Central Garden & Pet Announces Q2 Fiscal 2025 Financial Results

Delivers fiscal 2025 Q2 GAAP EPS of $0.98 vs. $0.93 and non-GAAP EPS of $1.04 vs. $0.99 a year ago amid softer sales in the quarter

Reaffirms outlook for fiscal 2025 non-GAAP EPS of $2.20 or better

Central Garden & Pet Company (“Central”), a market leader in the pet and garden industries, announced financial results for its fiscal 2025 second quarter ended March 29, 2025.

“We are pleased with our solid second-quarter results. Despite expected softer sales, our continued focus on improving productivity and execution of our Cost and Simplicity program drove margin and earnings per share growth above last year’s performance,” said Niko Lahanas, CEO of Central Garden & Pet. “Although a significant portion of the garden season is still ahead, and notwithstanding the uncertain macroeconomic and geopolitical environment, we are reaffirming our fiscal year outlook and remain committed to delivering on our Central to Home strategy with excellence.”

All comparisons are against the second quarter of fiscal 2024.

Fiscal 2025 Second Quarter Financial Results

Net sales were $834 million, a decrease of 7%.

Gross profit was $273 million, a decrease of 2%. Gross margin expanded by 180 basis points to 32.8%, driven by productivity efforts from Central’s Cost and Simplicity program.

SG&A expense was $180 million, a decrease of 3% reflecting cost discipline across the organization. Due to lower net sales, SG&A as a percentage of net sales increased by 100 basis points to 21.6%.

Operating income was $93 million, in line with the prior year. Operating margin expanded by 80 basis points to 11.2%. Non-GAAP operating income was $99 million, also in line with the prior year. On a non-GAAP basis, operating margin expanded by 80 basis points to 11.8%.

Net interest expense was $9 million compared to $11 million.

Net income was $64 million, an increase of 3%. Non-GAAP net income was $68 million, also an increase of 3%.

Earnings per share were $0.98, an increase of $0.05. Non-GAAP Earnings per share were $1.04, also an increase of $0.05.

Adjusted EBITDA of $123 million was $1 million below the prior-year quarter.

The effective tax rate was 23.5% compared to 23.4% in the prior year.

Pet Segment

Net sales for the Pet segment were $454 million, a decrease of 6%, driven primarily by the timing of customer orders and promotional events that shifted sales into the first quarter and assortment rationalization and softer demand in durable pet products in the second quarter.

Pet segment operating income was $61 million, a decrease of 3%. Operating margin expanded by 40 basis points to 13.4%. Non-GAAP operating income was $66 million, an improvement of 5%. On a non-GAAP basis, the operating margin expanded by 150 basis points to 14.5%, driven by productivity improvements.

Pet segment adjusted EBITDA of $75 million was $2 million above the prior-year quarter.

Garden Segment

Net sales for the Garden segment were $380 million, a decrease of 10%, primarily due to customers shifting pre-season orders into the first quarter, unfavorable weather resulting in a late-breaking spring selling season and the loss of two product lines in Central’s third-party distribution business.

Garden segment operating income was $59 million, an increase of 3%. Operating margin expanded by 190 basis points to 15.5% driven by productivity efforts.

Garden segment adjusted EBITDA of $69 million was $4 million below the prior-year quarter.

Liquidity and Debt

The cash and cash equivalents balance at the end of the quarter was $517 million, an improvement of $215 million driven by earnings and ongoing inventory reduction efforts over the last 12 months.

Cash used by operations during the quarter was $47 million compared to $25 million a year ago.

Total debt as of March 29, 2025, and March 30, 2024, was $1.2 billion. The gross leverage ratio, as defined in Central’s credit agreement, at the end of the second quarter, was 2.9x, in line with the prior-year quarter.

Central repurchased 1.2 million shares or $41 million of its stock during the quarter. After the second quarter end, Central repurchased an additional 1.2 million shares or $39 million of its stock through April 30, 2025. As of April 30, 2025, $63 million remained available for future stock repurchases.

Cost and Simplicity Program

Central continues to achieve meaningful progress in its multi-year Cost and Simplicity program, which comprises a comprehensive suite of initiatives across procurement, manufacturing, logistics, portfolio management, and administrative expenditures. These initiatives are intended to streamline operations, enhance organizational efficiency, and drive simplification across the enterprise.

In the second quarter of fiscal 2025, Central began winding down its operations in the United Kingdom and is moving to a direct-export model to service customers in the U.K. and certain European markets. As a result, Central’s Pet segment incurred $5.3 million in initial costs, including $4.4 million in cost of goods sold and $0.9 million in selling, general and administrative costs, all of which was non-cash.

Fiscal 2025 Guidance

Central continues to expect fiscal 2025 non-GAAP EPS to be $2.20 or better. This outlook reflects an expected shift in consumer behavior amid macroeconomic and geopolitical uncertainty, challenges within the brick-and-mortar retail landscape, and the weather variability anticipated for the remainder of the fiscal year. This outlook excludes the potential impact from further changes in tariff rates, or from acquisitions, divestitures, or restructuring activities that may occur during fiscal 2025, including initiatives associated with the Cost and Simplicity program.

Central anticipates fiscal 2025 capital expenditures of approximately $60 million.

For full results click here.

About Central Garden & Pet

Central Garden & Pet Company (NASDAQ: CENT) (NASDAQ: CENTA) understands home is central to life and has proudly nurtured happy and healthy homes for over 40 years. With fiscal 2023 net sales of $3.3 billion, Central is on a mission to lead the future of the Pet and Garden industries. The Company’s innovative and trusted products are dedicated to helping lawns grow greener, gardens bloom bigger, pets live healthier, and communities grow stronger. Central is home to a leading portfolio of more than 65 high-quality brands including Amdro^®, Aqueon^®, Cadet^®, Farnam^®, Ferry-Morse^®, Four Paws^®, Kaytee^®, K&H^®, Nylabone^® and Pennington^®, strong manufacturing and distribution capabilities, and a passionate, entrepreneurial growth culture. Central is based in Walnut Creek, California, with 6,700 employees primarily across North America. Visit www.central.com to learn more.

Contact:

Friederike Edelmann – VP, Investor Relations & Corporate Sustainability – fedelmann@central.com – (925) 412-6726

Source: Central Garden & Pet Company