CENTRAL GARDEN & PET CO

Previous wording

Central Garden & Pet Company (“Central”) is a market leader in the garden and pet industries in the United States. For over 40 years,

Current wording

Central Garden & Pet Company (“Central”) is a market leader in the garden and pet industries in the United States. For over 40 years, Central has proudly nurtured happy and healthy homes by bringing innovative and trusted solutions to consumers and its customers. We manage our operations through two reportable segments: Pet and Garden.

Previous wording

Our Pet segment includes dog and cat supplies such as dog treats and chews, toys, pet beds and grooming products, waste

Current wording

Our Pet segment includes dog and cat supplies such as dog treats and chews, toys, pet beds and grooming products, waste management and training pads, pet containment; supplies for aquatics, small animals, reptiles and pet birds including toys, enclosures and habitats, bedding, food and supplements; products for equine and livestock, animal and household health and insect control products; live fish and small animals as well as outdoor cushions. These products are sold under brands such as Aqueon®, Cadet®, C&S®, Comfort Zone®, Farnam®, Four Paws®, Kaytee®, Nylabone® and Zilla®.

Previous wording

Our Garden segment includes lawn and garden consumables such as grass seed, vegetable, flower and herb packet seed; wild bird

Current wording

Our Garden segment includes lawn and garden consumables such as grass seed, vegetable, flower and herb packet seed; wild bird feed, bird houses and other birding accessories; weed, grass, and other herbicides, insecticide and pesticide products; fertilizers and live plants. These products are sold under brands such as Amdro®, Ferry-Morse®, Pennington® and Sevin®.

Previous wording

In fiscal 2024, our consolidated net sales were $3.2 billion, of which our Pet segment, or Pet, accounted for approximately $1.8 billion

Current wording

In fiscal 2024, our consolidated net sales were $3.2 billion, of which our Pet segment, or Pet, accounted for approximately $1.8 billion and our Garden segment, or Garden, accounted for approximately $1.4 billion. In fiscal 2024, our operating income was $185 million consisting of income from our Pet segment of $203 million, income from our Garden segment of $82 million and corporate expenses of $100 million.

Previous wording

We were incorporated in Delaware in May 1992 as the successor to a California corporation that was formed in 1955. Our executive

Current wording

We were incorporated in Delaware in May 1992 as the successor to a California corporation that was formed in 1955. Our executive offices are located at 1340 Treat Boulevard, Suite 600, Walnut Creek, California 94597, and our telephone number is (925) 948-4000. Our website is www.central.com. The information on our website is not incorporated by reference in this quarterly report.

Previous wording

•Net sales decreased$66.6 million, or 7.4%, from the prior year quarter to$834 million, with Pet net sales decreasing

Current wording

•Net sales decreased $35.4 million, or 3.6%, from the prior year quarter to $961 million, with Pet net sales decreasing 3.1% and Garden net sales decreasing 4.1%.

Previous wording

$1.04 per diluted share, in the second quarter of fiscal 2025.

Current wording

•Net income in the third quarter of fiscal 2025 was $95.0 million, or $1.52 per diluted share, compared to $79.7 million, or $1.19 per diluted share, in the third quarter of fiscal 2024. On a non-GAAP basis, net income was $97.9 million, or $1.56 per diluted share, in the third quarter of fiscal 2025 compared to $88.2 million, or $1.32 per diluted share, in the third quarter of fiscal 2024.

Previous wording

In March 2025, we decided to wind-down our operations in the United Kingdom, which also served certain European markets, as we

Current wording

In March 2025, we decided to wind-down our operations in the United Kingdom, which also served certain European markets, as we move to a direct-export model, and in the second quarter of fiscal 2025 incurred approximately $5.3 million of one-time costs, including $4.4 million in cost of goods sold and $0.9 million in selling, general and administrative expense. In the third quarter of fiscal 2025, we incurred approximately $1.7 million of incremental one-time costs, including $0.1 million in cost of goods sold and $1.6 million in selling, general and administrative expense. The amounts were primarily related to the liquidation of inventory and receivables, severance and legal costs. We expect to incur additional costs, including severance and facility closure costs, in the next two quarters of calendar 2025.

Previous wording

months ended March 30, 2024. Our branded product sales decreased$23 million, and sales of other manufacturers’ products decreased

Current wording

Net sales for the three months ended June 28, 2025, decreased $35.4 million, or 3.6%, to $960.9 million from $996.3 million for the three months ended June 29, 2024. Our branded product sales decreased $19.1 million, and sales of other manufacturers’ products decreased $16.3 million.

Previous wording

products, particularly our outdoor cushion and pet bed business and our aquatics business. Pet branded product sales decreased$28.9

Current wording

Pet net sales decreased $15.5 million, or 3.1%, to $492.5 million for the three months ended June 28, 2025, from $508.0 million for the three months ended June 29, 2024. The decline in net sales was due primarily to the continued decline in pet durable products, particularly in our outdoor cushion and pet bed business and aquatics business, and further by exiting lower-margin SKUs in durable products. This decline was partially offset by increased sales in our professional business and pet distribution business. Pet branded product sales decreased $18.1 million, and sales of other manufacturers' products increased $2.6 million.

Previous wording

six months ended March 30, 2024. The decline in Garden net sales was due primarily to the loss of two product lines in our third-party

Current wording

Garden net sales decreased $19.9 million, or 4.1%, to $468.4 million for the three months ended June 28, 2025 from $488.3 million for the three months ended June 29, 2024. The decline in Garden net sales was due primarily to decreased sales of third-party products negatively impacted by the loss of distribution of two product lines in our garden distribution business and extended periods of cool and rainy weather, which impacted some seasonal categories, particularly in controls and live plants. The declines were partially offset by increased sales in our fertilizer business and packet seed business. Garden branded product sales decreased $1.0 million, and sales of other manufacturers' products decreased $18.9 million.

Previous wording

On a non-GAAP basis, which excludes the impact of charges for facility closures in the second quarter of fiscal 2025 and fiscal 2024,

Current wording

On a non-GAAP basis, which excludes the impact of the charges for facility closures in the current period and costs to exit the pottery business in the prior period, non-GAAP gross profit increased $6.6 million and gross margin increased 190 basis points to 34.6% for the three months ended June 28, 2025, from 32.7% for the three months ended June 29, 2024.

Previous wording

As a percentage of net sales, selling, general and administrative expenses increased to 21.6% for the three months ended March 29,

Current wording

Selling, general and administrative expenses decreased $4.2 million, or 2.1%, to $196.9 million for the three months ended June 28, 2025. As a percentage of net sales, selling, general and administrative expenses increased to 20.5% for the three months ended June 28, 2025, compared to 20.2% in the comparable prior year quarter due primarily to the decrease in net sales. Selling, general and administrative expenses decreased in both corporate and Garden, partially offset by an increase in Pet, as compared to the prior year quarter.

Previous wording

million in the prior year quarter. The decreased expense was in the Garden segment due primarily to lower headcount.

Current wording

Selling and delivery expense decreased $2.9 million to $94.0 million for the three months ended June 28, 2025 as compared to $96.9 million in the prior year quarter. The decreased expense was in the Garden segment due primarily to lower marketing expense and merchandising expense, both impacted by lower headcount.

Previous wording

from$103.1 million for the three months ended March 30, 2024. The decrease in warehouse and administrative expense was primarily in

Current wording

Warehouse and administrative expense decreased $1.3 million, or 1.3%, to $102.9 million for the three months ended June 28, 2025 from $104.2 million for the three months ended June 29, 2024. The decrease in warehouse and administrative expense was primarily at corporate and a minor decrease in Garden, partially offset by an increase in Pet. Corporate expense decreased $5.6 million due primarily to lower compensation expense related to reduced headcount and lower insurance costs. Corporate expenses are included within administrative expense and relate to the costs of unallocated executive, administrative, finance, legal, human resources, and information technology functions.

Previous wording

$5.7 million decrease in selling, general and administrative expense.

Current wording

Operating income increased $19.2 million, or 16.6%, to $135.1 million for the three months ended June 28, 2025 from $115.9 million for the three months ended June 29, 2024. Our operating margin increased from 11.6% in the prior year quarter to 14.1% in the current year quarter. The increase in operating income was due to a 280 basis point increase in gross margin and a $4.2 million decrease in selling, general and administrative expense, partially offset by a $35.4 million decrease in net sales.

Previous wording

for the three months ended March 30, 2024. Pet operating income decreased due to a$26.5 million decline in net sales partially offset by

Current wording

Pet operating income decreased $6.9 million, or 8.3%, to $76.2 million for the three months ended June 28, 2025 from $83.1 million for the three months ended June 29, 2024. Pet operating income decreased due to a $15.5 million decline in net sales and increased selling, general and administrative expense partially offset by improved gross margin.

Previous wording

income increased due to an improved gross margin and lower selling, general and administrative expenses partially offset by lower net sales.

Current wording

Garden operating income increased $20.5 million to $83.0 million for the three months ended June 28, 2025 from $62.5 million for the three months ended June 29, 2024. Garden operating income increased due to an improved gross margin and lower selling, general and administrative expenses partially offset by lower net sales.

Previous wording

million for the three months ended March 30, 2024, due primarily to lower third-party expenses and lower insurance costs.

Current wording

Corporate operating expense decreased $5.6 million, or 18.8%, to $24.1 million for the three months ended June 28, 2025 from $29.7 million for the three months ended June 29, 2024, due primarily to lower compensation expense related to reduced headcount and lower insurance costs.

Previous wording

for the three months ended March 30, 2024. The decrease in net interest expense was due to increased interest income resulting from higher

Current wording

Net interest expense for the three months ended June 28, 2025 decreased $1.4 million, or 13.4%, to $8.8 million from $10.2 million for the three months ended June 29, 2024. The decrease in net interest expense was due to increased interest income resulting from higher cash balances during the current quarter. Debt outstanding on June 28, 2025 was $1,191.3 million compared to $1,189.7 million at June 29, 2024.

Previous wording

Other income is comprised of income or losses from investments accounted for under the equity method of accounting and foreign

Current wording

Other income is comprised of income or losses from investments accounted for under the equity method of accounting and foreign currency exchange gains and losses. Other income increased $0.8 million to $1.1 million for the three months ended June 28, 2025. The increase in other income was due primarily to foreign currency gains in the current year quarter.

Previous wording

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.

Current wording

Our effective income tax rate was 25.1% for the quarter ended June 28, 2025 and 24.0% for the quarter ended June 29, 2024. The increase in our effective income tax rate was due primarily to the non-deductibility for tax purposes of losses incurred in connection with the wind-down of our U.K. operations.

Previous wording

months ended March 30, 2024. The decline in Pet net sales was due primarily to lower sales of durable items impacting outdoor cushions,

Current wording

Pet net sales decreased $24 million, or 1.7%, to $1,374 million for the nine months ended June 28, 2025. The decline in Pet net sales was due primarily to lower sales of durable items impacting outdoor cushions, pet beds and aquatics. Pet branded sales decreased $33 million, and sales of other manufacturers' products increased $9 million.

Previous wording

negatively impacted by the loss of distribution of two product lines. These declines were partially offset by increased sales of our Wild Bird

Current wording

Garden net sales decreased $56 million, or 5.0%, to $1,077 million for the nine months ended June 28, 2025. The decline in Garden net sales was due primarily to decreased sales of third-party products negatively impacted by the loss of distribution of two product lines and extended periods of cool and rainy weather during the garden season, which impacted some seasonal categories. The declines were partially offset by increased sales in our wild bird feed business and fertilizer business. Garden branded sales decreased $9 million, and sales of other manufacturers’ products decreased $47 million.

Previous wording

Both segments contributed to the improved gross margin, which was driven by productivity gains resulting from our Cost and

Current wording

Both the Garden and Pet segments contributed to the improved gross profit and gross margin, with Garden being the larger contributor. The improvements were driven by productivity gains resulting from our Cost and Simplicity program. Prior year initiatives under the program, including facility consolidations, productivity initiatives and the exit of lower margin businesses have positively impacted our gross margin in the current year. Secondarily, Garden was positively impacted by the cost reductions and efficiency gains resulting from the focus on SKU rationalization and production processes.

Previous wording

On a non-GAAP basis, which excludes the impact of the charges related to facility closures in the second quarter of fiscal 2025 and

Current wording

On a non-GAAP basis, which excludes the impact of the charges related to facility closures in fiscal 2025 and fiscal 2024, the winding down of our operations in the U.K. in fiscal 2025, and exiting the pottery business in fiscal 2024, gross profit for the nine months ended June 28, 2025 increased $19.6 million, or 2.5%, to $805.5 million from $785.9 million for the nine months ended June 29, 2024. Non-GAAP gross margin increased 180 basis points to 32.9% for the nine months ended June 28, 2025 from 31.1% for the nine months ended June 29, 2024.

Previous wording

Decreased selling, general and administrative expenses in both Garden and corporate were partially offset by increased expense in Pet.

Current wording

Selling, general and administrative expenses decreased $12.6 million, or 2.3%, to $544.4 million for the nine months ended June 28, 2025 from $557.0 million for the nine months ended June 29, 2024. As a percentage of net sales, selling, general and administrative expenses increased to 22.2% for the nine months ended June 28, 2025 from 22.0% for the prior year nine-month period. Decreased selling, general and administrative expenses in both Garden and corporate were partially offset by increased expense in Pet.

Previous wording

administrative expense. The decrease was due primarily to cost reductions resulting from prior facility closures and the exit of lower margin

Current wording

Warehouse and administrative expense decreased $12.4 million, or 4.0%, to $296.0 million for the nine months ended June 28, 2025 from $308.4 million for the nine months ended June 29, 2024. Decreased expense in corporate and Garden was partially offset by a small increase in Pet. The decrease in corporate was due primarily to lower insurance expense, partially offset by increased variable compensation, and the decrease in Garden was due primarily to cost reductions resulting from prior facility closures and the exit of lower margin business. Corporate expenses are included within administrative expense and relate to the costs of unallocated executive, administrative, finance, legal, human resources, and information technology functions.

Previous wording

improvement in gross margin, and an$8.4 million decrease in selling, general and administrative expense.

Current wording

Operating income increased $38.6 million, or 17.7%, to $256.4 million for the nine months ended June 28, 2025 from $217.8 million for the nine months ended June 29, 2024. Our operating margin increased to 10.5% for the nine months ended June 28, 2025 from 8.6% for the nine months ended June 29, 2024. Operating income increased due to a $26.0 million increase in gross profit driven by a 210 basis point improvement in gross margin, and a $12.6 million decrease in selling, general and administrative expense.

Previous wording

six months ended March 30, 2024. Garden operating income increased due to an increase in gross profit and gross margin and lower

Current wording

Garden operating income increased $33.4 million to $144.1 million for the nine months ended June 28, 2025 from $110.7 million for the nine months ended June 29, 2024. Garden operating income increased due to an increase in gross profit and gross margin and lower selling, general and administrative expenses.

Previous wording

comparable fiscal 2024 period due primarily to decreased insurance and third-party expense partially offset by increased variable

Current wording

Corporate operating expense decreased $6.2 million to $75.8 million in the current nine-month period from $82.0 million in the comparable fiscal 2024 period due primarily to decreased insurance and third-party expense partially offset by increased variable compensation.

Previous wording

cash balances during the currentsix-month period. Debt outstanding as of March 29, 2025 was$1,190.8 million compared to$1,189.3 million

Current wording

Net interest expense for the nine months ended June 28, 2025 decreased $5.5 million, or 17.4%, to $25.9 million from $31.4 million for the nine months ended June 29, 2024. The decrease in net interest expense was due to increased interest income resulting from higher cash balances during the current nine-month period. Debt outstanding as of June 28, 2025 was $1,191.3 million compared to $1,189.7 million as of June 29, 2024.

Previous wording

current six-month period as compared to foreign currency gains in the prior year six-month period.

Current wording

Other income decreased $0.9 million to $0.1 million for the nine months ended June 28, 2025, from $1.0 million for the nine months ended June 29, 2024. The decrease in other income was due primarily to lower equity method earnings and foreign currency gains in the current nine-month period as compared to the prior year nine-month period.

Previous wording

Our net income for thesix months ended March 29, 2025 was$77.6 million, or$1.19 per diluted share, compared to$62.4 million, or

Current wording

Our 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 nine months ended June 29, 2024.

Previous wording

On a non-GAAP basis, net income for thesix-month period ended March 29, 2025 was$81.7 million or$1.25 per diluted share,

Current wording

On a non-GAAP basis, net income for the nine-month period ended June 28, 2025 was $179.6 million or $2.79 per diluted share, compared to $154.7 million, or $2.31 per diluted share, for the nine-month period ended June 29, 2024.

Previous wording

We report our financial results in accordance with GAAP. However, to supplement the financial results prepared in accordance with

Current wording

We report our financial results in accordance with GAAP. However, to supplement the financial results prepared in accordance with GAAP, we use non-GAAP financial measures including non-GAAP net income and diluted net income per share, non-GAAP operating income, and adjusted EBITDA. Management uses these non-GAAP financial measures that exclude the impact of specific items (described below) in making financial, operating and planning decisions and in evaluating our performance. Also, Management believes that these non-GAAP financial measures may be useful to investors in their assessment of our ongoing operating performance and provide additional meaningful comparisons between current results and results in prior operating periods. While Management believes that non-GAAP measures are useful supplemental information, such adjusted results are not intended to replace our GAAP financial results and should be read in conjunction with those GAAP results.

Previous wording

Adjusted EBITDA is defined by us as income before income tax, net other expense, net interest expense and depreciation and

Current wording

Adjusted EBITDA is defined by us as income before income tax, net other expense, net interest expense and depreciation and amortization and stock-based compensation expense (or operating income plus depreciation and amortization expense and stock-based compensation expense). Adjusted EBITDA further excludes charges related to facility closures. We present adjusted EBITDA because we believe that adjusted EBITDA is a useful supplemental measure in evaluating the cash flows and performance of our business and provides greater transparency into our results of operations. Adjusted EBITDA is used by our management to perform such evaluations. Adjusted EBITDA should not be considered in isolation or as a substitute for cash flow from operations, income from operations or other income statement measures prepared in accordance with GAAP. We believe that adjusted EBITDA is frequently used by investors, securities analysts and other interested parties in their evaluation of companies, many of which present adjusted EBITDA when reporting their results. Other companies may calculate adjusted EBITDA differently and it may not be comparable.

Previous wording

The reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in

Current wording

The reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are shown in the tables below.

Previous wording

represent infrequent transactions that impact the comparability between operating periods. We believe these exclusions

Current wording

•Facility closures and business exit: we have excluded charges related to the closure of distribution and manufacturing facilities and our decisions to exit the businesses as they represent infrequent transactions that impact the comparability between operating periods. We believe these exclusions supplement the GAAP information with a measure that may be useful to investors in assessing the sustainability of our operating performance.

Previous wording

From time to time in the future, there may be other items that we may exclude if we believe that doing so is consistent with the goal of

Current wording

From time to time in the future, there may be other items that we may exclude if we believe that doing so is consistent with the goal of providing useful supplemental information to investors and management.