Publicly traded Central Garden & Pet Co. announced Thursday its board of directors has approved a new $100 million share repurchase program. The company who’s brands include Kent, Aqueon, Coralife, Oceanic and Tropical Fish Hobbyist magazine, said it may buy back shares of its common stock on the open market at times and prices that management considers appropriate. Repurchasing may take place through brokers and dealers or in privately negotiated transactions.
Shares rose on the news closing yesterday at $9.26. Estimates at the current price would bring in around 10.8 million shares of the company’s total 54.8 million shares outstanding. The purpose of stock buybacks is to reduce the number of shares outstanding, boosting earnings per share and expanding the percentage size of shareholders’ stakes. Last month the company reported a slight rise in second-quarter earnings to $31.8 million, or 54 cents per share, as sales climbed 10% to $485.7 million.
As hobbyists this does spark a good sign that one of the largest pet supply companies is experiencing growth and is looking to become stronger. A 10% growth in sales last quarter is a definite indicator money is beginning to flow into the pet industry and should be seen and felt in the market. This is a good sign as the industry heads into the annual slow period over the summer so don’t expect thriving numbers from the first part of the third quarter but expect a boost later in the fall.