Central Garden & Pet Company (NASDAQ:CENT.A) Q2 2018 Earnings Conference Call - Final Transcript

May 07, 2018 • 04:30 pm ET

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Central Garden & Pet Company (NASDAQ:CENT.A) Q2 2018 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Thank you. [Operator instructions] Our first question is from Bill Chappell with SunTrust Robinson Humphrey. Please proceed.

Analyst
Bill Chappell

Thanks. Good afternoon.

Executive
George Roeth

Hi, Bill.

Analyst
Bill Chappell

Hey, a couple of questions, just trying to understand the guidance and how weather plays into that. And just -- had the weather been normal? Would the numbers be even higher or in terms of looking at the guidance, are you assuming that it comes back in as a normal season in terms of the outlook for the rest of the year? Just trying to understand how much do you think was an unusual past three months for what we've seen from Scotts and from Spectrum and others. I am just trying to understand what impact it did actually have on your numbers?

Executive
George Roeth

Bill, I am not going to break it down by pieces. I will speak in general. We manage for risk across a number of variables, the garden season being one part of it. So, as we think about out guidance, we think about scenarios of what could go right, what could go wrong? As you know, we tend to be conservative and I would say that's one factor that we consider among a number of factors.

Analyst
Bill Chappell

Okay. So -- but there could be further upside, if it normalizes I guess over the next month, month and a half?

Executive
George Roeth

I am not going to jump in on that. Sorry.

Analyst
Bill Chappell

Okay. How about switching to the other products on the pet side? Should we look at this quarter as kind of a full realization of the grocery chain initiative in terms of being category manager there and is that a nice run rate for the going forward or is there still more to come in as we kind of head to the full ramp in the second quarter -- I am sorry in that fiscal third quarter?

Executive
Rodolfo Spielmann

Hi, Bill. This is Rodolfo. I will take that one. We still have at least three quarters to go on that one. While we are finalizing the work to integrate that that customer with a store-within-a-store concept, then we need to lapse that growth year-over-year. So, you will see us mentioning that for at least three more quarters.

Analyst
Bill Chappell

Okay. Great. And then, last one from me. Just in terms of the -- you talked about capex being more back-end loaded. Did we see meaningful benefits from some of the capex last year in terms of margins or is that also kind of some of the synergies margin improvement from some of last year and the important acquisition, is that still to come. I guess in particular, I thought this is the year we should see some pretty meaningful synergies for the Segrest. I don't know if we -- thought to tell whether we saw that this quarter, whether that's still to comp.

Executive
George Roeth

Well Segrest acquisition, I thought you are asking about capex, but if I'm thinking capex, if you look at...

Analyst
Bill Chappell

Well...

Executive
George Roeth

Well, let me summarize specific capex for a second.