Central Garden & Pet (NASDAQ: CENT) reported Q4 EPS of $0.08, $0.02 worse than the analyst estimate of $0.10. Revenue for the quarter came in at $490.5 million versus the consensus estimate of $439.92 million.

2018 Guidance

The Company currently expects earnings per fully-diluted share of $1.62 or higher for fiscal 2018, an increase of 6.6% or more from the prior year on a GAAP basis despite fiscal 2018 having one less week than fiscal 2017. On a non-GAAP basis, excluding the Garden facility sale from the first quarter of 2017, the expected earnings increase is 8.0% or higher. While the Company expects the strong execution of its strategies to continue its momentum into 2018 and beyond, it does expect some quarterly bumpiness, due to such factors as investment timing, how the quarterly calendar falls versus the prior year, and the impact of a highly seasonal JV in which it invested in fiscal 2017.

In addition, the guidance excludes any impact from new M&A activities and any potential change to the Company\'s tax rate. A recent accounting standard changes the GAAP requirements for the way companies are required to account for some of the impacts related to non-cash equity compensation expense and is expected to impact the Company in 2018 and in future years. The Company believes the change will result in a lower tax rate in 2018, although the impact could vary depending on a number of factors, including the price of the Company\'s stock. The Company plans to provide an estimate as it gains more clarity on the impact as it moves through the fiscal year. Capital expenditures are expected to be approximately $40 million in the fiscal 2018.

Mr. Roeth said, "As we look ahead to 2018, we continue to be committed to our strategy, which is working. We have a long runway of opportunities and continue to stay focused on growing revenues organically by reinvesting cost savings in sustainable, profitable organic growth and using our cash flow and debt capacity to add additional growth through disciplined acquisitions. All-in-all, we continue to be very optimistic about the future."

GUIDANCE:

Central Garden & Pet sees FY2018 EPS of $1.62, versus the consensus of $1.67.

Highlights:

Fourth Quarter Non-GAAP Operating Income, Net Earnings and EPS

• Non-GAAP results for the fourth quarter of 2016 exclude non-cash impairment charges of $18.4 million including $1.8 million that impacted operating income;
• Non-GAAP operating income was $14.4 million and non-GAAP operating margin was 2.9%; compared to $14.8 million and 3.6% in the fourth quarter of fiscal 2016. The decline was due in large part to the higher SG&A spending to drive future demand and a $2.3 million charge related to a contingent earn-out for a fiscal 2017 Pet segment acquisition;
• Non-GAAP net income of $4.3 million decreased $2.3 million compared to the fourth quarter a year ago; and
• Non-GAAP earnings per diluted share of $0.08 decreased from $0.13 in the fourth quarter a year ago.

For earnings history and earnings-related data on Central Garden & Pet (CENT) click here.