Central Garden & Pet(US:CENT)2025-08-07 18:16Financial Performance - Consolidated net sales for fiscal 2024 were $3.2 billion, with the Pet segment contributing approximately $1.8 billion and the Garden segment approximately $1.4 billion[108]. - In the third quarter of fiscal 2025, net sales decreased by $35.4 million, or 3.6%, to $961 million, with Pet net sales down 3.1% and Garden net sales down 4.1%[113]. - For the nine months ended June 28, 2025, net sales decreased by $80 million, or 3.2%, to $2.451 billion, with Pet net sales down 1.7% and Garden net sales down 5.0%[137]. - Net sales for the three months ended June 29, 2024, were $996.3 million, with a gross profit of $317.1 million, resulting in a gross margin of 31.8%[162]. - Net sales for the nine months ended June 28, 2025, were $596,750,000, a decrease from $694,083,000 for the same period in the previous fiscal year, representing a decline of approximately 14.0%[204]. Profitability - Gross profit for the third quarter of fiscal 2025 increased by $15 million, or 4.7%, to $332 million, with gross margin improving by 280 basis points to 34.6%[120]. - Gross profit for the nine months ended June 28, 2025, increased by $26 million, or 3.4%, to $800.8 million, with gross margin improving by 210 basis points to 32.7%[141]. - Non-GAAP gross profit for the nine months ended June 28, 2025 increased by $19.6 million, or 2.5%, to $805.5 million from $785.9 million for the same period in 2024[143]. - Non-GAAP gross margin improved by 180 basis points to 32.9% for the nine months ended June 28, 2025, compared to 31.1% for the same period in 2024[143]. - Operating income for the third quarter of fiscal 2025 rose by $19.2 million, or 16.6%, to $135.1 million, with operating margin increasing from 11.6% to 14.1%[128]. - Operating income increased by $38.6 million, or 17.7%, to $256.4 million for the nine months ended June 28, 2025, with an operating margin of 10.5%[147]. - Net income for the third quarter of fiscal 2025 was $95 million, or $1.52 per diluted share, compared to $79.7 million, or $1.19 per diluted share, in the prior year[135]. - Net income for the nine months ended June 28, 2025 was $172.6 million, or $2.69 per diluted share, compared to $142.1 million, or $2.13 per diluted share, for the same period in 2024[154]. Segment Performance - Pet segment operating income decreased by $6.9 million, or 8.3%, to $76.2 million due to a decline in net sales and increased expenses[129]. - Garden segment operating income increased by $20.5 million to $83 million, driven by improved gross margin and lower expenses[130]. - Pet operating income decreased by $1.0 million, or 0.5%, to $188.1 million for the nine months ended June 28, 2025, due to lower sales and higher expenses[148]. - Garden operating income increased by $33.4 million to $144.1 million for the nine months ended June 28, 2025, driven by increased gross profit and lower expenses[149]. - Non-GAAP operating income for the Pet segment was $195.1 million for the nine months ended June 28, 2025, reflecting strong performance in this category[163]. Expenses and Costs - Selling, general and administrative expenses decreased by $12.6 million, or 2.3%, to $544.4 million for the nine months ended June 28, 2025[144]. - The company incurred approximately $5.3 million in one-time costs related to the wind-down of U.K. operations, with additional costs expected in the following quarters[111]. - Net interest expense decreased by $5.5 million, or 17.4%, to $25.9 million for the nine months ended June 28, 2025, due to increased interest income[151]. - The effective income tax rate increased to 24.4% for the nine months ended June 28, 2025, compared to 23.3% for the same period in 2024[153]. Cash Flow and Liquidity - Net cash provided by operating activities decreased by $42.0 million, from $191.8 million for the nine months ended June 29, 2024, to $149.8 million for the nine months ended June 28, 2025, primarily due to changes in working capital[171]. - Net cash used in investing activities decreased by $60.5 million, from $94.6 million for the nine months ended June 29, 2024, to $34.0 million for the nine months ended June 28, 2025, due to less acquisition activity[172]. - Net cash used in financing activities increased by $140.3 million, from $16.0 million for the nine months ended June 29, 2024, to $156.3 million for the nine months ended June 28, 2025[173]. - The company’s liquidity is supported by cash generated from operations, bank borrowings, and sales of equity and debt securities, ensuring adequate capital resources for growth[167]. Debt and Capital Expenditures - Total debt outstanding was $1,191.3 million as of June 28, 2025, compared to $1,189.7 million at June 29, 2024[177]. - Anticipated capital expenditures for fiscal 2025 are approximately $50 to $60 million, with $31 million already invested through June 28, 2025[175]. - Net availability under the $750 million Credit Facility was approximately $565 million as of June 28, 2025[194]. - Interest rate applicable to Base Rate borrowings was 7.5%, and for one-month SOFR-based borrowings was 5.3% as of June 28, 2025[195]. - The Credit Facility matures on December 16, 2026, and allows for borrowing, repayment, and reborrowing until maturity[193]. Assets and Liabilities - Total assets as of June 28, 2025, were $5,046,632,000, an increase from $4,812,102,000 as of September 28, 2024, showing a growth of approximately 4.9%[204]. - Current liabilities increased to $169,535,000 as of June 28, 2025, compared to $164,607,000 as of September 28, 2024, marking an increase of about 2.8%[204]. - Long-term debt stood at $1,191,070,000 as of June 28, 2025, slightly up from $1,189,655,000, indicating a marginal increase[204]. - Other assets increased to $4,035,980,000 as of June 28, 2025, from $3,799,521,000, representing a growth of about 6.2%[204]. Accounting and Reporting - The company has not reported any material changes in critical accounting policies or market risk exposure since the last annual report[205][207]. - The company has not disclosed any new accounting pronouncements that would materially affect its financial statements[206].