Core Insights - Central Garden & Pet Company (CENT) reported its fourth-quarter fiscal 2025 results, with both revenue and earnings exceeding Zacks Consensus Estimates and showing improvement from the previous year, marking a record fiscal year for the company [1][2][10] Financial Performance - The company posted an adjusted loss of 9 cents per share, better than the expected loss of 20 cents and an improvement from the 18-cent loss in the prior-year quarter [2] - 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 [3] - Gross profit increased to $196.5 million from $169 million a year ago, with gross margin expanding by 380 basis points to 29% [4] - Adjusted EBITDA rose to $25.7 million, up from $16.8 million in the previous year [5] Segment Performance - The Pet segment generated $428 million in sales, down 2% year over year, impacted by the closure of U.K. operations and reduced sales of lower-margin products, although it gained market share in consumables [7] - The Garden segment saw a 7% increase in net sales to $250 million, benefiting from favorable weather and an extended selling season, with e-commerce demand growing significantly [9] Cost and Expenses - Adjusted SG&A expenses rose 7% to $198.1 million, representing 29.2% of net sales, driven by productivity investments and higher spending on innovation [6] 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, with a gross leverage ratio of 2.8 [12] Outlook - For fiscal 2026, the company anticipates adjusted earnings of $2.70 per share or better, supported by margin discipline and strategic investments in innovation and digital technology [14] - For the first quarter of fiscal 2026, earnings are projected to be between 10-15 cents per share, down from 21 cents in the prior year [15]

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Core Insights - Central Garden (CENT) reported a quarterly loss of $0.09 per share, better than the Zacks Consensus Estimate of a loss of $0.20, and an improvement from a loss of $0.18 per share a year ago [1] - The company achieved an earnings surprise of +55.00% and has surpassed consensus EPS estimates in all four quarters over the past year [2] - Revenues for the quarter ended September 2025 were $678.18 million, exceeding the Zacks Consensus Estimate by 1.82% and showing growth from $669.49 million year-over-year [3] Financial Performance - Central Garden's earnings surprise of +55.00% indicates strong performance relative to expectations [2] - The company has consistently outperformed revenue estimates, achieving this in two of the last four quarters [3] - The current consensus EPS estimate for the upcoming quarter is $0.22, with projected revenues of $661.29 million, and for the current fiscal year, the EPS estimate is $2.73 on revenues of $3.16 billion [8] Market Position - Central Garden shares have underperformed the market, losing approximately 16.8% since the beginning of the year, while the S&P 500 has gained 12.3% [4] - The Zacks Rank for Central Garden is currently 3 (Hold), suggesting that the stock is expected to perform in line with the market in the near future [7] - The Consumer Products - Discretionary industry, to which Central Garden belongs, is currently ranked in the bottom 27% of over 250 Zacks industries, indicating potential challenges ahead [9]

Financial Data and Key Metrics Changes - Net sales for fiscal 2025 were $3.1 billion, a decrease of 2% due to proactive decisions to reduce exposure to lower-margin businesses and the transition of two third-party product lines to a direct-to-retail model [14][15] - Non-GAAP gross profit increased to $1 billion, up 4.5%, with non-GAAP gross margin expanding 210 basis points to 32.1% [15] - Non-GAAP net income totaled $174 million, up 22%, with record GAAP and non-GAAP earnings per share of $2.55 and $2.73, respectively [17] Business Line Data and Key Metrics Changes - In the pet segment, net sales were $428 million, a decrease of 2% due to the closure of U.K. operations and lower durable sales, partially offset by strong growth in animal health businesses [21] - The garden segment saw net sales of $250 million, a 7% increase, benefiting from an extended selling season and improved sell-through [22] - Consumables now represent approximately 84% of total pet segment sales, highlighting the strength of the core business [21] Market Data and Key Metrics Changes - E-commerce represented 27% of total pet segment sales, consistent with previous quarters, indicating steady consumer engagement across digital platforms [22] - Garden e-commerce sales grew at a double-digit rate, surpassing 10% of total segment sales for the first time [23] Company Strategy and Development Direction - The company is focused on a "central-to-home" strategy, streamlining operations, consolidating facilities, and optimizing the portfolio to enhance cost structure and drive sustainable growth [5][9] - Strategic investments are being made in innovation, e-commerce, and digital technology, with a key priority on making data AI-ready [10][11] - The company is actively pursuing margin-accretive consumable businesses for growth through M&A, although market engagement has been limited [12] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for fiscal 2026, anticipating challenges due to tariffs and consumer confidence but remains committed to delivering profitable growth [9][61] - The company expects non-GAAP earnings per share for fiscal 2026 to be $2.70 or better, supported by margin expansion and operational performance [9][26] - Management noted that the bifurcation of income is affecting consumer behavior, impacting both pet and garden categories [61] Other Important Information - Cash flow from operations was $333 million, with a strong liquidity position reflected in cash and cash equivalents totaling $882 million [24][25] - The company plans to invest approximately $50 million-$60 million in CapEx for maintenance and productivity initiatives [27] Q&A Session Summary Question: Can you discuss the operating margin outlook for the upcoming fiscal year? - Management indicated intentions to expand margins into 2026, though the pace may be slower due to previously captured efficiencies [32][33] Question: What is the outlook for the garden segment in the upcoming season? - Management expressed cautious optimism, citing increased distribution points and strong execution, but noted that weather remains a significant factor [35][36] Question: Can you quantify the impact of tariffs on the fourth quarter? - Tariffs were estimated to be around $7 million-$8 million in the fourth quarter [42] Question: How is the company navigating pricing with retail customers? - Management is in negotiations with customers regarding pricing adjustments to offset costs, with expectations to finalize discussions soon [50][51] Question: What is the company's view on pet ownership trends? - Management noted that pet ownership trends appear to be stabilizing, with slight growth observed in Q4 [68][70] Question: What is the company's capital allocation strategy given the strong cash position? - Management is focused on M&A opportunities while remaining opportunistic with share repurchases, indicating a preference for growth through acquisitions [71][88]

Financial Data and Key Metrics Changes - Net sales for fiscal 2025 were $3.1 billion, a decrease of 2% due to proactive decisions to reduce exposure to lower-margin businesses and the transition of two third-party product lines to a direct-to-retail model [15][16] - Non-GAAP gross profit increased to $1 billion, up 4.5%, with non-GAAP gross margin expanding 210 basis points to 32.1% [16] - Non-GAAP net income totaled $174 million, up 22%, with record GAAP and non-GAAP earnings per share of $2.55 and $2.73, respectively [18] Business Line Data and Key Metrics Changes - In the pet segment, net sales were $428 million, a decrease of 2%, primarily due to the closure of U.K. operations and lower durable sales [22] - The garden segment saw net sales of $250 million, a 7% increase, driven by favorable weather and improved sell-through [24] - Consumables now represent approximately 84% of total pet segment sales, highlighting the strength of the core business [22] Market Data and Key Metrics Changes - E-commerce represented 27% of total pet segment sales, consistent with previous quarters, indicating steady consumer engagement [23] - Garden e-commerce sales grew at a double-digit rate, surpassing 10% of total segment sales for the first time [24] Company Strategy and Development Direction - The company is focused on a central-to-home strategy, streamlining operations, and optimizing its portfolio to enhance cost structure and position for sustainable growth [5][10] - The company plans to invest in innovation, e-commerce, and digital technology, with a key priority of making data AI-ready [11][12] - M&A remains a strategic lever for growth, with a focus on margin-accretive consumable businesses [13] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for fiscal 2026, anticipating challenges due to tariffs and consumer confidence [62] - The company expects non-GAAP earnings per share for fiscal 2026 to be $2.70 or better, supported by margin expansion and operational performance [10][27] - Management noted that the bifurcation of income is affecting consumer behavior, but they are not seeing significant impacts in specific channels [100][101] Other Important Information - Cash flow from operations was $333 million, with a strong liquidity position reflected in cash and cash equivalents totaling $882 million [26] - The company plans to invest approximately $50 million-$60 million in CapEx for maintenance and productivity initiatives [28] Q&A Session Summary Question: Can you discuss the operating margin outlook for the upcoming fiscal year? - Management indicated intentions to expand margins into 2026, though the pace may be more modest due to previous gains [33][34] Question: What is the outlook for the garden category in 2026? - Management expressed cautious optimism, citing an expected increase in distribution points and the importance of weather conditions [36][37] Question: Can you quantify the impact of tariffs in the fourth quarter? - Tariffs were estimated to be around $7 million-$8 million in the fourth quarter [43] Question: How is the company navigating pricing with retail customers? - Management is in negotiations with customers regarding pricing adjustments to offset costs, with expectations to finalize discussions soon [51][52] Question: What is the company's view on pet ownership trends? - Management noted that pet ownership trends are stabilizing, with slight growth observed in Q4 [70][71] Question: What is the company's capital allocation strategy moving forward? - Management is focused on M&A opportunities while remaining opportunistic with share repurchases, emphasizing the importance of finding the right deals [72][89]

Financial Data and Key Metrics Changes - Net sales for fiscal 2025 were $3.1 billion, a decrease of 2% due to lower demand in pet durables and the transition of product lines [14][17] - Non-GAAP gross profit increased to $1 billion, up 4.5%, with non-GAAP gross margin expanding 210 basis points to 32.1% [15][17] - Non-GAAP net income totaled $174 million, up 22%, with record GAAP and non-GAAP earnings per share of $2.55 and $2.73, respectively [17] - Adjusted EBITDA for the year was $371 million compared to $334 million [17] Business Line Data and Key Metrics Changes - In the pet segment, net sales were $428 million, a decrease of 2%, impacted by the closure of U.K. operations and lower durable sales [20] - The garden segment saw net sales of $250 million, a 7% increase, driven by favorable weather and improved sell-through [21] - Consumables now represent approximately 84% of total pet segment sales, highlighting the strength of the core business [20] Market Data and Key Metrics Changes - E-commerce represented 27% of total pet segment sales, consistent with previous quarters, indicating steady consumer engagement [21] - Garden e-commerce sales grew at a double-digit rate, surpassing 10% of total segment sales for the first time [22] Company Strategy and Development Direction - The company is focused on a central-to-home strategy, streamlining operations, and optimizing its portfolio for sustainable growth [4][9] - Strategic investments are being made in innovation, e-commerce, and digital technology to enhance competitive advantage [10][11] - The company aims to balance cost management with targeted investments to fuel organic growth [10] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for fiscal 2026, anticipating challenges due to tariffs and consumer confidence [38][46] - The company expects non-GAAP earnings per share to be $2.70 or better for fiscal 2026, supported by margin expansion and operational performance [9][24] - Management highlighted the importance of weather conditions for the garden segment's performance in the upcoming season [29][46] Other Important Information - The company has a strong balance sheet with cash and cash equivalents totaling $882 million, providing flexibility for growth investments [24] - The ongoing focus on working capital efficiency resulted in a $36 million reduction in inventory [23] Q&A Session Summary Question: Can you discuss the operating margin outlook for the upcoming fiscal year? - Management indicated intentions to expand margins into 2026, though the pace may be slower due to previous efficiencies being realized [27][28] Question: What is the outlook for the garden category in 2026? - Management expressed cautious optimism, citing an expected increase in distribution points and strong execution, but noted that weather will be a significant factor [29] Question: Can you provide details on corporate expenses in Q4? - Corporate expenses increased due to quarterly timing variations and investments to support commercial growth [30] Question: What was the impact of tariffs in Q4? - Gross tariffs were approximately $7 million to $8 million in the fourth quarter [31] Question: How is the company addressing pricing with retail customers? - Management stated that negotiations with customers are ongoing, with expectations to finalize discussions soon [33] Question: What is the company's view on pet ownership trends? - Management noted that pet ownership trends appear to be stabilizing, with slight gains observed in Q4 [41] Question: What is the company's approach to capital allocation? - The company is focused on M&A opportunities while maintaining a strong cash position, with share repurchases being opportunistic [43][50]

Q4 & FY 2025 Investor Presentation 11.24.2025 Key Themes & Outlook Niko Lahanas, CEO Financials & Segments Brad Smith, CFO Management Q&A Niko Lahanas, Brad Smith, J.D. Walker, John Hanson Q4 and FY25 Investor Presentation 2 Forward-Looking Statements The statements contained in this presentation which are not historical facts, including statements concerning productivity initiatives and earnings guidance for fiscal 2026, are forward-looking statements that are subject to risks and uncertainties that could ...

Financial Performance - Fiscal 2025 net sales were $3.1 billion, a decrease of 2% from $3.2 billion in fiscal 2024[1][5] - Fiscal 2025 GAAP EPS increased to $2.55 from $1.62, while non-GAAP EPS rose to $2.73 from $2.13[1][8] - Operating income for fiscal 2025 was $250 million, up from $185 million, with an operating margin increase to 8.0% from 5.8%[6][8] - The company reported a net loss attributable to Central Garden & Pet Company of $9,806,000 for the three months ended September 27, 2025, compared to a net loss of $34,158,000 in the same period of 2024, showing an improvement of approximately 71.2%[33] - The company reported a GAAP net loss of $9.8 million for the three months ended September 27, 2025, compared to a loss of $34.2 million for the same period in 2024[46] - Non-GAAP net income attributable to the company for fiscal year 2025 was $174.2 million, up from $142.4 million in fiscal year 2024, reflecting a significant increase[46] Margins and Profitability - Gross margin expanded by 240 basis points to 31.9% from 29.5%, driven by productivity initiatives[5][8] - Gross profit for the fiscal year ended September 27, 2025, was $997,336,000, compared to $943,735,000 in 2024, indicating an increase of about 5.66%[33] - The company reported a gross margin of 31.9% for fiscal year 2025, compared to 30.0% for fiscal year 2024[48] - Adjusted EBITDA for fiscal year 2025 was $371.0 million, compared to $334.2 million for fiscal year 2024, indicating growth[52] Segment Performance - The Pet segment reported net sales of $428 million, a slight decrease from $435 million, primarily due to the closure of U.K. operations[12][13] - The Garden segment saw net sales increase to $250 million from $234 million, driven by improved consumer demand[14] - The Pet segment's non-GAAP operating income for the three months ended September 27, 2025, was $30.6 million, compared to $34.6 million for the same period in 2024[50] - The Garden segment's GAAP operating income for fiscal year 2025 was $142.4 million, a significant increase from $81.9 million in fiscal year 2024[51] Cash and Debt Management - Cash and cash equivalents at the end of fiscal 2025 were $882 million, compared to $754 million in the prior year[16][17] - Total debt remained unchanged at $1.2 billion, with gross leverage at 2.8x, below the target range of 3.0 to 3.5x[17] - Cash and cash equivalents at the end of the fiscal year were $898,433,000, up from $768,403,000 at the end of the previous fiscal year, marking an increase of approximately 16.9%[35] - The company’s total liabilities increased to $2,040,138,000 as of September 27, 2025, compared to $1,878,980,000 as of September 28, 2024, representing a rise of about 8.6%[31] Future Outlook - The company expects fiscal 2026 non-GAAP EPS to be $2.70 or better, reflecting continued margin discipline and cost efficiencies[21] - Capital spending for fiscal 2026 is projected at approximately $50 million to $60 million, focusing on maintenance and targeted growth initiatives[22] Operational Efficiency - Cash flows from operating activities for the fiscal year ended September 27, 2025, were $332,506,000, a decrease from $394,892,000 in the previous year, reflecting a decline of about 15.8%[35] - Operating loss for the three months ended September 27, 2025, was $6,400,000, an improvement from an operating loss of $32,408,000 in the same period of 2024[33] - Non-GAAP adjustments for the three months ended September 27, 2025, amounted to $5,751,000, while for the same period in 2024, it was $21,047,000[53] Other Financial Metrics - Total current assets increased to $1,976,130,000 as of September 27, 2025, from $1,886,806,000 as of September 28, 2024, reflecting a growth of about 4.75%[31] - The company’s total equity increased to $1,584,933,000 as of September 27, 2025, from $1,557,545,000 as of September 28, 2024, indicating a growth of approximately 1.76%[31] - Depreciation & amortization for the three months ended September 27, 2025, totaled $20,831,000, compared to $22,738,000 in the same period in 2024[53] - Interest expense, net for the three months ended September 27, 2025, was $6,881,000, compared to $6,476,000 in the same period in 2024[53] - Other expense for the three months ended September 27, 2025, was $576,000, a decrease from $6,137,000 in the same period in 2024[53] - Income tax benefit for the three months ended September 27, 2025, was $(3,421,000), compared to $(10,621,000) in the same period in 2024[53] - Noncash stock-based compensation for the three months ended September 27, 2025, was $5,488,000, slightly higher than $5,445,000 in the same period in 2024[53] - Net loss attributable to noncontrolling interest for the three months ended September 27, 2025, was $(630,000), compared to $(242,000) in the same period in 2024[53]

Core Insights - Central Garden & Pet Company, a prominent player in the pet and garden sectors, is set to participate in investor conferences on December 2, 2025 [1] Company Participation - The company will attend the 2025 Morgan Stanley Global Consumer & Retail Conference [1] - The event will take place at the InterContinental New York Barclay Hotel, New York, NY [1] - Brad Smith, the Chief Financial Officer, will represent the company in a fireside chat session [1]