CENTRAL GARDEN & PET CO
For the period ended Mar 29, 2025. Filed May 8, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 29, 2025 · Filed May 8, 2025
CENT$47.78-0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-12-28; filed 2025-02-06.
0000887733-25-000006
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-29; filed 2025-05-08.
0000887733-25-000015
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 290 previous paragraphs and 380 current paragraphs.
162 unchanged; 72 reworded; 142 added; 55 removed; 1 previous and 4 current paragraphs rearranged.
Tables are not compared: 4 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (142)
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Central has proudly nurtured happy and healthy homes by bringing innovative and trusted solutions to consumers and its customers. We
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Fiscal 2025 Second Quarter Financial Performance:
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•Net sales decreased$66.6 million, or 7.4%, from the prior year quarter to$834 million, with Pet net sales decreasing
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5.5% and Garden net sales decreasing 9.5%.
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•Gross profit decreased$5.8 million from the prior year quarter, while gross margin increased 180 basis points to 32.8%.
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•Selling, general and administrative expense decreased$5.7 million from the prior year quarter to$179.8 million and
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increased as a percentage of net sales 100 basis points to 21.6%.
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•Operating income was$93.3 million in the second quarter of fiscal 2025 and was relatively flat as compared to the
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second quarter of 2024. On a non-GAAP basis, operating income was$98.7 million in both periods.
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•Net Income in thesecond quarter of fiscal 2025 was$63.6 million, or$0.98 per diluted share, compared to$62.0 million,
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or$0.93 per diluted share, in thesecond quarter of fiscal 2024. On a non-GAAP basis, net income was$67.7 million, or
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$1.04 per diluted share, in the second quarter of fiscal 2025.
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Wind-down of U.K. Operations
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In March 2025, we decided to wind-down our operations in the United Kingdom, which also served certain European markets, as we
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move to a direct-export model. As a result, we incurred approximately$5.3 million of one-time costs, including$4.4 million in cost of goods
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sold and$0.9 million in selling, general and administrative costs, related to the liquidation of inventory and receivables. We expect to incur
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additional costs, including severance and facility closure costs, in the remaining two quarters of fiscal 2025.
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Stock Repurchases
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Since our quarter ended March 29, 2025, through April 30, 2025, we have repurchased 0.8 million shares of our non-voting common
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April 30, 2025, we had approximately $62.5 million remaining under our 2024 Repurchase Authorization.
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three months ended March 30, 2024. The decline in net sales was driven in part by the timing of customer orders that shifted sales into the
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first quarter. Our branded product sales decreased$44.2 million, and sales of other manufacturers’ products decreased$22.4 million.
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Pet net sales decreased$26.5 million, or 5.5%, to$453.7 million for the three months ended March 29, 2025, from$480.2 million for
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the three months ended March 30, 2024. The decline in net sales was driven primarily by the timing of customers orders and promotional
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events that shifted sales into the first quarter. Pet sales were also negatively impacted by the continued decline in demand for pet durable
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products, particularly our outdoor cushion and pet bed business and our aquatics business. Pet branded product sales decreased$28.9
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million, and sales of other manufacturers' products increased$2.4 million.
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Garden net sales decreased$40.1 million, or 9.5%, to$379.8 million for the three months ended March 29, 2025 from$419.9 million
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for the three months ended March 30, 2024. Garden net sales declined due primarily to customers shifting pre-season orders into the first
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quarter, unfavorable weather resulting in a delayed start to the garden season and decreased sales of third-party products which were
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negatively impacted by the loss of distribution of two product lines. These declines were partially offset by increased sales of our Wild Bird
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business due to the colder weather. Garden branded product sales decreased$15.3 million, and sales of other manufacturers' products
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decreased$24.8 million.
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Gross profit for the three months ended March 29, 2025 decreased$5.8 million, or 2.1%, to$273.1 million from$278.9 million for the
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three months ended March 30, 2024. The decrease in gross profit was due to lower net sales. Gross margin increased 180 basis points to
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32.8% for the three months ended March 29, 2025 from 31.0% for the three months ended March 30, 2024.
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On a non-GAAP basis, which excludes the impact of charges for facility closures in the second quarter of fiscal 2025 and fiscal 2024,
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non-GAAP gross margin increased 200 basis points to 33.3% for the three months ended March 29, 2025, from 31.3% for the three months
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ended March 30, 2024.
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Selling, general and administrative expenses decreased$5.7 million, or 3.1%, to$179.8 million for the three months ended March 29,
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Central has marketed innovative and trusted solutions helping lawns grow greener, gardens bloom bigger, pets live healthier, and
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Fiscal 2025 First Quarter Financial Performance:
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•Net sales increased$21.9 million, or 3.5%, from the prior year quarter to$656.4 million. Pet segment sales increased
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$18.3 million, and Garden segment sales increased$3.6 million.
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•Gross profit increased$16.9 million from the prior year quarter, and gross margin increased 160 basis points to 29.8%.
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•Selling, general and administrative expense decreased$2.7 million from the prior year quarter to$167.7 million and as a
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percentage of net sales decreased 140 basis points to 25.5%.
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•Operating income increased$19.6 million from the prior year quarter to$28.0 million.
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•Net Income in thefirst quarter of fiscal 2025 was$14.0 million, or$0.21 per diluted share, compared to$0.4 million, or
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$0.01 per diluted share, in thefirst quarter of fiscal 2024.
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the three months ended December 30, 2023. Net sales increased in both segments and was volume-based, benefitting from the timing of
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shipments, which was favorably impacted by a shift forward of sales previously expected in our second fiscal quarter and the timing of
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promotional activities in our Pet business. Branded product sales increased$21.6 million, and sales of other manufacturers’ products
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increased$0.3 million.
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Pet net sales increased$18.3 million, or 4.5%, to$427.5 million for the three months December 28, 2024, from$409.2 million for the
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three months ended December 30, 2023, due primarily to increased sales in our dog and cat treats and toys business. The increased sales
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in Pet were volume-based and benefitted from the favorable timing of shipments. Sales of consumables increased while sales of durable
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products declined, though the decline was at a lower rate than in previous quarters. Pet branded product sales increased$13.6 million, and
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sales of other manufacturers' products increased$4.7 million.
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Garden net sales increased$3.6 million, or 1.6%, to$228.9 million for the three months ended December 28, 2024, from$225.3 million
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for the three months ended December 30, 2023, benefitting from the timing of shipments supported by favorable weather. The increase in
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Garden net sales was due primarily to increased sales in our control and fertilizer businesses. Garden branded sales increased$8.0 million,
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and sales of other manufacturers' products decreased$4.4 million.
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2024, from 28.2% for the three months ended December 30, 2023. Both segments contributed to the gross profit increase due to higher
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Selling, general and administrative expenses decreased$2.7 million, or 1.6%, to$167.7 million for the three months ended December
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28, 2024. As a percentage of net sales, selling, general and administrative expenses decreased to 25.5% for the three months ended
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increased delivery costs related to the higher sales volume.
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Warehouse and administrative expense declined$6.1 million, or 6.0%, to$95.0 million for the three months ended December 28, 2024,
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from$101.1 million for the three months ended December 30, 2023. Both Pet and Garden warehouse and administrative expense
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decreased due primarily to savings from the recent closure of several facilities and headcount reductions. Corporate expense decreased
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Operating income increased$19.6 million to$28.0 million for the three months ended December 28, 2024. Our operating margin
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increased to 4.3% in the current year quarter from 1.3% in the prior year quarter. The increase in operating income was due to a$21.9
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expenses.
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Pet operating income increased$7.9 million, or 18.1%, to$51.3 million for the three months ended December 28, 2024, from$43.4
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million for the three months ended December 30, 2023, and Pet operating margin improved 140 basis points to 12.0%. Pet operating income
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and margin increased due to higher net sales and an improved gross margin partially offset by higher selling, general and administrative
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expenses.
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Garden operating income improved$11.3 million to income of$2.4 million for the three months ended December 28, 2024, from an
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operating loss of$8.9 million for the three months ended December 30, 2023, and Garden operating margin improved to 1.1%. Garden
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Corporate operating expense decreased$0.4 million, or 1.5%, from the prior year quarter due primarily to lower insurance costs
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Central Garden & Pet Company (“Central”) is a market leader in the pet and garden industries in the United States. For over 45 years,
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Central Garden & Pet Company (“Central”) is a market leader in the garden and pet industries in the United States. For over 40 years,
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communities grow stronger. We manage our operations through two reportable segments: Pet and Garden.
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manage our operations through two reportable segments: Pet and Garden.
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Our Pet segment includes dog and cat supplies such as treats and chews, toys, beds and containment, grooming products, waste
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Our Pet segment includes dog and cat supplies such as dog treats and chews, toys, pet beds and grooming products, waste
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management and training pads; supplies for aquatics, small animals, reptiles and pet birds including toys, enclosures and habitats, bedding,
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management and training pads, pet containment; supplies for aquatics, small animals, reptiles and pet birds including toys, enclosures and
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food and supplements; products for equine and livestock, animal and household health and insect control products; live fish and small
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habitats, bedding, food and supplements; products for equine and livestock, animal and household health and insect control products; live
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animals as well as outdoor cushions. These products are sold under brands such as Aqueon®, Cadet®, C&S®, Comfort Zone®, Farnam®,
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fish and small animals as well as outdoor cushions. These products are sold under brands such as Aqueon®, Cadet®, C&S®, Comfort
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Four Paws®, Kaytee®, Nylabone® and Zilla®.
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Zone®, Farnam®, Four Paws®, Kaytee®, Nylabone® and Zilla®.
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at an aggregate cost of approximately$39.9 million and 0.4 million shares of our voting common stock (CENT) on the open market at an
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stock (CENTA) and 0.4 million shares of our voting common stock (CENT) on the open market at an aggregate cost of $38.7 million. As of
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Net sales for the three months ended December 28, 2024, increased$21.9 million, or 3.5%, to$656.4 million from$634.5 million for
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Net sales for the three months ended March 29, 2025, decreased$66.6 million, or 7.4%, to$833.5 million from$900.1 million for the
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sales and improved gross margins. The gross margin improvement in both segments was driven by productivity gains resulting from our cost
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Both segments contributed to the improved gross margin, which was driven by productivity gains resulting from our Cost and
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and simplicity program (e.g., prior year facility consolidations and the exit of lower margin businesses) and moderating inflation.
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Simplicity program (e.g., prior year facility consolidations and the exit of lower margin businesses) and moderating inflation.
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December 28, 2024, compared to 26.9% in the comparable prior year quarter. Decreased selling, general and administrative expenses in
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2025, compared to 20.6% in the comparable prior year quarter due primarily to the decrease in net sales. Selling, general and administrative
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Selling and delivery expense increased$3.4 million to$72.7 million for the three months ended December 28, 2024, as compared to
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Selling and delivery expense decreased$0.7 million to$81.7 million for the three months ended March 29, 2025 as compared to$82.4
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million increase in net sales, a 160 basis point increase in gross margin and a$2.7 million decrease in selling, general and administrative
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$5.7 million decrease in selling, general and administrative expense.
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operating income increased due to higher net sales, an improved gross margin and lower selling, general and administrative expense.
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income increased due to an improved gross margin and lower selling, general and administrative expenses partially offset by lower net sales.
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$0.4 million, or 1.5%, to $25.7 million for the three months ended December 28, 2024, due primarily to lower insurance costs partially offset
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million for the three months ended March 30, 2024, due primarily to lower third-party expenses and lower insurance costs.
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Net interest expense for the three months ended December 28, 2024 decreased$2.0 million, or 20.4%, to$7.7 million from$9.7 million
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Net interest expense for the three months ended March 29, 2025 decreased$2.1 million, or 18.4%, to$9.4 million from$11.5 million
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for the three months ended December 30, 2023. The decrease in net interest expense was due to increased interest income resulting from
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for the three months ended March 30, 2024. The decrease in net interest expense was due to increased interest income resulting from higher
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our higher cash balance during the current quarter. Debt outstanding on December 28, 2024 was$1,190.4 million compared to$1,189.6
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cash balances during the current quarter. Debt outstanding on March 29, 2025 was$1,190.8 million compared to$1,189.3 million at March
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currency exchange gains and losses. Other income decreased$2.7 million to an expense of$1.7 million for the quarter ended December 28,
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currency exchange gains and losses. Other income increased$0.9 million to$0.7 million of income for the three months ended March 29,
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2024 from income of$1.0 million for the quarter ended December 30, 2023. The decrease in other income was due primarily to foreign
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2025 from$0.2 million of expense for the three months ended March 30, 2024. The increase in other income was due primarily to foreign
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currency losses in the current year quarter as compared to foreign currency gains in the prior year quarter.
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currency gains in the current year quarter as compared to foreign currency losses in the prior year quarter.
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Our effective income tax rate was 23.5% for the quarter ended December 28, 2024. Income tax expense was$4.4 million for the
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Our effective income tax rate was 23.5% for the quarter ended March 29, 2025 and 23.4% for the quarter ended March 30, 2024.
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the three months ended December 30, 2023. Gross margin increased 160 basis points to 29.8% for the three months ended December 28,
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months ended March 30, 2024. Gross margin improved 170 basis points to 31.5% for thesix months ended March 29, 2025 from 29.8% for
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Gross profit for the three months ended December 28, 2024, increased$16.9 million, or 9.4%, to$195.7 million from$178.8 million for
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fiscal 2024, gross profit for the six months ended March 29, 2025 increased$12.9 million, or 2.8%, to$473.2 million from$460.3 million for
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both Garden and corporate was partially offset by increased expense in Pet.
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Decreased selling, general and administrative expenses in both Garden and corporate were partially offset by increased expense in Pet.
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$69.3 million in the prior year quarter. The increase was in the Pet segment due primarily to higher media and digital marketing spend and
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million for thesix months ended March 30, 2024. The increase was in the Pet segment and due primarily to higher media and digital
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by increased third-party spend. Corporate expenses are included within administrative expense and relate to the costs of unallocated
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increased variable compensation. Corporate expenses are included within administrative expense and relate to the costs of unallocated
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We report our financial results in accordance with generally accepted accounting principles ("GAAP"). However, to supplement the
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We report our financial results in accordance with GAAP. However, to supplement the financial results prepared in accordance with
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adjusted EBITDA in making financial, operating and planning decisions and in evaluating our performance. Management believes this non-
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below) in making financial, operating and planning decisions and in evaluating our performance. Also, Management believes that these non-
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GAAP financial measure may be useful to investors in their assessment of our ongoing operating performance and provide additional
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GAAP financial measures may be useful to investors in their assessment of our ongoing operating performance and provide additional
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meaningful comparisons between current results and results in prior operating periods. While Management believes that this non-GAAP
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meaningful comparisons between current results and results in prior operating periods. While Management believes that non-GAAP
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measure is useful supplemental information, such adjusted results are not intended to replace our GAAP financial results and should be read
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measures are useful supplemental information, such adjusted results are not intended to replace our GAAP financial results and should be
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in conjunction with those GAAP results.
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read in conjunction with those GAAP results.
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compensation expense). We present adjusted EBITDA because we believe that adjusted EBITDA is a useful supplemental measure in
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because we believe that adjusted EBITDA is a useful supplemental measure in evaluating the cash flows and performance of our business
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EBITDA is used by our management to perform such evaluations. Adjusted EBITDA should not be considered in isolation or as a substitute
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and provides greater transparency into our results of operations. Adjusted EBITDA is used by our management to perform such evaluations.
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for cash flow from operations, income from operations or other income statement measures prepared in accordance with GAAP. We believe
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income statement measures prepared in accordance with GAAP. We believe that adjusted EBITDA is frequently used by investors, securities
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that adjusted EBITDA is frequently used by investors, securities analysts and other interested parties in their evaluation of companies, many
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analysts and other interested parties in their evaluation of companies, many of which present adjusted EBITDA when reporting their results.
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of which present adjusted EBITDA when reporting their results. Other companies may calculate adjusted EBITDA differently and it may not
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Other companies may calculate adjusted EBITDA differently and it may not be comparable.
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The reconciliations of adjusted EBITDA to the most directly comparable financial measures calculated and presented in accordance
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The reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in
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expense and relate to the costs of unallocated executive, administrative, finance, legal, human resources, and information technology
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thesix months ended March 30, 2024. The decrease in net interest expense was due to increased interest income resulting from higher
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Net Income and Earnings Per Share
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Adjusted EBITDA should not be considered in isolation or as a substitute for cash flow from operations, income from operations or other
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evaluating the cash flows and performance of our business and provides greater transparency into our results of operations. Adjusted