Central Garden & Pet Company (NASDAQ:CENT) Q1 2023 Earnings Call Transcript

Karru Martinson: Good afternoon. Just on the Pet side and the consumer behavior, certainly it sounds like dog and cat, you’re seeing that resilience. The pet is a family member, but on the aquatic side, is it that the consumer is not shelling out for the durable goods or not getting involved in a new category or perhaps not replacing the fish when it dies?

Tim Cofer: Yes, on the aquatics, which we did call out, that’s a durable product, right? And we have seen, live animal sales slowing and a bit of a decline. And that does impact durable purchases. When somebody does buy that live fish, they often buy a fish tank, right? When somebody does buy the guinea pig, they often buy a small animal enclosure. So that, certainly has had an impact

Karru Martinson: Okay. And then just lastly, when you look at M&A, you mentioned it had slowed. Is it just that the financing is not there or is it that folks have kind of pulled down, pulled back and hunkered down and saying, I’m not going to sell into this environment?

Niko Lahanas: Yes, I think, it’s more the latter, especially for us because, our balance sheet is in good shape. So we are, a great buyer from the standpoint of financing and whatever we can’t finance from the balance sheet, we can get, on the outside. So it’s really more the latter. We’re not seeing the volume of deals out there that we saw 12 months, 18 months ago. And again, I think just looking at the public markets and the volatility that’s there, I think, a lot of folks are scratching their heads in terms of, what’s deemed a fair valuation in this day and age. And then especially in our categories, that got such a great lift during COVID and for the most part, they’re starting to flatten out. And so if you’re a seller, you may opt to wait and see how things play out, so just the overall volume is a little more muted.

Karru Martinson: Got it. Thank you very much guys. Appreciate it.

Tim Cofer: Thank you.

Operator: And we have reached the end of the question-and-answer session. I’ll now turn the call back over to Tim Cofer for closing remarks.

Tim Cofer: Thanks everyone for your continued interest at Central Garden & Pet. We wish everyone a good week.

Operator: And this concludes today’s conference, and you may disconnect your lines at this time. Thank you for your participation.