Central Garden & Pet Announces Q1 Fiscal 2025 Financial Results

Fiscal 2025 Q1 net sales of $656 million vs. $635 million in the prior year

Fiscal 2025 Q1 EPS of $0.21 vs. $0.01 a year ago

Maintains 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 results for its fiscal 2025 first quarter ended December 28, 2024.

“The fiscal year is off to a strong start, driven by increased first quarter shipments, productivity gains and easing inflation, all contributing to growth in both our top and bottom line,” said Niko Lahanas, CEO of Central Garden & Pet. “We are encouraged by our first quarter performance, but recognize this period is typically our smallest quarter and benefited from the favorable timing of shipments and promotional activities. We remain confident in our fiscal year outlook and committed to executing our Central to Home strategy with excellence.”

Fiscal 2025 First Quarter Financial Results

Net sales increased 3% to $656 million from $635 million a year ago.

Gross profit was $196 million compared to $179 million in the prior year quarter. Gross margin improved by 160 basis points to 29.8% driven by productivity gains and moderating inflation.

SG&A expense was $168 million compared to $170 million in the prior year. SG&A as a percentage of net sales decreased by 140 basis points to 25.5% reflecting cost discipline across the organization.

Operating income grew to $28 million from $8 million a year ago. Operating margin expanded by 300 basis points to 4.3%.

Net interest expense was $8 million compared to $10 million a year ago driven by higher interest income.

Net income was $14 million compared $0.4 million in the prior year. Earnings per share were $0.21 compared to $0.01.

Adjusted EBITDA rose to $55 million from $37 million a year ago.

The effective tax rate was 23.5%.

Pet Segment Fiscal 2025 First Quarter Results

Net sales for the Pet segment increased 4% to $427 million from $409 million in the prior year quarter driven primarily by customers shifting orders into the first quarter and the timing of promotional activities.

Pet segment operating income grew to $51 million from $43 million a year ago. Operating margin expanded by 140 basis points to 12.0% from 10.6% in the prior year quarter driven by productivity efforts and moderating inflation.

Pet segment adjusted EBITDA rose to $61 million from $54 million a year ago.

Garden Segment Fiscal 2025 First Quarter Results

Net sales for the Garden segment increased 2% to $229 million from $225 million a year ago driven primarily by customers shifting orders into the first quarter, supported by favorable weather.

Garden segment operating income was $2 million compared to an operating loss of $9 million in the prior year quarter. Operating margin improved by 500 basis points to 1.1% from negative 3.9% a year ago, driven by moderating inflation, productivity gains and exiting the low-margin pottery business.

Garden segment adjusted EBITDA was $14 million compared to $2 million in the prior year quarter.

Liquidity and Debt

The cash balance at the end of the quarter was $618 million compared to $341 million a year ago. Cash used by operations during the quarter was $69 million compared to $70 million a year ago.

Total debt as of December 28, 2024 and December 30, 2023 was $1.2 billion. The gross leverage ratio, calculated using the definitions for Indebtedness and EBITDA in Central’s credit agreement, at the end of the first quarter was 2.9x compared to 3.0x at the end of the prior year quarter.

Central repurchased 1.68 million shares or $52 million of its stock during the quarter. As of the end of the fiscal first quarter, $131 million remains available for future stock repurchases.

Cost and Simplicity Program

Central continues to make significant progress in its multi-year Cost and Simplicity program, which encompasses a comprehensive pipeline of initiatives across procurement, manufacturing, logistics, portfolio management, and administrative costs. These efforts aim to streamline operations, enhance efficiency, and simplify the business across the organization.

Fiscal 2025 Guidance

Central continues to expect fiscal 2025 non-GAAP EPS to be $2.20 or better.

This outlook reflects the expected impact of the recently announced tariffs, deflationary pressure in certain commodity businesses, shifting consumer behavior amid macroeconomic and geopolitical uncertainty, and challenges within the brick-and-mortar retail landscape. This outlook excludes the potential impact of 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 to range between $60 million and $70 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