Central Garden & Pet Announces Record Q2 Fiscal 2026 Financial Results

Reports fiscal 2026 Q2 net sales of $906 million, compared with $834 million a year ago

Delivers fiscal 2026 Q2 GAAP diluted EPS of $1.28, compared with $0.98 in the prior year

Reaffirms fiscal 2026 outlook for non-GAAP diluted EPS of $2.70 or better

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 second quarter ended March 28, 2026.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20260506775709/en/

"We continued to build on our solid start to the year, ending the quarter with higher sales, expanded operating margins, and increased earnings per share versus last year, driven by consistent execution and improving performance across the organization," said Niko Lahanas, CEO of Central Garden & Pet. "Following the quarter, we entered into a pet distribution partnership with Phillips, which allows us to simplify our business and strengthen our focus on our branded portfolio. While much of the garden season remains ahead of us and the macroeconomic and geopolitical environment continues to evolve, we are reaffirming our fiscal year outlook. We expect the distribution partnership to have a minimal impact on earnings per share."

Fiscal 2026 Second Quarter Financial Results

(All comparisons versus Q2 FY 2025)

Net sales were $906 million, compared with $834 million.

Gross margin expanded by 30 basis points to 33.1%, compared with 32.8%.

Operating income totaled $114 million, compared with $93 million. Operating margin was 12.6%, compared with 11.2%.

Other expense was $351 thousand, compared with other income of $744 thousand.

Net interest expense of $9 million was consistent with the prior year.

Net income was $79 million, compared with $64 million. Diluted earnings per share (EPS) were $1.28, compared with $0.98.

Adjusted EBITDA was $139 million, compared with $123 million. Adjusted EBITDA margin was 15.4%, compared with 14.8%.

Pet Segment Second Quarter Fiscal 2026 Results

(All comparisons versus Q2 FY 2025)

Net sales in the Pet segment were $477 million, compared with $454 million, primarily driven by continued strength in Dog & Cat and Animal Health, as well as Outdoor Cushions shipments shifting from the first quarter into the second.

Operating income was $78 million, compared with $61 million. Operating margin was 16.3%, compared with 13.4%.

Adjusted EBITDA was $89 million, compared with $75 million. Adjusted EBITDA margin was 18.6%, compared with 16.6%.

Garden Segment Second Quarter Fiscal 2026 Results

(All comparisons versus Q2 FY 2025)

Net sales in the Garden segment were $429 million, compared with $380 million, primarily driven by shipments shifting from the first quarter into the second, and new listings in Grass and Fertilizer.

Operating income was $66 million, compared with $59 million. Operating margin was 15.4%, compared with 15.5%.

Adjusted EBITDA was $76 million, compared with $69 million. Adjusted EBITDA margin was 17.7%, compared with 18.2%.

Liquidity and Debt

(All comparisons versus Q2 FY 2025)

Cash used in operations was $50 million, compared with $47 million, primarily reflecting seasonal working capital timing.

Central repurchased 110 thousand shares for $3.4 million during the quarter. As of March 28, 2026, $128 million remained available for future stock repurchases.

Cash and cash equivalents at March 28, 2026, totaled $653 million, compared with $517 million.

Total debt was $1.2 billion, consistent with the prior year period, with strong liquidity supporting continued investment capacity and financial flexibility.

Gross leverage, calculated using the definitions for Indebtedness and EBITDA in Central's credit agreement, ended the second quarter at 2.8x, compared with 2.9x in 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.

Pet Distribution Partnership

Following the close of the quarter, Central entered into a strategic partnership with Phillips Pet Food & Supplies ("Phillips") to establish a new pet distribution business. By combining two complementary platforms, the partnership creates a stronger, more agile, and more efficient nationwide distribution network. It also simplifies Central's operating model and enables greater focus on its branded portfolio and long-term growth opportunities. Central will retain a 20% ownership stake, while Phillips and its existing investors will hold the remaining 80%, with the business operating as an independent entity under the Phillips brand.

Fiscal 2026 Guidance

Central maintains its outlook for fiscal 2026 non-GAAP diluted EPS of $2.70 or better, reflecting continued margin discipline, ongoing investment in growth initiatives, and portfolio optimization. The Company does not expect the distribution joint venture to have a significant impact on EPS.

The outlook incorporates current assumptions regarding a competitive and promotional retail environment, a value-oriented consumer, existing tariffs, and inflation in select commodities, with continued stability across key categories despite 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 further acquisitions, divestitures, or restructuring activities that may occur during the remainder of fiscal 2026, including projects under Central's Cost and Simplicity agenda, as well as any tariff refunds.

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 #13758900.

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:

• economic uncertainty and other adverse macroeconomic conditions, including a potential recession or inflationary pressure;
• impacts of further tariffs or a trade war and our ability to receive tariff refunds;
• risks associated with international sourcing;
• fluctuations in energy prices, fuel and related petrochemical costs;
• the impact of the new pet distribution partnership on our financial results and ability to distribute and promote our pet branded products;
• declines in consumer spending and the associated increased inventory risk;
• seasonality and fluctuations in our operating results and cash flow;
• adverse weather conditions and climate change;
• the success of our Central to Home strategy and our Cost and Simplicity agenda;
• fluctuations in market prices for seeds and grains and other raw materials, including the impact of significant declines in grass seed market prices on our inventory valuation;
• risks associated with new product introductions, including the risk that our new products will not produce sufficient sales to recoup our investment;
• dependence on a small number of customers for a significant portion of our business;
• consolidation trends in the retail industry;
• supply shortages in pet birds, small animals and fish;
• potential credit risk associated with certain brick and mortar retailers in the pet specialty segment;
• reductions in demand for our product categories;
• competition in our industries;
• continuing implementation of an enterprise resource planning information technology system;
• regulatory issues;
• potential environmental liabilities;
• access to and cost of additional capital;
• the impact of product recalls;
• risks associated with our acquisition strategy, including our ability to successfully integrate acquisitions and the impact of purchase accounting on our financial results;
• potential goodwill or intangible asset impairment;
• the potential for significant deficiencies or material weaknesses in internal control over financial reporting, particularly of acquired companies;
• our dependence upon our key executives;
• our ability to recruit and retain members of our management team and employees to support our businesses;
• potential costs and risks associated with actual or potential cyberattacks;
• our ability to protect our trademarks and other proprietary rights;
• litigation and product liability claims;
• the impact of new accounting regulations and the possibility our effective tax rate will increase as a result of future changes in the corporate tax rate or other tax law changes;
• potential dilution from issuance of authorized shares; and
• the voting power associated with our Class B stock.

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 March 28, 2026. 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.

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:

• Facility closures and business exit: we have excluded charges related to the closure of distribution and manufacturing facilities and our decisions to exit businesses as they represent infrequent transactions that impact the comparability between operating periods. We believe these exclusions supplement the GAAP information with a measure that may be useful to investors in assessing the sustainability of our operating performance.

• Tax impact: adjustment represents the impact of the tax effect of the pre-tax non-GAAP adjustments excluded from non-GAAP net income. The tax impact of the non-GAAP adjustments is calculated based on the consolidated effective tax rate on a GAAP basis, applied to the non-GAAP adjustments.

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.

1. During the first quarter of fiscal 2026, we recognized incremental expense of $7.7 million in the consolidated statement of operations, of which $7.2 million in our Garden segment related to the closure of three distribution centers in fiscal 2025 and 2024. During the first and second quarters of fiscal 2026, we recognized incremental expense of $0.5 million and $0.2 million, respectively, in our Pet segment related to the closure of a sales and logistics facility in Pennsylvania.

2. During the second quarter of fiscal 2025, we recognized incremental expense of $5.3 million in the consolidated statement of operations, related to the decision to wind-down our operations in the U.K. and the related facility there as we move to a direct-export model.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260506775709/en/

Investor & Media Contact

Friederike Edelmann

VP, Investor Relations & Corporate Sustainability

(925) 412-6726

fedelmann@central.com