Central Garden & Pet Company reported full‑year 2025 revenue of $3.10 billion, a 2% decline from $3.20 billion in 2024, while fourth‑quarter net sales rose 1% to $678 million from $669 million a year earlier. GAAP earnings per share reached $2.55, up from $1.62, and non‑GAAP EPS climbed to $2.73 from $2.13. Gross margin expanded to 31.9%, a 240‑basis‑point gain driven by the company’s Cost and Simplicity program and a favorable mix shift toward higher‑margin pet consumables. Operating income for the year was $250 million, and non‑GAAP operating income was $265 million. Cash and cash equivalents stood at $882 million, and the net leverage ratio was 0.8×, well below the target range of 3.0–3.5×.
The fourth‑quarter results beat expectations on both revenue and earnings. Revenue of $678 million exceeded analyst estimates of $666 million by $12 million, while non‑GAAP EPS of $-0.09 surpassed the consensus estimate of $-0.20 by $0.11. Gross margin in the quarter rose to 29.0%, a 380‑basis‑point improvement over the prior year, largely due to cost controls, higher pricing power in the pet consumables segment, and the continued execution of the Cost and Simplicity agenda.
Segment performance highlighted a 2% decline in Pet segment sales, largely attributable to the closure of UK operations, and a 3% decline in Garden segment sales. However, garden sales in the quarter grew 1% driven by strong consumer demand and an extended selling season. The mix shift toward higher‑margin pet consumables helped offset the decline in the pet segment and contributed to the overall margin expansion.
Management reiterated its fiscal 2026 non‑GAAP EPS guidance of $2.70 or better, signaling confidence in sustained margin discipline and continued investment in e‑commerce and product innovation. The company did not repurchase shares in the quarter, leaving $46.5 million available for future buybacks. The guidance reflects expectations of stable revenue growth and ongoing cost‑control initiatives.
Investors responded with a muted reaction, reflecting concerns about the modest sales decline and macro‑economic headwinds, despite the earnings beat. The market’s tempered response underscores the importance of balancing top‑line growth with margin expansion in the current environment.
"This was a record year on the bottom line, marked by continued margin expansion and disciplined execution of our Cost and Simplicity agenda," said CEO Niko Lahanas. He added that the company’s record cash position provides flexibility to invest in the business and return value to shareholders while navigating a dynamic macro backdrop.
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