Central Garden & Pet Company Stock Earnings Reports

Central reported a solid fiscal Q2 driven by operational execution and margin expansion despite a 7% sales decline to $834M caused by earlier preseason order timing, unseasonable weather (delaying the garden season), and the loss of two third‑party Garden product lines. Key positives: gross margin expanded 180 bps to 32.8%, non‑GAAP operating income held steady at $99M with operating margin up 80 bps, Pet delivered a record second‑quarter non‑GAAP operating income and e‑commerce penetration in Pet rose to 27%, and Wild Bird delivered record sales. The Cost & Simplicity program continues to drive productivity (inventory down $90M in the quarter) and logistics improvements (new DTC‑enabled and centralized distribution centers). Management reaffirmed fiscal 2025 non‑GAAP EPS guidance of $2.20 or higher while flagging heightened macro uncertainty from recent tariff actions, which may increase inflationary pressure (particularly in Pet durables/imports) and lead to a more promotional retail environment. Balance sheet and capital allocation highlights: $517M cash, total debt ~$1.2B, gross leverage ~2.9x and net leverage ~1.7x, continued share repurchases (~2.4M shares purchased year‑to‑date), and fiscal 2025 CapEx guidance of about $60M. M&A remains a priority (targeting high‑growth consumables), but deal flow is muted amid macro and tariff uncertainty. Management is focused on cost, supply‑chain flexibility, SKU rationalization and selective pricing to manage potential tariff impacts.