Central Garden & Pet Company (CENT) Q2 2025 earnings summary

Executive summary

• Q2 FY25 delivered strong execution and margin expansion despite a 7% sales decline, with GAAP EPS rising to $0.98 and non-GAAP EPS to $1.04, supported by productivity gains and cost initiatives.

• Net income grew to $64M, and record non-GAAP operating income was achieved in the Pet segment.

• Continued progress on streamlining operations, including footprint consolidation, portfolio refinement, and the Cost and Simplicity program.

• Reaffirmed full-year non-GAAP EPS guidance of $2.20 or higher, reflecting confidence in ongoing strategy.

• Initiated wind-down of U.K. operations, incurring a $5.3M non-cash charge, and continued share repurchases.

Financial highlights

• Q2 FY25 net sales were $834M, down 7% year-over-year; gross profit was $273M, down 2%, but gross margin expanded by 180 bps to 32.8%.

• GAAP operating income was $93M, flat year-over-year; non-GAAP operating income was $99M, also flat; adjusted EBITDA was $123M, $1M below prior year.

• SG&A expense decreased 3% to $180M; as a percentage of sales, SG&A rose to 21.6%.

• GAAP EPS increased to $0.98 from $0.93; non-GAAP EPS rose to $1.04 from $0.99.

• Cash and equivalents at $517M, up $215M year-over-year; total debt at $1.2B; gross leverage ratio: 2.9x.

Outlook and guidance

• Reaffirmed FY25 non-GAAP EPS guidance of $2.20 or better, incorporating anticipated inflation, consumer caution, and a more promotional retail environment.

• FY25 capital expenditures expected at approximately $60M, focused on productivity and maintenance.

• Guidance excludes impacts from future tariffs, acquisitions, divestitures, or restructuring.

• Management expects continued cost and productivity improvements to support margins.

• Principal sources of liquidity are expected to be cash from operations and available credit.