Central Garden & Pet Company (CENT) Q3 2024 earnings summary

Executive summary

• Q3 FY24 net sales were $996 million, down 2.6–3% year-over-year, with organic net sales also declining 2.9–3%.

• GAAP EPS was $1.19 (vs. $1.25 prior year); non-GAAP EPS was $1.32 (vs. $1.40 prior year).

• Gross margin expanded by 70 basis points to 31.8%, driven by Cost and Simplicity initiatives, including exiting the pottery business and closing a live plants distribution facility.

• Facility closures and business exits led to $11.1 million in one-time costs in Q3 2024.

• Maintained non-GAAP EPS guidance of $2.00 or better for FY24, despite a $15–20 million anticipated grass seed inventory write-down in Q4.

Financial highlights

• Net sales were $996 million, down 2.6–3% year-over-year; organic net sales also declined 2.9–3%.

• Gross profit was $317 million, nearly flat year-over-year; non-GAAP gross profit was $326 million.

• Non-GAAP operating income was $127 million; non-GAAP operating margin was 12.8%.

• Adjusted EBITDA was $156 million, down from $166 million prior year.

• Effective tax rate was 24.0%.

Outlook and guidance

• Fiscal 2024 non-GAAP EPS expected to be $2.00 or better, despite a one-time Q4 charge of $15–20 million for grass seed inventory write-down.

• Capital expenditures for fiscal 2024 projected at approximately $60 million.

• Guidance reflects ongoing market challenges, including volatile weather, value-seeking consumers, and macro/geopolitical volatility.

• Excludes impact of any Q4 restructuring activities.