Central Garden & Pet Announces Q1 Fiscal 2026 Financial Results

WALNUT CREEK, Calif.--( BUSINESS WIRE)--Central Garden & Pet Company (NASDAQ: CENT) (NASDAQ: CENTA) (“Central”), a leading consumer goods company in the pet and garden industries, today announced financial results for its fiscal 2026 first quarter ended December 27, 2025.

We delivered a solid start to the fiscal year, with disciplined execution across the business, particularly when measured against a strong prior-year first quarter,” said Niko Lahanas, CEO of Central Garden & Pet.

“We delivered a solid start to the fiscal year, with disciplined execution across the business, particularly when measured against a strong prior-year first quarter,” said Niko Lahanas, CEO of Central Garden & Pet. “First quarter results also reflected shipment timing, with volumes shifting into the second quarter. With Cost and Simplicity firmly embedded in our operations, we are sharpening our focus on growth and innovation across the portfolio, recognizing that results will build over time. We remain encouraged by the momentum in the business and confident in our outlook for the year as we advance our Central to Home strategy.”

Fiscal 2026 First Quarter Financial Results

(All comparisons versus Q1 FY 2025)

Net sales were $617 million compared with $656 million.

Gross margin expanded by 110 basis points to 30.9%, compared with 29.8% driven by improved productivity. Non-GAAP gross margin was 30.8%.

Operating income totaled $17 million, compared with $28 million. Non-GAAP operating income was $24 million. Operating margin moved to 2.7% from 4.3%, while non-GAAP operating margin was 3.9%.

Other income was $0.2 million, compared with other expense of $2 million.

Net interest expense of $8 million was fairly consistent with the prior year.

Net income was $7 million compared with $14 million. Non-GAAP net income was $13 million. GAAP diluted earnings per share were $0.11 compared with $0.21, while non-GAAP diluted earnings per share were $0.21.

Adjusted EBITDA was $50 million compared with $55 million.

Pet Segment First Quarter Fiscal 2026 Results

(All comparisons versus Q1 FY 2025)

Net sales in the Pet segment were $416 million compared with $427 million, primarily reflecting portfolio optimization efforts, including the rationalization of lower-margin categories and the closure of Central's U.K. operations, as well as shipment timing.

Operating income was $50 million compared with $51 million. Non-GAAP operating income was also $50 million. Operating margin was 12.0%, in line with the prior year, and non-GAAP operating margin was 12.1%.

Adjusted EBITDA was $60 million compared with $61 million.

Garden Segment First Quarter Fiscal 2026 Results

(All comparisons versus Q1 FY 2025)

Net sales in the Garden segment were $202 million, compared with $229 million, reflecting shipment timing, with volumes shifting into the second quarter, and portfolio optimization efforts, including the rationalization of select Live Plants categories.

Operating loss was $10 million, compared with operating income of $2 million, and non-GAAP operating loss was $2 million. Operating margin moved to (4.8)% from 1.1%, while non-GAAP operating margin was (1.2)%.

Adjusted EBITDA was $8 million compared with $14 million.

Liquidity and Debt

(All comparisons versus Q1 FY 2025)

Cash and cash equivalents at December 27, 2025, totaled $721 million, compared with $618 million.

Cash used by operations was $70 million, compared with $69 million.

Total debt was $1.2 billion, consistent with the prior year. Gross leverage, calculated using the definitions for Indebtedness and EBITDA in Central's credit agreement, ended the first quarter at 2.9x, consistent with the prior year and below the target range of 3.0 to 3.5x. Central had no borrowings outstanding under its credit facility at quarter end.

Central repurchased 660,000 shares for $18.5 million during the quarter. As of December 27, 2025, $28 million remained available for future stock repurchases.

Cost and Simplicity Agenda

Central made further progress in its multi-year Cost and Simplicity agenda, a broad-based effort spanning sourcing, manufacturing, distribution, portfolio optimization, and overhead efficiency. These actions are streamlining operations, reducing complexity, and driving margin improvement across the organization.

During the quarter, non-GAAP adjustments totaled $8 million, primarily related to facility closures in the Garden segment, with costs largely associated with lease exit and severance expenses.

Fiscal 2026 Guidance

Central continues to expect fiscal 2026 non-GAAP diluted EPS of $2.70 or better, reflecting continued margin discipline, cost efficiency initiatives, and portfolio optimization.

The outlook incorporates current assumptions regarding a competitive and promotional retail environment, value-oriented consumer behavior, current tariffs, and inflation in select commodity categories, within a dynamic macroeconomic and geopolitical environment.

Capital expenditures are projected to be approximately $50 million to $60 million, focused on maintenance, productivity initiatives, and targeted growth investments across both segments.

This outlook excludes any potential impacts from acquisitions, divestitures, or restructuring activities that may occur during fiscal 2026, including projects under Central's Cost and Simplicity agenda.

Conference Call

Central will hold a conference call today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time), hosted by CEO Niko Lahanas and CFO Brad Smith, to discuss these results and to provide a general business update. The conference call and related materials can be accessed at http://ir.central.com.

Alternatively, to listen to the call by telephone, dial (201) 689-8345 (domestic and international) using confirmation #13757410.

About Central Garden & Pet

Central Garden & Pet Company (NASDAQ: CENT) (NASDAQ: CENTA) is a leading consumer goods company in the pet and garden industries. Guided by the belief that home is central to life, the company's purpose is to proudly nurture happy and healthy homes. For over 45 years, its innovative and trusted solutions have helped lawns grow greener, gardens bloom bigger, pets live healthier, and communities grow stronger. Central is home to a diversified portfolio of market-leading brands including Amdro ®, Aqueon ®, Best Bully Sticks ®, Cadet ®, C&S ®, Farnam ®, Ferry-Morse ®, Kaytee ®, Nylabone ®, Pennington ®, Sevin ® and Zoёcon ®. With fiscal 2025 net sales of $3.1 billion, the company has strong manufacturing and logistics capabilities supported by a passionate, entrepreneurial growth culture that incorporates sustainability. Central is headquartered in Walnut Creek, California, and employs more than 6,000 people, primarily across North America. Visit www.central.com to learn more.

Safe Harbor Statement

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this release which are not historical facts, including statements concerning evolving consumer demand and unfavorable retailer dynamics, productivity initiatives, estimated capital spending, and earnings guidance for fiscal 2026, are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. All forward-looking statements are based upon Central's current expectations and various assumptions. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements contained in this release including, but not limited to, the following factors:

These and other risks are described in greater detail in Central’s Annual Report on Form 10-K for the fiscal year ended September 27, 2025, filed with the Securities and Exchange Commission on November 26, 2025. Central has not filed its Form 10-Q for the fiscal quarter ended December 27, 2025. As a result, all financial results described here should be considered preliminary, and are subject to change to reflect any necessary adjustments or changes in accounting estimates that are identified prior to the time the Company files the Form 10-Q. Central assumes no obligation to publicly update these forward-looking statements to reflect new information, future events, or any other development.

CENTRAL GARDEN & PET COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts, unaudited)

December 27, 2025

December 28, 2024

September 27, 2025

ASSETS

Current assets:

Cash and cash equivalents

721,150

618,020

882,488

Restricted cash

16,090

14,649

15,945

Accounts receivable (less allowance for credit losses and customer allowances of $8,328, $5,996 and $8,011)

357,803

399,443

325,297

Inventories, net

836,270

815,782

722,106

Prepaid expenses and other

34,381

39,919

30,294

Total current assets

1,965,694

1,887,813

1,976,130

Plant, property and equipment, net

359,004

370,673

363,188

Goodwill

554,692

551,361

554,692

Other intangible assets, net

441,270

465,914

447,643

Operating lease right-of-use assets

204,503

195,775

222,863

Other assets

118,264

64,319

61,127

Total

3,643,427

3,535,855

3,625,643

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable

263,587

221,903

234,618

Accrued expenses

257,497

262,952

247,213

Current lease liabilities

52,850

58,623

56,865

Current portion of long-term debt

173

Total current liabilities

573,995

543,651

538,758

Long-term debt

1,192,092

1,190,271

1,191,641

Long-term lease liabilities

181,056

163,271

191,739

Deferred income taxes and other long-term obligations

120,324

118,831

118,572

Equity:

Common stock ($0.01 par value; 9,650,221, 10,718,231, 9,650,221 outstanding at December 27, 2025, December 28, 2024 and September 27, 2025, respectively)

107

Class A common stock ($0.01 par value: 51,005,497, 53,128,604 and 51,618,682 shares outstanding at December 27, 2025, December 28, 2024 and September 27, 2025, respectively)

510

531

516

Class B stock ($0.01 par value: 1,602,374 shares outstanding at December 27, 2025, December 28, 2024 and September 27, 2025)

Additional paid-in capital

568,702

586,777

571,392

Retained earnings

1,009,448

936,344

1,015,096

Accumulated other comprehensive loss

(3,357

)

(4,661

)

(3,849

)

Total Central Garden & Pet Company shareholders’ equity

1,575,416

1,519,114

1,583,268

Noncontrolling interest

544

717

1,665

Total equity

1,575,960

1,519,831

1,584,933

Total

3,643,427

3,535,855

3,625,643

CENTRAL GARDEN & PET COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts, unaudited)

Three Months Ended

December 27, 2025

December 28, 2024

Net sales

617,373

656,436

Cost of goods sold

426,765

460,737

Gross profit

190,608

195,699

Selling, general and administrative expenses

174,075

167,707

Operating income

16,533

27,992

Interest expense

(14,511

)

(14,470

)

Interest income

6,744

6,740

Other income (expense)

182

(1,717

)

Income before income taxes and noncontrolling interest

8,948

18,545

Income tax expense

2,089

4,364

Income including noncontrolling interest

6,859

14,181

Net income attributable to noncontrolling interest

172

Net income attributable to Central Garden & Pet Company

6,841

14,009

Net income per share attributable to Central Garden & Pet Company:

Basic

0.11

0.22

Diluted

0.11

0.21

Weighted average shares used in the computation of net income per share:

Basic

61,409

64,552

Diluted

62,064

65,449

CENTRAL GARDEN & PET COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

Three Months Ended

December 27, 2025

December 28, 2024

Cash flows from operating activities:

Net income

6,859

14,181

Adjustments to reconcile net income to net cash used by operating activities:

Depreciation and amortization

20,659

21,934

Amortization of deferred financing costs

635

673

Non-cash lease expense

15,223

15,131

Stock-based compensation

4,825

5,510

Deferred income taxes

1,796

1,276

Other operating activities

3,968

(600

)

Change in assets and liabilities (excluding businesses acquired):

Accounts receivable

(32,288

)

(73,439

)

Inventories

(113,016

)

(59,356

)

Prepaid expenses and other assets

(3,371

)

(7,522

)

Accounts payable

29,632

10,342

Accrued expenses

10,108

17,450

Other long-term obligations

(61

)

(73

)

Operating lease liabilities

(15,191

)

(14,339

)

Net cash used in operating activities

(70,222

)

(68,832

)

Cash flows from investing activities:

Additions to plant, property and equipment

(10,812

)

(6,100

)

Payments to acquire companies, net of cash acquired

(57,000

)

(3,318

)

Net cash used in investing activities

(67,812

)

(9,418

)

Cash flows from financing activities:

Repayments of long-term debt

(14

)

(78

)

Repurchase of common stock, including shares surrendered for tax withholding

(20,011

)

(54,022

)

Distribution to noncontrolling interest

(1,139

)

(1,346

)

Payment of financing costs

(2,329

)

—

Net cash used in financing activities

(23,493

)

(55,446

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

334

(2,038

)

Net decrease in cash, cash equivalents and restricted cash

(161,193

)

(135,734

)

Cash, cash equivalents and restricted cash at beginning of period

898,433

768,403

Cash, cash equivalents and restricted cash at end of period

737,240

632,669

Supplemental information:

Cash paid for interest

19,944

19,903

Lease liabilities arising from obtaining right-of-use assets

444

4,789

Use of Non-GAAP Financial Measures

We report our financial results in accordance with GAAP. However, to supplement the financial results prepared in accordance with GAAP, we use non-GAAP financial measures including non-GAAP net income and diluted net income per share, non-GAAP operating income, and adjusted EBITDA. Management uses these non-GAAP financial measures that exclude the impact of specific items (described below) in making financial, operating and planning decisions and in evaluating our performance. Also, Management believes that these non-GAAP financial measures may be useful to investors in their assessment of our ongoing operating performance and provide additional meaningful comparisons between current results and results in prior operating periods. While Management believes that non-GAAP measures are useful supplemental information, such adjusted results are not intended to replace our GAAP financial results and should be read in conjunction with those GAAP results.

Adjusted EBITDA is defined by us as income before income tax, net other expense, net interest expense and depreciation and amortization and stock-based compensation expense (or operating income plus depreciation and amortization expense and stock-based compensation expense). Adjusted EBITDA further excludes charges related to facility closures. We present adjusted EBITDA because we believe that adjusted EBITDA is a useful supplemental measure in evaluating the cash flows and performance of our business and provides greater transparency into our results of operations. Adjusted EBITDA is used by our management to perform such evaluations. Adjusted EBITDA should not be considered in isolation or as a substitute for cash flow from operations, income from operations or other income statement measures prepared in accordance with GAAP. We believe that adjusted EBITDA is frequently used by investors, securities analysts and other interested parties in their evaluation of companies, many of which present adjusted EBITDA when reporting their results. Other companies may calculate adjusted EBITDA differently and it may not be comparable.

The reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are shown in the tables below.

Non-GAAP financial measures reflect adjustments based on the following items:

From time to time in the future, there may be other items that we may exclude if we believe that doing so is consistent with the goal of providing useful supplemental information to investors and management.

We have not provided a reconciliation of non-GAAP measures to the corresponding GAAP measures on a forward-looking basis as we cannot do so without unreasonable efforts due to the potential variability and limited visibility of excluded items; these excluded items may include facility closures and exit costs, impairment charges and restructuring costs, among others.

Net Income and Diluted Net Income Per Share

GAAP to Non-GAAP Reconciliation

Three Months Ended

December 27, 2025

December 28, 2024

(in thousands, except per share amounts)

GAAP net income attributable to Central Garden & Pet Company

6,841

14,009

Facility closures

)

7,746

—

Tax effect of adjustments

(1,808

)

—

Non-GAAP net income attributable to Central Garden & Pet Company

12,779

14,009

GAAP diluted net income per share

0.11

0.21

Non-GAAP diluted net income per share

0.21

Shares used in GAAP and non-GAAP diluted net earnings per share calculation

62,064

65,449

Operating Income

GAAP to Non-GAAP Reconciliation

Three Months Ended December 27, 2025

GAAP

Non-GAAP adjustments (1)

Non-GAAP

(in thousands)

Net sales

617,373

—

617,373

Cost of goods sold

426,765

(601

)

427,366

Gross profit

190,608

601

190,007

Selling, general and administrative expenses

174,075

8,347

165,728

Income from operations

16,533

(7,746

)

24,279

Gross margin

30.9

30.8

Operating margin

2.7

3.9

Pet Segment Operating Income

GAAP to Non-GAAP Reconciliation

Three Months Ended

December 27, 2025

December 28, 2024

(in thousands)

GAAP operating income

49,800

51,257

Facility closures

)

506

—

Non-GAAP operating income

50,306

51,257

GAAP operating margin

12.0

Non-GAAP operating margin

12.1

12.0

Garden Segment Operating Income

GAAP to Non-GAAP Reconciliation

Three Months Ended

December 27, 2025

December 28, 2024

(in thousands)

GAAP operating (loss) income

(9,679

)

2,423

Facility closures

)

7,240

—

Non-GAAP operating (loss) income

(2,439

)

2,423

GAAP operating margin

(4.8

1.1

Non-GAAP operating margin

(1.2

1.1

Adjusted EBITDA

GAAP to Non-GAAP Reconciliation

Three Months Ended December 27, 2025

Pet

Garden

Corporate

Total

(in thousands)

Net income attributable to Central Garden & Pet Company

—

6,841

Interest expense, net

—

7,767

Other income

—

(182

)

Income tax expense

—

2,089

Net income attributable to noncontrolling interest

—

Income (loss) from operations

49,800

(9,679

)

(23,588

)

16,533

Depreciation & amortization

10,137

10,274

248

20,659

Noncash stock-based compensation

—

4,825

Facility closures

)

506

7,240

—

7,746

Adjusted EBITDA

60,443

7,835

(18,515

)

49,763

Adjusted EBITDA

GAAP to Non-GAAP Reconciliation

Three Months Ended December 28, 2024

Pet

Garden

Corporate

Total

(in thousands)

Net income attributable to Central Garden & Pet Company

—

14,009

Interest expense, net

—

7,730

Other expense

—

1,717

Income tax expense

—

4,364

Net income attributable to noncontrolling interest

—

172

Income (loss) from operations

51,257

2,423

(25,688

)

27,992

Depreciation & amortization

10,080

11,131

723

21,934

Noncash stock-based compensation

—

5,510

Adjusted EBITDA

61,337

13,554

(19,455

)

55,436