Central Garden & Pet Company (CENT)
Pretax margin
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before tax but after interest (EBT) | US$ in thousands | 161,991 | 198,386 | 193,781 | 152,894 | 119,390 |
| Revenue | US$ in thousands | 3,310,080 | 3,338,590 | 3,303,680 | 2,695,510 | 2,383,000 |
| Pretax margin | 4.89% | 5.94% | 5.87% | 5.67% | 5.01% |
September 30, 2023 calculation
Pretax margin = EBT ÷ Revenue
= $161,991K ÷ $3,310,080K
= 4.89%
Central Garden & Pet Co.'s pretax margin is a key indicator of the company's operating efficiency and profitability before taxes. It measures the percentage of each dollar of revenue that the company retains as pre-tax profit. Analyzing the trend of the pretax margin over the past five years reveals valuable insights into the company's financial performance.
The pretax margin has experienced fluctuations over the last five years. In 2019, the pretax margin stood at 5.00%, indicating that for every dollar of revenue generated, the company retained 5.00 cents as pretax profit. Over the subsequent years, there was a gradual upward trend, reaching 5.70% in 2020 and further increasing to 5.90% in 2021. However, in 2022, there was a slight decline in the pretax margin to 5.96%, before experiencing a more noticeable decrease to 4.91% in 2023.
This downward trend in the pretax margin from 2022 to 2023 suggests a decrease in the company's efficiency in generating profits before tax. It indicates that the company's ability to retain profit from each dollar of revenue has declined, potentially due to factors such as increased operating expenses, changes in the sales mix, or a decrease in gross margin. Further investigation into the company's cost structure, revenue streams, and overall financial management is needed to understand the root causes of this decline.
Overall, the fluctuating pretax margin of Central Garden & Pet Co. indicates variations in its profitability before taxes over the past five years and warrants a closer examination of the company's financial and operational strategies to identify potential areas for improvement.
Peer comparison
Sep 30, 2023