looking to expand as the European pet retailers turn to growth in 2014.

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Pets at Home
The initial public offering of Pets at Home is expected to value the pet store and veterinary surgery chain at £1.5 billion (US$2.51 billion). The company was bought in 2010 by US private equity group KKR, and aims to reduce its debts and aid expansion plans with the move.
"This is a very exciting time for Pets at Home as we look to drive our expansion program in the UK to over 500 stores, more than 700 veterinary practices and in excess of 300 groom rooms in the medium term," said Pets at Home CEO Nick Wood. The company's like-for-like revenues grew by 2.4% and underlying earnings grew 11.1% to £87 million (US$145.3 million) in the 40-week period to Jan. 2, 2014. This number is expected to reach £110 million (US$183.7 million) by the end of the year in March.
Fressnapf Group
Fressnapf Group ended 2013 with a 6.7% increase in turnover, according to the company. Its gross turnover was €1.6 billion (US$2.2 billion) and it beat the €1 billion (€1.012 billion; US$1.4 billion) mark in Germany for the first time. The increase in gross turnover via the online channel was up 76% compared to 2012, at €47.8 million (US$64.9 million).
The Fressnapf Group increased by 3.4% in existing stores compared with 2012 numbers, according to the company, and international stores in particular saw positive growth. "We are pleased that our stores in Denmark, France and Italy showed particularly outstanding growth in 2013," said Torsten Töller, founder and proprietor of Fressnapf | Maxi Zoo. "Poland is another success story. We opened in Poland a little over a year ago, and since then the three Maxi Zoo branches have done so well that we plan a total of six new stores for 2014. We endeavor to achieve profitable growth in all Fressnapf Group countries and to establish and/or expand our market leadership." 
The Fressnapf Group plans for a total of about sixty new stores in 2014, approximately 20 of which will open in Germany.

Kriser’s petfood store opens first Texas location

Kriser's, an all-natural petfood store, has opened its first Texas, USA, location in Houston, according to a report.

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Kriser's, which offers petfood, supplies and grooming services, opened its first store in 2006 in Chicago. The Houston location will bring its number of stores to 23.
Its local competitors include Natural Pawz, which has 12 Houston locations and three Mini Pawz stores inside pet resorts.

US pet product supplier Central Garden & Pet reports Q1 results

US pet product supplier Central Garden & Pet Company reported 2014 first-quarter net sales of US$290.5 million, compared with US$292.5 million in the first quarter of 2013. The company's first-quarter operating loss improved to US$8.4 million, compared to an operating loss of US$13.1 million in the comparable period of 2013, according to the company. 

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"Our first quarter showed some improvement," said John Ranelli, president & CEO of Central Garden & Pet. "Our focus on the customer and operational and financial fundamentals is beginning to yield results. I am pleased we are starting to see improved performance from the changes we are making."
Net sales for the garden segment increased US$8.6 million, or 9% from the same period in 2013, to US$105.9 million. The garden segment's branded product sales were US$92.8 million and sales of other manufacturers' products were US$13.1 million. First-quarter net sales for the pet segment declined US$10.6 million, or 5% from the same period in 2013, to US$184.6 million. According to the company, lower sales of wild bird feed and aquatics products were the most important reasons for the declining sales.
The pet segment's branded product sales were US$140.5 million and sales of other manufacturers' products were US$44.1 million. The pet segment's operating income was US$14.4 million, compared to US$10.2 million in the same period in 2013, according to the company.

Midwestern grocery store seeks pet products made in US

Made in USA Certified has partnered with Daymon Worldwide to create an opportunity for the petfood industry to get products on the shelves of a major Midwestern grocery store in an end cap kiosk dedicated to pet products made in the US.

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This is a branding and distribution opportunity to increase market share and brand awareness. Made in USA Certified is looking for petfood products and treats that are eligible to be displayed in this special rollout in 40 stores across the Midwest.  
To qualify, companies must have the ability to stock the shelves in inventory and be made in the US.
The promo pricing for this initiative expires February 20, 2014, as the retailer deadline to participate is fast approaching with an anticipated rollout March 1.

Petland expands to Central, South America

International pet specialty group Petland is expanding its franchise borders into Central and South America, with stores opening in Brazil in early 2014. A master franchise agreement has also been signed for stores to open in El Salvador, Nicaragua, Guatemala and Honduras, according to the company. 

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"We are pleased with the opportunity to expand our international family," said Petland President and CEO Joe Watson. "Petland stores in Brazil and in Central America will make a positive, consistent impact on overall pet retail and will provide a unique, convenient pet shopping experience for families looking for a new pet or buying supplies for their current pets."
Petland Inc. is a franchise operation with full-service retail pet centers across the US, Canada, Japan, China, Mexico, Brazil and South Africa.

New survey looks at pet adopters' petfood brand choices

Pethealth Inc. published aggregate results for its third online survey of new cat and dog adopters. The April 2013 Adopter Survey revisits and provides an update on the company's first survey on petfood and pet specialty retail purchasing behavior of new pet adopters, published in May 2012.
The survey aimed to determine the difference in purchasing behavior between those who adopt from an animal welfare organization and those who adopt a pet from the same organization's satellite location within a pet specialty retailer; determine if shelter petfood programs, which feature the distribution of free bags of petfood to new adopters, create loyalty among adopters for those brands, and if animal welfare organizations or pet specialty retailers have a greater impact on that brand's loyalty; and determine the degree to which pet adopters purchase pet supplies and petfood items online.
The survey found that about 83 percent of pet adoptions took place in animal welfare organizations, nearly unchanged from a year ago. At the point of adoption, 33 percent of pet owners said they were provided a bag of complimentary petfood, 5.2 percent of which said they were subsequently contacted by the petfood company. Of those who received complimentary food, Hill's Science again remained the leader at 45 percent.
However, 78 percent of respondents indicated that they now purchase a different brand of petfood from what they were provided at the time of adoption. Purina continued to lead as the top food manufacturer with pet adopters, 16.7 percent of whom indicated they feed newly adopted pets Purina Pro Plan or Purina ONE, followed by Science Diet (11.8 percent) and Blue Buffalo (9.4 percent). 
More than 7,000 pet owners completed the survey. Survey respondents included new adopters of dogs and cats during the 13-month period from March 2012-13. 

SuperZoo University to feature animal wellness, business development, technology courses

SuperZoo, the national show for pet retailers, will take place July 23-25 in Las Vegas, Nevada, USA, offering a number of resources for companies, including an enhanced SuperZoo University. 
SuperZoo University is an educational program for pet retailers, which offers seminars on marketing trends and technologies, animal wellness education, hands-on grooming demonstrations and more. The curriculum is divided into three tracks: Business Development, Animal Wellness and Technology. The School of Animal Wellness will feature doctors from Horn discussing animal species, new feeds and other health issues, in addition to an "ask the expert" panel session on pet nutrition.
Other new classes in the tracks include: Mystery Shopping: Pull Out the Microscope for Your Pet Business, What Women Want in Your Store, Search Engine 101 and Marketing Bootcamp.
SuperZoo will also feature a new Concept Store, an environment where attendees can see merchandising best practices and new technologies put to use in retail displays and other demonstrations. 

SuperZoo pet retailer show opens online registration for 2013

SuperZoo, the national show for pet retailers, has opened online registration for the 2013 event, being held at the Mandalay Bay Convention Center in Las Vegas, Nevada, USA, July 23-25.
Produced by World Pet Association, the pet retailer show offers attendees an education program, a show floor of new pet products and a new product showcse, special opportunities for groomers and more.
The show, usually held in September, moved to better align with merchandising cycles for pet retailers and provide more time before the holiday season. SuperZoo's hours have also been extended.

Central Garden & Pet reports first-quarter fiscal 2013 net sales drop

Pet product manufacturer Central Garden & Pet reported net sales of US$292.5 million for first-quarter fiscal 2013, ended December 29, 2012, a 3 percent decrease over the same period a year ago. The company's pet segment net sales fell 2 percent (US$4.1 million) to US$195.2 million for first-quarter 2013 compared to the same period in 2012.
The company attributes lower net sales in its pet segment to lower sales of dog and cat products. The pet segment's branded-product sales were US$154.2 million and Central's sales of other manufacturers' products were US$41 million. Operating income for the pet segment rose to US$10.2 million for first-quarter fiscal 2013 compared to US$9.7 in the same period a year ago, thanks to improvements in the company's equine business.
Overall, Central Garden & Pet reported a first-quarter operating loss of US$13.1 million, compared to US$11.3 million during the same period in fiscal 2012, due to lower sales and gross margins. First-quarter fiscal 2013 net loss was US$15.3 million, compared to US$13.1 million during the same period in fiscal 2012.

PetSmart posts US$82 million in net income for third-quarter 2012

Petfood and supplies retailer PetSmart posted better-than-expected results in its recently released earnings report for third-quarter 2012 and raised its earnings outlook for the rest of the year.
Net income totaled US$82 million in the third quarter of 2012, up from US$56 million in third-quarter 2011. Total sales for the third-quarter 2012 increased 9 percent to US$1.6 billion.
Over the past five years, shares of the company have grown more than 150 percent. Earnings per share for the third quarter of 2012 totaled US$0.75, up 50 percent compared to US$0.50 per share at the same time in 2011. The company raised its earnings-per-share guidance for all of 2012 from the previous range of US$3.30 - $3.40 to US$3.47 - $3.51.
The company also announced that Chip Molloy, executive vice president and chief financial officer, will resign in early 2014 to spend more time with his family. Molloy will continue in his current role until June 2013 and will remain with the company as an advisor until March 2014. 

PetFlow ships US$2.5 million in pet food, supplies in July

PetFlow.com, an online pet food retailer, set a record in July by shipping more than US$2.5 million in pet food and pet supplies, and the company projects it will generate more than US$30 million in sales by the end of the year.
The online petfood retailer has seen much growth since its founding a little more than two years ago, now stocking more than 100 premium pet food brands, as well as a variety of other pet food brands and pet supplies.
“Since our inception a little more than two years ago, PetFlow.com has experienced extremely aggressive growth, but the statistic we’re most proud of is the very high return rate of our pet-owning customers,” said Alex Zhardanovsky, co-founder of PetFlow.com. “The company’s growth demonstrates that our customers see their pet as a true family member and they profoundly prefer PetFlow.com’s subscription approach to purchasing pet food and supplies when compared to the traditional, big box retailer approach to shopping.” 

More than 100,000 sign ASPCA 'No Pet Store Puppies' pledge

More than 100,000 consumers have taken the American Society for the Prevention of Cruelty to Animals' “No Pet Store Puppies” pledge to help fight puppy mill cruelty by refusing to shop at pet stores and on websites that sell puppies.
The national campaign, launched in July 2011, raises awareness about the connection between pet stores and puppy mills, with the goal of reducing the demand for puppy mill puppies by urging consumers not to purchase any pet products from a store or website that sells puppies. 
The pledge milestone was reached four days after the US Department of Agriculture proposed a new rule that would increase federal oversight of puppy mills and online dog sales. The new legislation would target these puppy mills, requiring that large-scale commercial breeders that sell puppies directly to consumers to be licensed and inspected by USDA.
“The success of our 'No Pet Store Puppies' campaign and this significant milestone send a clear message that the public does not support the inhumane breeding of dogs,” said Laurie Beacham, senior director of strategy & campaigns. “Consumer action is a critical element in the fight against puppy mills, and convincing consumers not to shop for anything at stores and on websites that sell puppies is a powerful tool in stopping the demand for puppy mill dogs.”
ASPCA's public awareness campaign also includes targeted online ads and outdoor billboards that were posted in cities across the US to raise awareness about the connection between pet stores and puppy mills and to encourage adoption of a pet from a local animal shelter or rescue organization.  

Pet care spending seems recession-proof, new survey finds

Pet spending appears to be recession-proof, according to a new survey by CouponCabin.com, which found that three-in-four US pet owners (75 percent) said the state of the economy does not affect the amount of money they spend on their pets.
The survey, conducted online April 19-23, also found that more than one-quarter (26 percent) of US pet owners said they would be willing to put their pets' healthcare needs before their own. More than one-third (34 percent) of pet owners said they spend less on their friends than they do on their pets, while thirty-two percent spend less on their family than they do on their pets and 22 percent spend less on themselves than they do on their pets.
However, nearly eight out of 10 (78 percent) of US adults said they agree that some people spend too much on their pets. When asked which purchases they considered to be too expensive to spend on a pet, 77 percent of respondents said getting a professional massage for a pet, 73 percent said paying for beauty and grooming treatments beyond what is typical, and 71 percent said extravagant pet hotels or boarding. Additionally, 48 percent of respondents said regularly buying gourmet petfood was too expensive, 44 percent said medicating pets for psychological needs, 40 percent said paying for expensive experimental health treatments, and 33 percent said buying too many toys. 
“Pets play a huge role in our society and are often treated like members of the family,” said Jackie Warrick, president and chief savings officer at CouponCabin.com. “Many people keep their pet spending within reason, but sometimes it can get out of control. It’s important to keep an eye on how much you’re spending on your animal companions and not get carried away with extravagant or unnecessary pet purchases.”

Petfood sales expected to remain strong, analyst says

Pet product retail is expected to maintain its sales volumes during this time of slow economic growth, with petfood and pet treats resilient to trade-downs because of the pet owner's attachment to their animal companions, Daniel Hofkin, an analyst at William Blair & Company LLC, told TWST.com.
“People tend to spoil and dote on their pets. They will sometimes sacrifice their own eating or spending, but especially among older families or empty nesters, pets are often considered children. And people like to treat their pets as such, not just in terms of continuing to buy them the food that they are used to, but also in terms of other products,” Hofkin said.
Hofkin says pet retailer PetSmart Inc. is well-positioned in the industry from a long-term point of view, because petfood accounts for nearly half of the company’s inventory, with pet products making up the other half.
“We don’t currently have an ‘outperform’ rating on PetSmart, primarily because we are watching the impact high gas prices and input-cost inflation will have on the traffic, particularly in hard goods. But I would say that’s more of a temporary concern, and it doesn’t appear to have materially impacted PetSmart’s results so far,” Hofkin said.