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1. Company Snapshot

1.a. Company Description

Central Garden & Pet Company produces and distributes various products for the lawn and garden, and pet supplies markets in the United States.It operates through two segments, Pet and Garden.The Pet segment provides dog and cat supplies, such as dog treats and chews, toys, pet beds and grooming products, waste management and training pads, and pet containment; supplies for aquatics, small animals, reptiles, and pet birds, including toys, cages and habitats, bedding, and food and supplements; animal and household health and insect control products; live fish and products for fish, reptiles, and other aquarium-based pets, such as aquariums, furniture and lighting fixtures, pumps, filters, water conditioners, food, and supplements; and products for horses and livestock, as well as outdoor cushions and pillows.


This segment sells its products under the Aqueon, Cadet, Comfort Zone, Farnam, Four Paws, Kaytee, K&H Pet Products, Nylabone, and Zilla brands.The Garden segment offers lawn and garden supplies products that include grass seed; wild bird feed, bird feeders, bird houses, and other birding accessories; fertilizers; decorative outdoor lifestyle products; live plants; and weed and grass, as well as other herbicides, insecticide, and pesticide products.This segment sells its lawn and garden supplies products under the AMDRO, Ferry-Morse, Pennington, and Sevin brands, as well as under Bell Nursery, Lilly Miller, and Over-N-Out other brand names.


Central Garden & Pet Company was founded in 1955 and is based in Walnut Creek, California.

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1.b. Last Insights on CENT

Central Garden & Pet Company's recent performance has been negatively impacted by concerns over potential margin pressure from proposed tariffs on imports, which could offset the benefits from its Cost & Simplicity Program. Additionally, management's cautious tone on Q2 normalization due to shipment timing and promotional activities may have contributed to the negative sentiment.

1.c. Company Highlights

2. Central Garden & Pet: Delivering Record Earnings Amidst Challenging Top-Line Environment

Central Garden & Pet Company reported a mixed bag in its fiscal 2025 results, with net sales declining 2% to $3.1 billion, driven by the company's proactive decision to reduce exposure to lower-margin businesses and the transition of two third-party product lines in its Garden Distribution business to a direct-to-retail model. However, the company's non-GAAP gross profit rose 4.5% to $1 billion, and non-GAAP gross margin expanded 210 basis points to 32.1%. The company's record bottom-line performance was reflected in its non-GAAP net income, which totaled $174 million, up 22%, and non-GAAP earnings per share of $2.73, a record. The company's actual EPS beat estimates, with a non-GAAP EPS of $2.73 compared to the expected figure.

Publication Date: Nov -25

📋 Highlights
  • Record Bottom-Line Performance:: Net sales reached $3.1 billion (2% decrease), with non-GAAP net income of $174 million (up 22%) and record EPS of $2.73, reflecting margin expansion and disciplined cost management.
  • Gross Margin Expansion:: Non-GAAP gross margin expanded 210 basis points to 32.1%, driven by portfolio optimization and operational efficiencies, contributing to $1 billion in non-GAAP gross profit.
  • Garden Segment Growth:: Net sales increased 7% to $250 million, with double-digit e-commerce growth (10% of total segment sales) and strong performance in wild bird, grass seed, and fertilizer businesses.
  • 2026 Guidance:: Non-GAAP EPS target of $2.70/share or higher, supported by operational excellence, margin expansion, and $50-60 million in CapEx, alongside $333 million in fiscal 2025 cash flow from operations.
  • Strategic Financial Position:: Ended with 0.8 net leverage ratio, no credit facility borrowings, and $18 million in share repurchases (part of $150 million over the past year), prioritizing M&A for margin-accretive pet consumables opportunities.

Segment Performance

The Garden segment delivered a strong performance, with net sales increasing 7% to $250 million, driven by an extended selling season and improved sell-through. The company's wild bird, grass seed, fertilizer, and packet seed businesses delivered strong quarters with growth in both sales and share. Garden e-commerce sales grew at a double-digit rate, surpassing 10% of total segment sales for the first time. As Bradley G. Smith mentioned, "In our Garden segment, net sales were $250 million, a 7% increase, driven by an extended selling season and improved sell-through."

Guidance and Outlook

For fiscal 2026, the company is guiding non-GAAP EPS to $2.70 a share or better, reflecting continued focus on operational excellence, margin expansion, and disciplined cost management. The company expects consumers to remain focused on value and performance, with a promotionally active but stable retail environment and continued channel shifts from pet specialty to e-commerce. Analysts estimate next year's revenue growth at 0.1%, indicating a challenging top-line environment.

Valuation

Looking at the company's valuation metrics, the current P/E Ratio is 11.91, and the P/S Ratio is 0.63. The EV/EBITDA ratio is 7.8, indicating that the company's enterprise value is reasonable relative to its EBITDA. The company's ROE is 10.45%, and ROIC is 6.14%, suggesting a decent return on equity and invested capital. The Net Debt / EBITDA ratio is 1.72, indicating a manageable debt burden.

Tariff Impact and Pricing Strategy

The company expects tariffs to have a significant impact, with gross tariffs of $7-8 million in Q4. The company is negotiating with customers to pass on price increases, with most discussions expected to be completed by the end of Q1 or early Q2. The pricing embedded in the fiscal 2026 guide is modest, around 1%, designed to offset tariffs and commodity exposure.

3. NewsRoom

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Central Garden & Pet Company (CENT) Presents at Bank of America Leveraged Finance Conference Transcript

Dec -02

Source: seekingalpha.com

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Central Garden & Pet Company (CENT) Presents at Morgan Stanley Global Consumer & Retail Conference 2025 Transcript

Dec -02

Source: seekingalpha.com

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Nylabone Cares™ Gives Back With $1.3 Million of Donations in 2025

Dec -02

Source: businesswire.com

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Handelsbanken Fonder AB Sells 3,000 Shares of Central Garden & Pet Company $CENT

Dec -01

Source: defenseworld.net

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Central Garden & Pet Posts Narrower-Than-Expected Q4 Loss, Sales Rise

Nov -25

Source: zacks.com

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Central Garden & Pet Company (CENT) Q4 2025 Earnings Call Transcript

Nov -25

Source: seekingalpha.com

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Central Garden (CENT) Reports Q4 Loss, Beats Revenue Estimates

Nov -24

Source: zacks.com

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Central Garden & Pet Reports Fourth Quarter and Fiscal Year 2025 Financial Results and Provides Fiscal 2026 Outlook

Nov -24

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.84%)

6. Segments

Pet

Expected Growth: 1.8%

Pet segment growth of 1.8% driven by increasing pet humanization, rising disposable income, and growing demand for premium pet food and supplies. Additionally, the company's focus on e-commerce expansion, strategic acquisitions, and innovative product offerings contribute to the segment's growth.

Garden

Expected Growth: 1.9%

Garden segment's 1.9% growth is driven by increasing consumer spending on outdoor living, rising demand for organic and sustainable gardening practices, and the company's strategic expansion into e-commerce and omnichannel retailing, further boosted by its strong brand portfolio and effective marketing strategies.

7. Detailed Products

Pet Food

High-quality pet food products for dogs, cats, and other small animals

Wild Bird Feed

Variety of bird seed blends and suet cakes to attract and nourish wild birds

Lawn and Garden Care

Fertilizers, pesticides, and other lawn and garden care products for a healthy and thriving outdoor space

Pet Supplies

Accessories and supplies for pets, including toys, beds, and grooming tools

Aquatics

Aquatic products, including aquariums, fish food, and water care solutions

Companion Animal Health

Health supplements and preventative care products for dogs, cats, and other small animals

Gardening

Seeds, plants, and gardening tools for growing and maintaining a garden

8. Central Garden & Pet Company's Porter Forces

Forces Ranking

Threat Of Substitutes

Central Garden & Pet Company faces moderate threat from substitutes, as pet owners may opt for alternative pet care products or services, but the company's strong brand presence and product offerings mitigate this threat.

Bargaining Power Of Customers

Central Garden & Pet Company's customers have limited bargaining power due to the company's diverse product offerings and strong distribution network, making it difficult for customers to negotiate prices or terms.

Bargaining Power Of Suppliers

Central Garden & Pet Company's suppliers have moderate bargaining power, as the company relies on a few key suppliers for raw materials, but the company's scale and diversification efforts reduce this risk.

Threat Of New Entrants

The threat of new entrants is low for Central Garden & Pet Company, as the company's established brand presence, distribution network, and regulatory hurdles create barriers to entry for new competitors.

Intensity Of Rivalry

The pet care industry is highly competitive, with many established players, leading to a high intensity of rivalry, but Central Garden & Pet Company's diversified product offerings and strong brand presence help the company maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 48.64%
Debt Cost 5.34%
Equity Weight 51.36%
Equity Cost 7.26%
WACC 6.33%
Leverage 94.70%

11. Quality Control: Central Garden & Pet Company passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

33.52$

Current Price

33.52$

Potential

-0.00%

Expected Cash-Flows