Central Garden & Pet Co (NASDAQ:CENT) - a marketer and producer of pet food and other products - announced the earnings results for fiscal year 2016. Net sales increased 10.8% to $1.83 billion compared to $1.65 billion a year ago. Branded product sales of $1.44 billion increased 9.7% and sales of other manufacturers' products of $386.2 million rose 15.0%. Organic sales growth, adjusting for businesses purchased or exited that impacted the year, rose 4.2%. The Pet and Garden segments both experienced organic growth.
Pet segment
Fourth quarter net sales for the Pet segment increased 14.9% to $270.7 million, from the same period a year ago, driven in large part by acquisitions. The Pet segment's branded product sales were $214.6 million, up 18.7% compared to the fourth quarter a year ago, and sales of other manufacturers' products were $56.0 million, an increase of 2.3%. Pet organic sales grew 2.6%, on strength in most of the segment's categories. The Pet segment's operating income rose 23.8% compared to the fourth quarter a year ago to $22.6 million and included a $1.8 million non-cash impairment charge. In the prior year, there was a non-cash charge of $7.3 million for intangible impairments. Pet operating margin, aided by the lower impairment charges compared to the prior year, rose to 8.3%, an increase of 60 basis points compared to the fourth quarter a year ago. Excluding the intangible charges in both years, non-GAAP operating margin declined from the fourth quarter of 2015, primarily due to the Company's investments for future growth. The Company expects more favorable operating margin comparisons in the year ahead.
2017 Guidance
The Company currently expects earnings per fully-diluted share of $1.34 or higher for fiscal 2017, an increase of 6% or more from the prior year. Fiscal 2017 will have 53 weeks compared to 52 weeks in fiscal 2016. The extra week is expected to account for approximately $0.01 per share of 2017 earnings. Capital expenditures are expected to be approximately $40 million to $45 million on an increase in investment to drive future growth.
