Financial Performance - Fiscal 2026 Q1 net sales were $617 million, down from $656 million in Q1 FY 2025, reflecting a decrease of approximately 6%[3] - Operating income decreased to $17 million from $28 million, resulting in an operating margin decline to 2.7% from 4.3%[3] - Net sales for the three months ended December 27, 2025, were $617.4 million, a decrease of 5.9% compared to $656.4 million for the same period in 2024[26] - Gross profit for the same period was $190.6 million, down from $195.7 million, resulting in a gross margin of 30.9%[26] - Operating income decreased significantly to $16.5 million from $28.0 million, reflecting a decline in operating margin from 4.3% to 2.7%[26] - Net income attributable to Central Garden & Pet Company was $6.8 million, a 51.1% decrease from $14.0 million in the prior year[26] - Adjusted EBITDA for the three months ended December 27, 2025, was $49.8 million, down from $55.4 million in the prior year[39] Segment Performance - Pet segment net sales were $416 million, down from $427 million, primarily due to portfolio optimization and shipment timing[5] - Garden segment net sales were $202 million, down from $229 million, also reflecting shipment timing and portfolio optimization efforts[7] Cash and Debt Management - Cash and cash equivalents increased to $721 million from $618 million year-over-year[9] - Total debt remained stable at $1.2 billion, with a gross leverage ratio of 2.9x, below the target range of 3.0 to 3.5x[10] - Cash flows from operating activities resulted in a net cash used of $70.2 million, compared to $68.8 million in the prior year[28] - Cash, cash equivalents, and restricted cash at the end of the period totaled $737.2 million, down from $632.7 million a year earlier[28] Future Outlook - Central expects fiscal 2026 non-GAAP diluted EPS of $2.70 or better, supported by margin discipline and cost efficiency initiatives[14] - Capital expenditures are projected to be approximately $50 million to $60 million, focusing on maintenance and targeted growth investments[15] Share Repurchase - Central repurchased 660,000 shares for $18.5 million during the quarter, with $28 million remaining for future repurchases[11] Acquisitions and Expenses - The company invested $57.0 million in acquiring companies during the quarter, significantly higher than $3.3 million in the same period last year[28] - The company recognized an incremental expense of $7.7 million related to facility closures during the quarter[32] Gross Margin Improvement - Gross margin improved by 110 basis points to 30.9% compared to 29.8% in the prior year, driven by enhanced productivity[3]

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true v ...

Core Insights - Central Garden & Pet Company (CENT) is trading at a forward 12-month price-to-earnings (P/E) multiple of 11.85X, which is below the industry average of 16.71X, raising questions about whether this discount reflects challenges or presents a buying opportunity [1][8] Financial Performance - CENT shares have increased by 10.8% over the past three months, slightly underperforming the industry's rise of 11.3% but outperforming the sector's decline of 2.5% and the S&P 500 Index's gain of 6.4% during the same period [2] - The Zacks Consensus Estimate indicates year-over-year sales growth of 0.8% for the current year and 1.2% for the next year, while earnings are expected to grow by 1.1% and 4.7% respectively [12][13] Strategic Initiatives - The company is refining its portfolio to focus on high-growth, high-margin categories while exiting underperforming segments, including the sale of its garden distribution business and a strategic exit from the pottery business [3] - Management is intentionally exiting lower-margin, more volatile businesses, which is expected to lead to a sales decline in fiscal 2025 due to reduced exposure to lower-margin products and the transition of certain product lines to a direct-to-retail model [4] Operational Efficiency - A key component of CENT's strategy is the "Cost and Simplicity" program, which has improved the company's margin profile, resulting in an adjusted gross margin expansion of 210 basis points to 32.1% in fiscal 2025 [5][8] - The company is accelerating its shift towards e-commerce, with e-commerce now accounting for 27% of Pet segment sales and over 10% of Garden segment sales, indicating a strong adaptation to changing consumer behaviors [9] Market Resilience - Despite market volatility and weather fluctuations, CENT's core segments have shown resilience, with the Garden segment achieving its largest point-of-sale year on record and the Pet segment maintaining overall market share [10]

Group 1: Company Overview - Boyd Gaming (BYD) is part of the Consumer Discretionary group, which includes 261 companies and ranks 11 in the Zacks Sector Rank [2] - Boyd Gaming currently holds a Zacks Rank of 2 (Buy), indicating a favorable outlook based on earnings estimates and revisions [3] Group 2: Performance Analysis - Year-to-date, Boyd Gaming has returned approximately 2.6%, outperforming the Consumer Discretionary sector's average return of 1.3% [4] - In comparison to its industry, Boyd Gaming is slightly underperforming, as the Gaming industry has gained an average of 5.1% year-to-date [5] Group 3: Comparative Analysis - Another stock in the Consumer Discretionary sector, Central Garden (CENT), has a year-to-date return of 2.9% and also holds a Zacks Rank of 2 (Buy) [4][5] - Central Garden belongs to the Consumer Products - Discretionary industry, which has moved -2.1% year-to-date, indicating a contrasting performance compared to Boyd Gaming's sector [6]

Core Viewpoint - Central Garden (CENT) has received a Zacks Rank 2 (Buy) upgrade, indicating a positive outlook for the company's earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling activity that affects stock prices [4]. Central Garden's Earnings Outlook - Central Garden's rising earnings estimates and the Zacks Rank upgrade suggest an improvement in the company's underlying business, likely leading to increased stock prices [5][10]. - The Zacks Consensus Estimate for Central Garden indicates expected earnings of $2.76 per share for the fiscal year ending September 2026, with a 2% increase in estimates over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with only the top 20% of stocks receiving a "Strong Buy" or "Buy" rating, indicating superior earnings estimate revisions [9][10]. - Stocks rated Zacks Rank 1 have historically generated an average annual return of +25% since 1988, showcasing the effectiveness of the system [7].

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].

Core Insights - Central Garden & Pet (CENT) has expanded its animal health platform by acquiring the U.S. assets of Champion USA, enhancing its presence in the livestock segment and adding the JustiFLY product line to its Professional business unit [1][8] Company Overview - Champion USA has over 15 years of experience in providing EPA-approved, residue-free fly-control solutions, having served over 300,000 producers and treated more than 50 million head of cattle globally, indicating a strong market presence [2] - The acquisition is expected to enhance CENT's growth profile by leveraging Champion's established relationships and brand equity alongside CENT's distribution network and innovation capabilities [3][6] Market Dynamics - Livestock fly control is identified as one of the fastest-growing areas within animal health, driven by increasing demand for sustainable and cost-effective herd management solutions [3] - CENT's animal health business was already showing strong momentum in Q4 of fiscal 2025, with solid growth across its Professional portfolio and equine categories, providing a favorable backdrop for the integration of Champion USA [4] Operational Strategy - Operational continuity is prioritized, with Champion USA's employees transitioning into CENT's Professional segment to ensure consistent product quality and customer service [5] - The acquisition aligns with CENT's long-term strategy of expanding differentiated, high-quality animal health offerings, positioning the company for steady, profitable growth [6] Financial Performance - CENT shares have declined 6.3% over the past three months, while the industry has seen a minor decline of 0.3% [7] - CENT trades at a forward price-to-earnings ratio of 12.08X, which is lower than the industry's average of 15.94X, indicating a potentially attractive valuation [7]

Core Viewpoint - Central Garden & Pet Co. (NASDAQ:CENT) is recognized as one of the best small-cap value stocks to buy, showing an increase of over 8% since its fiscal Q4 2025 earnings release on November 24 [1]. Financial Performance - The company reported a quarterly revenue growth of 1.30% year-over-year, reaching $678.18 million, which exceeded estimates by $20.32 million [3]. - The earnings per share (EPS) was negative $0.09, surpassing consensus estimates by $0.11 [3]. - The strong performance in the Garden segment was a key driver, exceeding estimates by approximately 11%, while the Pet segment met general consensus expectations [3]. Analyst Ratings - Bill Chappell from Truist Financial maintained a Hold rating on the stock without providing a price target [1]. - Bradley Thomas from KeyBanc reiterated a Buy rating with a price target of $50, citing the company's Q4 earnings as a significant factor for his positive outlook [1][2]. Company Overview - Central Garden & Pet Company produces and distributes branded and private label products for the garden, lawn, and pet supplies markets, with operations divided into Pet and Garden segments [4].

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].