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Did Central Garden & Pet beat or miss consensus estimates last quarter?

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- **Record Fiscal 2025 Performance**: $371M EBITDA and $2.55 EPS, up 12% and 24% YoY, driven by cost efficiency and portfolio optimization.
- **2026 Margin Expansion**: Guide to $2.70+ EPS with 1% pricing to offset $20M annual tariffs, supported by $50-60M CapEx in productivity and innovation.
- **Garden Growth Catalysts**: 8%+ distribution growth (excluding exited businesses), digital sales >10% of segment, and cautious optimism on weather-driven 2026 season.
- **M&A and Capital Allocation**: $18M Q4 buybacks (vs. $150M+ annualized pace) and active pursuit of margin-accretive M&A in pet consumables.

**【CEO Summary Section】**
- Fiscal 2025 was a year of operational rigor, with record EBITDA ($371M) and EPS ($2.55), driven by portfolio optimization and cost management.
- **Cost and Simplicity Agenda**: Completed multiyear supply chain redesign, closing 16 legacy facilities and modernizing fulfillment centers in Salt Lake City, Eastern PA, and Covington, GA.
- **Fiscal 2026 Outlook**: Guide to non-GAAP EPS of $2.70+ with margin expansion, offsetting $20M annual tariff exposure through pricing and supply chain actions.
- **Strategic Investments**: $50-60M in CapEx for productivity and innovation, e.g., digital marketing and e-commerce growth (Garden e-commerce >10% of segment sales).

**【CFO Financial Commentary】**
- FY25 Results:
  - Net Sales: $3.1B (-2% YoY), driven by strategic exits (U.K. operations, low-margin durables) and direct-to-retail transitions.
  - Non-GAAP Gross Margin: 32.1% (+210bps YoY), supported by $15M in productivity gains.
  - Non-GAAP Operating Income: $265M (+19% YoY), with operating margin 8.5%.
  - Cash Flow: $333M (vs. $395M prior year), with $36M inventory reduction.
- Q4 Results:
  - Net Sales: $678M (+1% YoY), Garden segment up 7% on favorable weather.
  - Non-GAAP Gross Margin: 29.1% (+310bps YoY), offsetting $7-8M quarterly tariff impact.
  - Non-GAAP EPS: $0.09 (vs. $0.18 prior year), impacted by one-time U.K. wind-down costs.

**【Q&A Highlights】**
- **Tariffs and Pricing**: 2026 pricing actions (+1%) to offset tariffs, with 50% of negotiations completed with key customers.
- **Garden Outlook**: Cautiously optimistic for FY26, with 8%+ distribution growth (excluding exited pottery business) and digital sales >10% of segment.
- **M&A Pipeline**: Actively pursuing margin-accretive pet consumables, despite limited deal flow.
- **Share Repurchases**: $18M in Q4, with $150M+ annualized pace, reflecting confidence in valuation.
- **Durables Decline**: 16% of Pet sales, with double-digit Q4 decline driven by SKU rationalization, expected to stabilize in H2 2026.

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

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

CENT

CENT fundamentals

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