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]

Core Viewpoint - Central Garden & Pet Company is set to release its quarterly earnings on November 24, 2025, with analysts predicting an EPS of -$0.20 and revenue of approximately $657.86 million for the quarter [1][6]. Financial Projections - Analysts anticipate a year-over-year decline in earnings and lower revenues, but Zacks Investment Research suggests the company may exceed these estimates, which could positively affect the stock price [2]. - A miss on earnings expectations could lead to a decrease in stock value, making the management's discussion during the earnings call critical for assessing immediate price changes [2]. Financial Metrics - The company has a price-to-earnings (P/E) ratio of 13.98, indicating the amount investors are willing to pay per dollar of earnings [3][6]. - The price-to-sales ratio is 0.61, reflecting the market's valuation of its sales [3][6]. - The enterprise value to sales ratio stands at 0.85, showing the company's total valuation relative to its sales [3]. - The enterprise value to operating cash flow ratio is 7.48, suggesting how the company's cash flow is valued in relation to its enterprise value [4]. - Central Garden has an earnings yield of 7.15%, indicating a return on investment relative to its share price [4]. - The debt-to-equity ratio is 0.90, showing the proportion of debt used to finance the company's assets relative to shareholders' equity [4]. - The current ratio is 3.56, indicating a strong ability to cover short-term liabilities with short-term assets, which is crucial given the challenges of declining earnings and revenue projections [5].

Core Viewpoint - Central Garden (CENT) is expected to report a year-over-year decline in earnings due to lower revenues, with a consensus outlook indicating a quarterly loss of $0.20 per share and revenues of $666.08 million, down 0.5% from the previous year [1][3]. Earnings Expectations - The consensus EPS estimate has been revised 8.33% lower in the last 30 days, reflecting a reassessment by analysts [4]. - A positive Earnings ESP of +6.56% suggests analysts have recently become more optimistic about Central Garden's earnings prospects, despite the stock holding a Zacks Rank of 3 [12]. Earnings Surprise History - Central Garden has a history of beating consensus EPS estimates, having done so in the last four quarters, including a +16.42% surprise in the most recent quarter [13][14]. Market Reaction - The stock price may increase if the actual earnings exceed expectations, while a miss could lead to a decline [2]. - Management's discussion during the earnings call will significantly influence the sustainability of any immediate price changes and future earnings expectations [2].

Core Insights - Central Garden & Pet Company has opened a new state-of-the-art fulfillment center in Salt Lake City, Utah, enhancing its logistics network and supporting long-term growth [2][3] - The new facility consolidates two legacy sites, improving efficiency and reducing complexity in serving customers nationwide [3][4] - This initiative is part of a broader strategy to make the company leaner and more agile while pursuing organic growth and strategic M&A opportunities [3][5] Company Strategy - The Salt Lake City facility is designed to be a modern, direct-to-consumer (DTC)-enabled hub, which will enhance the company's ability to manage its DTC business and improve drop shipment execution for retail partners [5] - The facility features advanced safety systems, optimized workflows, and expanded capacity, contributing to logistics savings and increased throughput [5] - Central Garden & Pet aims to build a more efficient and resilient network that seamlessly connects retail, eCommerce, and wholesale demand [5] Financial Overview - Central Garden & Pet reported fiscal 2024 net sales of $3.2 billion, indicating a strong market position in the pet and garden industries [6]

Core Insights - Kaytee is launching "The Birder Hub," a digital platform aimed at making birding accessible and enjoyable for all, reflecting a growing cultural interest in the hobby [2][3][4] Company Overview - Kaytee is a leading brand in backyard birding and pet care, with over 150 years of experience in nurturing healthy pets [7] - The company is part of Central Garden & Pet, which reported fiscal 2024 net sales of $3.2 billion and focuses on innovative products for pets and gardens [8] Industry Trends - Birding is gaining popularity, especially among younger demographics, driven by social media and a desire for outdoor activities [3][4] - The Birder Hub aims to cater to both beginners and seasoned birders, promoting mental health benefits and mindfulness through nature observation [5] Partnerships - Kaytee has partnered with Jane Lynch and Christian Cooper to promote The Birder Hub, leveraging their influence to highlight the fun and accessible nature of birding [4][5]

Core Viewpoint - Central Garden (CENT) is a strong candidate for investors looking for stocks that consistently beat earnings estimates, particularly in the consumer products - discretionary industry [1] Earnings Performance - Central Garden has a history of beating earnings estimates, with an average surprise of 13.53% over the last two quarters [2] - In the most recent quarter, the company reported earnings of $1.56 per share, exceeding the expected $1.34 per share, resulting in a surprise of 16.42% [3] - For the previous quarter, Central Garden's earnings were $1.04 per share against an estimate of $0.94 per share, leading to a surprise of 10.64% [3] Earnings Estimates and Predictions - Recent estimates for Central Garden have been increasing, with a positive Zacks Earnings ESP (Expected Surprise Prediction) indicating a strong likelihood of an earnings beat [6][9] - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [7] - Central Garden currently has an Earnings ESP of +6.56%, suggesting analysts are optimistic about the company's earnings prospects [9] Importance of Earnings ESP - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [8] - A positive Earnings ESP combined with a Zacks Rank of 3 indicates a potential earnings beat, while a negative Earnings ESP may reduce predictive power but does not necessarily indicate a miss [9][10]