Central Garden & Pet Announces Q3 Fiscal 2025 Financial Results

Delivers fiscal 2025 Q3 GAAP EPS of $1.52 vs. $1.19 and non-GAAP EPS of $1.56 vs. $1.32 a year ago

Reaffirms outlook for fiscal 2025 non-GAAP EPS of approximately $2.60

Central Garden & Pet Company (“Central”), a leading company in the pet and garden industries, announced financial results for its fiscal 2025 third quarter ended June 28, 2025.

“We’re proud of our solid third-quarter performance, which reflects the strength of our strategic priorities in action,” said Niko Lahanas, CEO of Central Garden & Pet. “Our team’s dedication, collaboration across business units and strong execution—especially through our Cost and Simplicity program—drove meaningful margin expansion and year-over-year GAAP and non-GAAP earnings growth despite expected softer sales. Even in the face of broader macroeconomic and geopolitical uncertainty, we continue to deliver on our Central to Home strategy with excellence and consistency.”

All comparisons are against the third quarter of fiscal 2024.

Fiscal 2025 Third Quarter Financial Results

Net sales were $961 million, a decrease of 4%.

Gross profit was $332 million, an increase of 5%. Gross margin expanded by 280 basis points to 34.6%, driven by productivity efforts from Central’s Cost and Simplicity program.

SG&A expense was $197 million, a decrease of 2% reflecting cost discipline across the organization. Due to lower net sales, SG&A as a percentage of net sales increased by 30 basis points to 20.5%.

Operating income was $135 million, an increase of 17%. Operating margin expanded by 250 basis points to 14.1%. Non-GAAP operating income was $139 million, an increase of 9%. On a non-GAAP basis, operating margin expanded by 170 basis points to 14.5%.

Net interest expense was $9 million compared to $10 million.

Net income was $95 million, an increase of 19%. Non-GAAP net income was $98 million, an increase of 11%.

Earnings per share were $1.52, an increase of 28%. Non-GAAP earnings per share were $1.56, an increase of 18%.

Adjusted EBITDA was $167 million, an increase of $11 million.

The effective tax rate was 25.1% compared to 24.0% in the prior year.

Pet Segment

Net sales for the Pet segment were $493 million, a decrease of 3%, driven primarily by assortment rationalization and softer demand in durable pet products in the third quarter.

Pet segment operating income was $76 million, a decrease of 8%. Operating margin contracted by 90 basis points to 15.5%. Non-GAAP operating income was $78 million, a decrease of 6%. On a non-GAAP basis, operating margin contracted by 60 basis points to 15.8%.

Pet segment adjusted EBITDA of $88 million was $6 million below the prior-year quarter.

Garden Segment

Net sales for the Garden segment were $468 million, a decrease of 4%, primarily due to the loss of two product lines in Central’s third-party distribution business and a late spring negatively impacting some of the garden businesses.

Garden segment operating income was $83 million, an increase of 33%. Non-GAAP operating income was $85 million, an improvement of 16%. Operating margin expanded by 490 basis points to 17.7% driven by productivity efforts. On a non-GAAP basis, operating margin expanded by 310 basis points to 18.2%, driven by productivity efforts.

Garden segment adjusted EBITDA was $96 million, an increase of $11 million.

Liquidity and Debt

The cash and cash equivalents balance at the end of the quarter was $713 million, an improvement of $143 million driven by earnings and ongoing inventory reduction efforts over the last 12 months.

Cash provided by operations during the quarter was $265 million compared to $286 million a year ago.

Total debt as of June 28, 2025, and June 29, 2024, was $1.2 billion. The gross leverage ratio, as defined in Central’s credit agreement, at the end of the third quarter, was 2.9x, compared to 3.0x in the prior-year quarter.

Central repurchased 1.7 million shares or $55 million of its stock during the quarter. As of the quarter-end, $46 million remained authorized for future stock repurchases.

Cost and Simplicity Program

Central continues to make solid progress on its multi-year Cost and Simplicity program—a broad set of initiatives across procurement, manufacturing, logistics, portfolio management, and administrative spending—focused on streamlining operations, boosting efficiency, and simplifying the organization at every level.

In the second quarter, Central began the wind-down of its U.K. operations moving to a direct export-only model. As a result, in the third quarter, the Pet segment incurred an incremental charge of $1.7 million.

Also in the second quarter of fiscal 2025, Central began to consolidate two outdated garden distribution facilities in Ontario, California and Salt Lake City, Utah, into a larger, modern facility in Salt Lake City. As a result, in the third quarter the Garden segment incurred a charge of $2.2 million.

Fiscal 2025 Guidance

Central continues to expect fiscal 2025 non-GAAP EPS to be approximately $2.60. This outlook reflects an expected shift in consumer behavior amid macroeconomic and geopolitical uncertainty, challenges within the brick-and-mortar retail landscape, and uncertainty about the duration of the garden selling season 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 $50 to $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