Core Viewpoint - Central Garden & Pet reported a narrower-than-expected loss in Q4 fiscal 2025, with both revenue and earnings exceeding estimates, indicating operational momentum and a strong fiscal year performance [2][3]. Financial Performance - The company posted an adjusted loss of 9 cents per share, better than the Zacks Consensus Estimate of a loss of 20 cents, and improved from an 18-cent loss in the prior year [3]. - Net sales reached $678.2 million, a 1% increase year-over-year, surpassing the Zacks Consensus Estimate of $666 million, driven by strong performance in the Garden segment [4]. - Gross profit increased to $196.5 million from $169 million a year ago, with gross margin expanding 380 basis points to 29% [5]. - The operating loss was $6.4 million, significantly improved from a $32.4 million loss reported a year earlier [6]. Segment Performance - The Pet segment generated $428 million in sales, down 2% year-over-year, impacted by the planned closure of U.K. operations [7]. - The Garden segment saw a 7% increase in net sales to $250 million, with strong performance in various product categories [9]. Financial Health - The company ended the quarter with cash and cash equivalents of $882.5 million and long-term debt of $1,191.6 million, resulting in a gross leverage ratio of 2.8 [12]. - Cash provided by operating activities was $332.5 million in fiscal 2025, compared to $394.9 million the previous year [12]. Outlook - Central Garden & Pet anticipates adjusted earnings of $2.70 per share or better for fiscal 2026, supported by margin discipline and cost efficiencies [14]. - For Q1 fiscal 2026, the company projects earnings in the range of 10-15 cents per share, down from 21 cents reported in the prior year [15]. - The consensus estimate has seen a downward trend, with a shift of -46.97% in recent estimates [16].

Key Takeaways CENT acquired Champion USA's U.S. assets to expand its livestock animal health portfolio.CENT adds the JustiFLY feed-through fly-control line to its Professional business unit.The deal strengthens CENT's position in faster-growing, sustainable livestock health solutions.Central Garden & Pet (CENT) recently expanded its animal health platform with the acquisition of the U.S. assets of Champion USA, a well-known provider of feed-through cattle fly-control solutions. The transaction broadens the ...

​Central Garden & Pet Co. (NASDAQ:CENT) is one of the Best Small Cap Value Stocks to Buy. Central Garden & Pet Co. (NASDAQ:CENT) is up more than 8% since its fiscal Q4 2025 earnings release on November 24. Recently, on December 2, Bill Chappell from Truist Financial reiterated a Hold rating on the stock without disclosing any price target. However, earlier on November 25, Bradley Thomas from KeyBanc reiterated a Buy rating on the stock with a $50 price target. ​Thomas from KeyBanc noted the company’s Q4 ...

Summary of Central Garden & Pet Company Conference Call Company Overview - **Company**: Central Garden & Pet Company (NasdaqGS:CENT) - **Date of Conference**: December 12, 2025 - **Key Speakers**: Brad Smith (CFO), Friedrich Edelmann (VP of Investor Relations and Corporate Sustainability) Key Points Leadership and Organizational Changes - The company has shifted from a centrally driven, process-heavy model to a more agile, business unit-led culture under new CEO Niko Lahanas, enhancing collaboration and trust across the organization [3][4][5] Market Share and Product Innovation - In the past year, Central gained market share in the garden segment and held share in the pet segment, despite challenges in exiting unprofitable categories and e-commerce pricing issues [6][7] - The company is optimistic about growing market share in both segments in 2026 due to improved product placements and distribution gains [7] - Innovation efforts are ongoing, with a focus on digital marketing capabilities to drive sales and brand awareness [8][9] Pet Segment Insights - The pet segment is primarily focused on dogs (90%) and cats (10%), with cat ownership continuing to grow post-COVID due to lower costs and easier management [10][12] - Demand for small dogs, fish, and small animals is stabilizing, with expectations for a turnaround in growth by 2026 [13] Garden Segment Outlook - The garden segment finished the year with the highest point of sale (POS) despite challenging weather conditions, indicating strong performance in wild bird, grass seed, fertilizer, and packet seed categories [14][15] - The company is optimistic about growth in the garden segment, especially if weather conditions improve [16][19] E-commerce Strategy - E-commerce accounts for over 25% of the pet business and is rapidly growing in the garden segment, with a focus on enhancing digital marketing and direct-to-consumer capabilities [20][21] - The company is leveraging AI and other technologies to improve marketing efficiency and customer engagement [22] Acquisition Strategy - Central is looking to deploy nearly $900 million in cash for acquisitions, focusing on high-growth, high-margin consumables, particularly in the pet segment [24][25][26] - Cat products represent a significant growth opportunity due to underrepresentation in the company's portfolio [26] Cost and Simplicity Initiatives - The "Cost and Simplicity" initiative aims to eliminate unnecessary costs and improve cash flow, contributing significantly to margin expansion [27][28] - The company has closed approximately 20 facilities and exited unprofitable businesses, with ongoing efforts to find further cost-saving opportunities [28] Financial Performance and Margin Outlook - The company anticipates sustaining or modestly expanding margins despite cost headwinds from tariffs and other factors, supported by cost-saving initiatives [32][33] - Recent financial results have been strong, with record EBIT and EBITDA, indicating a successful transformation towards a simpler, higher-margin business model [51][52] Tariff Impact - The company faces a $20 million headwind from tariffs, but has managed to pass most of these costs onto customers, maintaining competitive pricing [36][44] Investor Relations and Future Outlook - Central's structural transformation, strategic investments in e-commerce, and strong customer relationships position it well for future growth [51][52][53] - The company is optimistic about consolidating market share and believes it is well-positioned compared to competitors [53] Conclusion Central Garden & Pet Company is navigating a transformative phase with a focus on agility, innovation, and strategic growth in both the pet and garden segments. The leadership changes and ongoing initiatives are expected to drive future performance and market share gains.

Core Insights - The article emphasizes a long-term investment philosophy focused on fundamental analysis, targeting companies with strong competitive advantages and consistent free cash flow growth [1]. Group 1: Investment Philosophy - The investment approach is centered on identifying undervalued stocks with growth potential and avoiding overvalued stocks [1]. - The analyst believes in the power of long-term investing over short-term trading tactics, which has proven effective in navigating market complexities [1]. Group 2: Professional Background - The analyst has a background in business and economics, providing a solid foundation for investment analysis [1]. - Currently, the analyst is associated with a local brokerage firm and contributes to Seeking Alpha, aiming to share deep analytical insights with the investment community [1].

PresentationI appreciate you all for joining us. My name is Bill Reuter. I cover high-yield consumer products at Bank of America. The first initiation report I ever wrote in 2005 was on Central Garden & Pet. Yes. So this was the beginning of my journey, which has now been a pretty long one here. So very happy to have Niko Lahanas, the CEO and Andrew Hovanes, the Treasurer of Central here today. So guys, thank you for joining us. .William ReuterBofA Securities, Research Division I think maybe I'm going to st ...

Summary of Central Garden & Pet Company Conference Call Company Overview - **Company**: Central Garden & Pet Company (NasdaqGS:CENT) - **Date**: December 02, 2025 Key Points Industry Insights - **Pet Industry Trends**: The pet industry is experiencing a transition back to long-term growth rates of 2%-4% after a COVID-related surge in pet adoptions. The company is optimistic about regaining household penetration by late 2026 or 2027 [6][7][8] - **Durables and Live Animals**: The softness in durables includes live animals, with a noted decline in demand post-COVID. However, the live animal business showed growth in Q4, indicating potential recovery [6][7] - **Cat Products**: There is an opportunity for growth in the cat product segment, which has been historically underserved. The company aims to increase its exposure in this category [10] Product Innovation and Strategy - **Focus on Innovation**: The company is shifting from a cost and cash focus to a growth agenda, emphasizing innovation and M&A to drive top-line growth [11][12] - **SKU Rationalization**: Continuous SKU rationalization is a priority, with a focus on private label partnerships to enhance retail relationships [13][31] - **Equine Products**: The equine segment is performing well due to effective branding and marketing strategies, including collaborations with influencers [15][17] Market Dynamics - **Aquatics Category**: The aquatics segment has been soft, attributed to a lack of innovation. The company is working on improving consumer success in this area through better product engineering and technology integration [23][24] - **Lawn & Garden Performance**: The Lawn & Garden segment has gained shelf space and market share, driven by strong execution and partnerships with retailers [26][28] Financial Outlook - **Cash Position**: The company has a strong cash balance of nearly $900 million, with plans to allocate it towards M&A in core categories, particularly pet consumables [37][39] - **Pricing Strategy**: The company plans to implement a 1% price increase to offset rising commodity costs and tariffs, indicating a challenging pricing environment [57][58] Consumer Behavior - **Private Label vs. Branded Products**: There has not been a significant shift towards private label products yet, but the company anticipates that consumer value sensitivity may lead to increased private label performance in the future [60] Operational Challenges - **Seasonality in Lawn & Garden**: The Lawn & Garden category has been slower to transition online compared to other categories, with only 10% of sales coming from online channels. The company expects gradual growth in this area [34][35] Strategic Considerations - **Potential for Diversification**: The company is open to exploring acquisitions outside its core categories if they present strong synergies and market potential [47][49] Cost Management - **Continuous Improvement**: The company emphasizes ongoing cost-saving initiatives and operational efficiencies, with a focus on integrating acquired businesses [52][53] Conclusion Central Garden & Pet Company is navigating a transitional phase in the pet and lawn & garden industries, focusing on innovation, strategic partnerships, and effective cost management to drive growth. The company remains optimistic about future opportunities, particularly in the pet segment, while also addressing challenges in pricing and market dynamics.

Company Overview - The company is a pet and garden supplies provider located in the San Francisco Bay Area with annual net sales exceeding $3 billion [1] - It primarily focuses on branded consumables, with notable brands including Nylabone for dog treats and toys, and Pennington for fertilizers and grass seeds [1] Unique Attributes - The company's growth strategy involves acquiring businesses founded by entrepreneurs who wish to take some profits while continuing to manage and grow the companies in an employee capacity [2] - This approach fosters an entrepreneurial spirit among the general managers within the company [2]

Summary of Central Garden & Pet Company Conference Call Company Overview - Central Garden & Pet Company is a pet and garden supplies company based in the San Francisco Bay Area with annual net sales exceeding $3 billion [2][3] - The company is known for its branded consumables, including popular brands like Nylabone and Pennington [2] Core Business Insights - The company has a unique business model focused on acquiring companies with entrepreneurial founders who continue to run the businesses [3] - Central Garden & Pet operates in a recession-resistant market supported by favorable long-term demographic trends [3] - The company has strong partnerships with major retailers like Walmart and Costco, and it has low leverage and high liquidity, positioning it well for future M&A opportunities [4] Consumer Trends - The consumer base spans all ages, with Millennials being the largest cohort of gardeners and pet owners, and Gen Z rapidly increasing in both categories [5] - Consumers are focused on value for money, particularly low to mid-income shoppers, and are delaying new pet acquisitions and larger lawn and garden projects due to high HELOC rates [6] - There is a growing trend towards sustainability and health-conscious products among consumers, with over 70% of the U.S. population aged 18 to 35 engaging in some form of gardening [9][10] Business Strategy and Changes - The company has shifted focus from durable goods to consumables, with over 80% of pet sales now coming from consumables [20] - Operational changes include exiting unprofitable businesses and reducing SKUs to improve profitability [12][14] - The company is investing in innovation and consumer insights to enhance product offerings and cater to evolving consumer preferences [15][17] E-commerce and Digital Marketing - E-commerce is the fastest-growing channel, with pet sales at 27% and garden sales breaching 10% [24] - The company is transitioning to various e-commerce models, including direct-to-consumer and third-party sales, which are expected to increase profitability [25][26] - Marketing spend has shifted predominantly to digital, focusing on both lower and upper funnel strategies to build brand awareness and drive conversions [28][30] Financial Outlook and Capital Allocation - The company has significant cash reserves of nearly $900 million and is prioritizing M&A as its primary capital allocation strategy, followed by organic investments and share buybacks [37] - The company is open to exploring opportunities beyond its core categories if they are margin and growth accretive [38] Weather Sensitivity - Approximately 90% of the garden business is sensitive to weather conditions, while only about 15% of the pet business is affected [41][42] Conclusion - Central Garden & Pet Company is well-positioned for growth through strategic M&A, a focus on consumables, and leveraging e-commerce trends while navigating consumer preferences and market dynamics [4][6][38]

Financial Performance - Consolidated net sales for fiscal 2025 were $3.1 billion, with the Pet segment contributing approximately $1.8 billion and the Garden segment approximately $1.3 billion[220]. - Operating income increased by $64.7 million, or 34.9%, to $250 million in fiscal 2025, with an operating margin improvement to 8.0% from 5.8% in fiscal 2024[240]. - Gross profit rose by $53.6 million, or 5.7%, to $997.3 million, with gross margin improving 240 basis points to 31.9% in fiscal 2025[232]. - Net income for fiscal 2025 was $162.8 million, or $2.55 per diluted share, compared to $108.0 million, or $1.62 per diluted share in fiscal 2024[225]. - Total net sales for fiscal 2025 were $3,129.1 million, compared to $3,200.5 million for fiscal 2024, reflecting a decrease of 2.2%[260]. - Non-GAAP net income for fiscal 2025 was $174.2 million, or $2.73 per diluted share, compared to $142.4 million, or $2.13 per diluted share for fiscal 2024, indicating a 22.3% increase in non-GAAP net income[259]. Segment Performance - Pet net sales decreased by $30.8 million, or 1.7%, to $1.8 billion, primarily due to lower sales of durable items[230]. - Garden net sales decreased by $40.6 million, or 3.0%, to $1.3 billion, attributed to decreased sales of third-party products and the planned exit of the pottery business[231]. - The Garden segment's operating income for fiscal 2025 was $142.4 million, up from $81.9 million in fiscal 2024, showing a significant increase of 74.0%[262]. - The Pet segment's operating income for fiscal 2025 was $215.7 million, compared to $203.4 million in fiscal 2024, representing a 6.0% increase[261]. Expenses and Costs - Selling, general and administrative expenses decreased by $11.0 million, or 1.5%, to $747.3 million, but as a percentage of net sales, it increased to 23.9%[236]. - The company incurred approximately $10 million in one-time closure costs related to the wind-down of U.K. operations during fiscal 2025[222]. - The effective income tax rate increased to 24.4% in fiscal 2025 from 23.2% in fiscal 2024, primarily due to non-deductible losses from the U.K. operations wind-down[247]. - Inflation moderated in fiscal 2024 but increased in the second half of fiscal 2025, primarily due to tariffs, impacting margins and input costs[266]. Cash Flow and Financing - Net cash provided by operating activities decreased by $62.4 million, from $394.9 million in fiscal 2024 to $332.5 million in fiscal 2025[272]. - Net cash used in investing activities decreased by $60.3 million, from $105.2 million in fiscal 2024 to $44.9 million in fiscal 2025, primarily due to the acquisition of TDBBS, LLC in fiscal 2024[273]. - Net cash used in financing activities increased by $131.2 million, from $25.4 million in fiscal 2024 to $156.6 million in fiscal 2025, mainly due to higher stock repurchases[274]. - The company financed its growth through a combination of internally generated funds, bank borrowings, supplier credit, and sales of equity and debt securities[269]. Shareholder Activities - The company repurchased 3.2 million shares of non-voting common stock and 1.4 million shares of voting common stock at an aggregate cost of $148.4 million during fiscal 2025[224]. - The company has a $600 million asset-backed loan facility, which is expected to be sufficient for working capital and capital spending needs for at least the next 12 months[275]. Assets and Liabilities - Total debt outstanding as of September 27, 2025, was $1,191.7 million, slightly up from $1,190.0 million at September 28, 2024[283]. - The company has significant contractual cash obligations totaling $1.83 billion, with long-term debt obligations of $1.20 billion and interest payment obligations of $230.2 million[313]. - Long-term debt for the Parent/Issuer was $1.19 billion, with total liabilities amounting to $3.59 billion, while Guarantors had long-term debt of $100,000 and total liabilities of $580.9 million[312]. Impairments and Risks - The company recognized a non-cash impairment charge of $12.8 million in the Pet segment during fiscal 2024 due to changing market conditions[256]. - The company recognized impairment losses on intangible assets of $1.0 million, $12.8 million, and $11.5 million in fiscal years 2025, 2024, and 2023 respectively[328]. - The company performed annual goodwill impairment testing and determined that it was more likely than not that the fair values of its reporting segments were greater than their carrying amounts, thus no impairment was required for fiscal years 2024 and 2025[322][323]. Market and Currency Exposure - The company has minimal exposure to foreign currency exchange risk due to limited sales outside the United States[333]. - Purchases by U.S. subsidiaries from foreign vendors are primarily made in U.S. dollars, reducing currency risk[333]. - The international subsidiary primarily transacts in British pounds and Canadian dollars, but overall exposure remains minimal[333]. - The company does not hedge against foreign currency risks, considering them immaterial to current business operations[333].