Central Garden & Pet Company Reports 3.5% Increase in Net Sales for Q1 Fiscal 2025

Central Garden & Pet Company reported a 3.5% increase in net sales for the first quarter of fiscal 2025, reaching $656.4 million compared to $634.5 million in the same period last year. The Pet segment contributed significantly to this growth, with sales rising by 4.5% to $427.5 million, driven primarily by increased demand for dog and cat treats and toys. The Garden segment also saw a modest increase of 1.6%, totaling $228.9 million, aided by favorable weather conditions that supported sales in the control and fertilizer categories.

The company's gross profit for the quarter improved by 9.4% to $195.7 million, resulting in a gross margin of 29.8%, up from 28.2% in the prior year. This increase was attributed to higher sales volumes and productivity gains from the company's cost and simplicity initiatives, which included consolidating facilities and exiting lower-margin businesses. Operating income surged to $28.0 million, a significant increase from $8.4 million in the previous year, reflecting a combination of increased sales and reduced selling, general, and administrative expenses, which fell to $167.7 million.

Central Garden & Pet's net income for the quarter was $14.0 million, or $0.21 per diluted share, compared to $0.4 million, or $0.01 per diluted share, in the same quarter last year. The improvement in net income was driven by higher operating income and a decrease in net interest expense, which fell to $7.7 million from $9.7 million. The company reported a total debt of $1.19 billion as of December 28, 2024, consistent with the previous year, and maintained compliance with all financial covenants under its credit facilities.

In terms of strategic developments, Central Garden & Pet completed the acquisition of TDBBS, LLC, a provider of premium natural dog chews and treats, for approximately $60 million. This acquisition is expected to enhance the company's product offerings and eCommerce capabilities. The company also continued its stock repurchase program, buying back approximately 1.7 million shares during the quarter, reflecting its commitment to returning value to shareholders.

Looking ahead, Central Garden & Pet anticipates continued growth driven by its strong product portfolio and strategic initiatives. The company expects to maintain its focus on operational efficiency and market expansion, particularly in the pet and garden segments, while navigating potential challenges such as economic uncertainty and fluctuating consumer demand.