Central Garden & Pet's Strategic Logistics Expansion: A Catalyst for Shareholder Value

In an era where supply chain agility defines competitive advantage, Central Garden & Pet (CENT) has embarked on a transformative logistics overhaul, positioning itself to dominate the $50B+ pet and garden market. By consolidating and modernizing its fulfillment network-most notably with a state-of-the-art Salt Lake City hub, alongside new facilities in Easton, Pennsylvania, and Covington, Georgia-the company is not only cutting costs but also accelerating its omnichannel capabilities. These moves, underpinned by a disciplined "Cost and Simplicity" program, are poised to drive margin expansion and long-term shareholder value.

Operational Efficiency: The Bedrock of Margin Expansion

Central's logistics strategy centers on reducing complexity and enhancing throughput. The Salt Lake City facility, which consolidates two legacy sites in Ontario, California, and Salt Lake City, Utah, exemplifies this approach. By streamlining operations, the company has achieved a 280-basis-point gross margin expansion to 34.6% in Q3 2025, a direct result of its productivity initiatives, according to a CENT earnings release. While a $2.2 million charge was incurred in the same quarter for facility consolidation, the long-term savings from reduced overhead and optimized workflows are expected to outweigh these upfront costs, as noted in the same release.

The Easton and Covington hubs further amplify these gains. Designed with advanced safety systems and optimized workflows, these facilities enable faster, more cost-effective delivery across retail, e-commerce, and wholesale channels. According to a Stock Titan report, the integration of these three hubs into a unified logistics network has already improved drop shipment execution for retail partners and accelerated DTC fulfillment.

Omnichannel Agility: Fueling DTC and Retail Growth

Central's logistics upgrades are not merely cost-saving exercises-they are foundational to its omnichannel strategy. The Salt Lake City facility, for instance, is explicitly DTC-enabled, allowing the company to fulfill online orders with greater speed and reliability. This is critical in a market where e-commerce growth outpaces traditional retail. In Q3 2025, despite a 4% year-over-year decline in overall sales, categories like Wild Bird, Fertilizer, and Packet Seeds saw double-digit e-commerce gains, demonstrating the power of efficient fulfillment to drive niche growth, as noted in a Yahoo Finance article.

The Easton and Covington hubs similarly support retail partners by enabling faster restocking and reducing out-of-shelf scenarios. By aligning its logistics network with the needs of both direct-to-consumer and retail channels, Central is creating a flywheel effect: improved delivery speeds enhance customer satisfaction, which in turn drives repeat purchases and stronger retailer partnerships.

Long-Term Growth: A Scalable Foundation

The benefits of Central's logistics investments extend beyond near-term margins. By 2025, the company's nationwide network of modern hubs will enable it to serve customers from any channel-retail, e-commerce, or wholesale-with minimal friction. This scalability is crucial in a market where consumer preferences are rapidly shifting toward digital platforms. For example, the Salt Lake City hub's DTC capabilities allow Central to test new products and marketing strategies in real time, a flexibility that traditional retailers lack.

Moreover, the company's focus on environmental stewardship-such as energy-efficient facilities and reduced transportation emissions-aligns with growing investor demand for sustainable operations. As stated by CEO Niko Lahanas in a recent earnings call, "Our logistics network isn't just about speed and cost; it's about building a resilient, future-proof supply chain that meets the expectations of our customers and stakeholders alike," according to the CENT earnings release.

Conclusion: A Compelling Case for Shareholders

Central Garden & Pet's logistics expansion is a masterclass in operational reinvention. By cutting costs, accelerating delivery, and enhancing omnichannel agility, the company is laying the groundwork for sustained outperformance in a fragmented market. While macroeconomic headwinds persist, the structural advantages created by its modernized network-coupled with a disciplined approach to margin management-position CENT as a compelling long-term investment.