WALNUT CREEK, Calif.--(BUSINESS WIRE)--Central Garden & Pet (NASDAQ: CENT) (NASDAQ: CENTA) ("Central†), a market leader in the pet and garden industries, today announced that it has acquired the U.S. assets of Champion USA, a well-established cattle fly-control company known for its proprietary JustiFLY® line of products. Acquiring the U.S. assets of Champion USA expands Central Garden & Pet's footprint in the attractive growth category of sustainable livestock fly control. Share Champion USA has served t ...

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Core Insights - Central Garden & Pet Company will participate in the 2025 KeyBanc Capital Markets Consumer conferences on December 12, 2025 [1] - CFO Brad Smith will host a fireside chat at 12:55 p.m. Eastern Time during the conference [1] - Senior management will be available for one-on-one meetings with investors [1]

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 for fiscal 2024, representing a 50.6% increase in net income[248]. - 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, reflecting a 22.3% increase in non-GAAP net income[259]. - Total net sales for fiscal 2025 were $3,129.1 million, compared to $3,200.5 million for fiscal 2024, indicating a slight decrease of 2.2%[260]. 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, marking 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 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 wind-down of U.K. operations[247]. - The company incurred approximately $10.0 million in one-time closure costs related to the wind-down of U.K. operations[222]. - Net interest expense decreased by $5.1 million, or 13.4%, to $32.8 million, due to increased interest income from higher cash balances[245]. 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]. Share Repurchase and Debt - During fiscal 2025, the company repurchased 3.2 million shares of non-voting common stock and 1.4 million shares of voting common stock at a total cost of $148.4 million[224]. - 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 a $600 million asset-backed loan facility, which is expected to be adequate for working capital and capital spending needs for at least the next 12 months[275]. - The company incurred approximately $6 million of debt issuance costs related to the issuance of $400 million 4.125% senior notes due 2031[285]. Assets and Liabilities - Total assets for the Parent/Issuer were $5.20 billion, while Guarantors had total assets of $4.46 billion as of September 27, 2025, compared to $4.81 billion and $4.23 billion respectively in the prior year[312]. - 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]. - The company has significant contractual cash obligations totaling $1.83 billion, with $204.8 million due in fiscal 2026[313]. 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]. - Interest expense could increase or decrease by approximately $1.9 million if interest rates changed by 25 basis points on the company's Amended Credit Facility[331]. Market and Operational Insights - Approximately 64% of the Garden segment's net sales occurred during the second and third fiscal quarters, highlighting the seasonality of the business[268]. - Inflation moderated in fiscal 2024 but increased in the second half of fiscal 2025, primarily due to tariffs, impacting margins and input costs[266]. - The company has minimal sales outside of the United States, indicating a strong domestic focus[333]. - Purchases by U.S. subsidiaries from foreign vendors are primarily made in U.S. dollars, reducing foreign currency risk exposure[333]. - The international subsidiary primarily transacts in British pounds and Canadian dollars, but overall foreign currency exchange risk is considered immaterial[333]. - The company does not hedge against foreign currency risks, reflecting confidence in current operations[333]. Growth Strategy - The company anticipates capital expenditures of approximately $50 to $60 million over the next 12 months for plant and equipment upgrades and IT platform implementation[276]. - The company is evaluating potential acquisition candidates as part of its growth strategy, which may require additional external capital[277].

Core Insights - Central Garden (CENTA) reported a quarterly loss of $0.09 per share, better than the Zacks Consensus Estimate of a loss of $0.20, and improved from a loss of $0.18 per share a year ago, resulting in an earnings surprise of +55.00% [1] - The company achieved revenues of $678.18 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.82% and showing an increase from $669.49 million year-over-year [2] - Central Garden shares have declined approximately 11.5% year-to-date, contrasting with the S&P 500's gain of 12.3% [3] Financial Performance - Over the last four quarters, Central Garden has exceeded consensus EPS estimates four times and topped consensus revenue estimates twice [2] - The current consensus EPS estimate for the upcoming quarter is $0.22 on revenues of $661.29 million, while for the current fiscal year, it is $2.73 on revenues of $3.16 billion [7] Market Outlook - The company's stock performance in the near term will largely depend on management's commentary during the earnings call and the sustainability of the stock's price movement based on recent earnings and future expectations [3][4] - The Zacks Rank for Central Garden is currently 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Industry Context - The Consumer Products - Discretionary industry, to which Central Garden belongs, is currently ranked in the bottom 27% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Central Garden's stock performance [5]

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% in fiscal 2024, driven by productivity initiatives[5][8] - The company achieved a gross margin of 31.9% for fiscal year 2025, compared to 30.0% for fiscal year 2024[49] - Adjusted EBITDA for fiscal year 2025 was $371.0 million, compared to $334.2 million for fiscal year 2024, indicating growth[52] - Adjusted EBITDA for the three months ended September 27, 2025, was $25,670,000, a decrease from $16,822,000 in the same period in 2024[53] 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 and retail execution[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 reported a GAAP operating loss of $1.7 million for the three months ended September 27, 2025, improving from a loss of $28.8 million in the same period of 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 long-term debt remained stable at $1,191,641,000 as of September 27, 2025, compared to $1,189,809,000 in 2024[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 - Selling, general and administrative expenses for the fiscal year ended September 27, 2025, were $747,294,000, a decrease from $758,348,000 in 2024, representing a reduction of about 1.46%[33] - The company reported adjusted EBITDA for the fiscal year ended September 27, 2025, which is a key non-GAAP measure, reflecting improved operational performance[38] 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 total equity of Central Garden & Pet Company increased to $1,584,933,000 as of September 27, 2025, from $1,557,545,000 in 2024, indicating a growth of approximately 1.76%[31] - The company incurred a $12.8 million non-cash impairment charge in the Pet segment during fiscal 2024 due to changing market conditions[44] - In fiscal 2025, the company recognized a $5.0 million incremental expense in the Garden segment due to the closure of a distribution facility in Ontario, California[41]

Core Insights - Central Garden & Pet Company is scheduled to release its fourth quarter and fiscal year 2025 financial results on November 24, 2025, providing insights into its performance for the period ending September 27, 2025 [1] Financial Performance Expectations - Wall Street estimates an earnings per share (EPS) of -$0.20 for NASDAQ:CENTA, with optimism that the company might exceed these expectations; the Zacks Consensus Estimate also forecasts a quarterly loss of $0.20 per share [2][6] - Projected revenue for this period is approximately $657.86 million [2] Valuation Metrics - The company's price-to-earnings (P/E) ratio is approximately 12.32, indicating how the market values its earnings [3][6] - The price-to-sales ratio is about 0.57, suggesting a relatively low market valuation compared to its sales [3][6] - The enterprise value to sales ratio is 0.80, indicating that the enterprise value is slightly higher than its sales [3] Liquidity and Debt Levels - The current ratio of 3.56 demonstrates strong liquidity, indicating the company's ability to cover short-term liabilities [4][6] - A debt-to-equity ratio of 0.90 reflects a moderate level of debt compared to equity, suggesting a stable financial position [4][6] Management Insights - The upcoming earnings call, led by CEO Niko Lahanas and CFO Brad Smith, will be crucial for determining the sustainability of immediate price changes and future earnings expectations; management's discussion on business conditions will provide valuable insights into the company's strategy and outlook [5]

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 Insights - Nylabone, a brand under Central Garden & Pet Company, has launched a new collection of chew toys made with real meats, including chicken, bison, venison, bacon, and beef, celebrating its 70th anniversary [1] Product Launch - The new chew toys are designed to cater to dogs' natural instincts by providing real tastes that enhance their everyday experience [1] - The product line features Nylabone's best-selling shape, the Original Bone, infused with irresistible flavors [1]

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for Central Garden (CENTA) due to lower revenues, with a focus on how actual results compare to estimates impacting stock price [1][2] Earnings Expectations - Central Garden is expected to report a quarterly loss of $0.20 per share, reflecting an 11.1% decrease year-over-year [3] - Revenue projections stand at $666.08 million, indicating a 0.5% decline from the previous year [3] Estimate Revisions - The consensus EPS estimate has been revised down by 8.33% over the last 30 days, indicating a reassessment by analysts [4] - The Most Accurate Estimate for Central Garden is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +6.56% [12] Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [10] - Central Garden currently holds a Zacks Rank of 3, indicating a likelihood of beating the consensus EPS estimate [12] Historical Performance - In the last reported quarter, Central Garden exceeded expectations by delivering earnings of $1.56 per share against an expected $1.34, resulting in a surprise of +16.42% [13] - The company has beaten consensus EPS estimates in all of the last four quarters [14] Conclusion - While Central Garden is positioned as a compelling earnings-beat candidate, other factors may influence stock movement beyond just earnings results [15][17]