Central Garden and Pet (CENT) - Bear of the Day

Central Garden & Pet Company (CENT) delivered disappointing fourth-quarter 2010 results with top line continuing its sluggish performance and bottom line swinging to a loss.

We witnessed a weak Garden Products segment, with sales falling 17% due to soft demand and lower prices. However, the Pet Products segment remained the bright spot with sales increasing 5%. Although management hinted increased focus on growth during fiscal 2011, a consistent improvement in the stock has yet to be seen.

Consequently, we downgrade our recommendation to Underperform from Neutral. Moreover, we will continue to hold a negative outlook on the stock, until we see persistent improvement in the top line.
 
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