Central Garden & Pet Company

What they do

Central Garden & Pet operates through two reportable segments: Pet and Garden. The Pet segment sells dog and cat supplies, aquatics, small animal, reptile and bird products, plus equine and livestock items, under brands like Aqueon, Nylabone, Kaytee, and Four Paws. The Garden segment offers grass seed, wild bird feed, herbicides, fertilizers, and live plants under brands like Pennington, Amdro, and Ferry-Morse.

Revenue drivers

• Pet segment — Fiscal 2025 net sales approximately $1.8 billion, roughly 57% of consolidated net sales. Includes treats, toys, aquatics, and small animal supplies. Q3 FY26 net sales $400 million, down 19% due to pet distribution exit, but organic sales up 2%.
• Garden segment — Fiscal 2025 net sales approximately $1.3 billion. Includes grass seed, wild bird feed, fertilizers, and controls. Q3 FY26 net sales $482 million, up 3%, driven by Wild Bird, Fertilizer, Controls, and Grass Seeds.
• Pet Distribution (divested) — Contributed to a new entity with Phillips in April 2026. Fiscal 2025 net sales were $474 million. This business is now excluded from reported sales, reducing reported revenue but improving organic margins.

Recent performance

In fiscal 2025, revenue was $3.13 billion, down from $3.20 billion in 2024, but net income rose to $162.8 million from $108.0 million. Q3 FY26 (ended June 27, 2026): net sales $882 million, down 8% year-over-year, with organic net sales up 2.4%. GAAP diluted EPS was $1.45, non-GAAP EPS $1.54. Operating income was $126 million, with operating margin expanding 20 bps to 14.3%. Cash and equivalents were $997 million at quarter end.

Strategy

Management's 'Central to Home' strategy focuses on building brands, winning with customers and channels, and fortifying the portfolio. Key actions include investing in consumer insights and digital capabilities, expanding eCommerce, and pursuing acquisitions. In FY26, the company divested its pet distribution business to Phillips, creating a standalone entity, and announced a deal to acquire 80% of TRIXIE, a European pet supplies company. The company also emphasizes product innovation and cost savings (Cost and Simplicity agenda).

Risks

• Macroeconomic and tariff risk — Inflation, high interest rates, and U.S. tariffs on imports could raise input costs and reduce consumer spending, pressuring margins if price increases aren't passed through.
• Customer concentration — A small number of retail customers account for a significant portion of sales, and retail consolidation could increase their bargaining power or lead to order reductions.
• Raw material and input costs — Fluctuations in prices for seeds, grains, petrochemicals, and energy could increase costs; notably, declines in grass seed market prices could cause inventory write-downs.
• Supply chain and integration risks — Dependence on international sourcing, potential supply shortages in live animals, and risks related to acquisition integration (like TRIXIE) could disrupt operations or fail to deliver expected benefits.

Outlook

Management raised fiscal 2026 non-GAAP diluted EPS outlook from $2.70 or better to $2.85 or better. The guidance reflects strength in the business and benefits from the pet distribution exit. The company expects continued organic growth and margin expansion. The TRIXIE acquisition, expected to close later, is planned to expand European presence and add to the portfolio.