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Investing.com - Central Garden & Pet Co. (NASDAQ:CENT) has raised its fiscal year 2025 adjusted earnings per share guidance to approximately $2.60, up from its previous forecast of $2.20 or better, the company announced Monday.
The new guidance exceeds analyst expectations, as consensus estimates had projected $2.43 per share. Canaccord Genuity maintained its Buy rating and $45.00 price target on the stock following the announcement. The stock has shown strong momentum, gaining over 12% in the past week, with InvestingPro analysis indicating the company is currently trading below its Fair Value.
Central Garden & Pet attributed the improved outlook to margin expansion driven by its Cost and Simplicity (NASDAQ:SMPL) initiatives and a favorable product mix. CEO Niko Lahanas noted that the fourth quarter remains seasonally small and the operating environment continues to be dynamic, with some uncertainty around consumer demand still factored into the revised guidance.
The company reaffirmed its capital expenditure plans of approximately $60 million for fiscal year 2025. These investments will target productivity initiatives and essential maintenance across both the Garden and Pet segments.
Central Garden & Pet previously demonstrated margin improvements with its second-quarter results, with Canaccord Genuity viewing this guidance raise as further evidence that the company’s internal initiatives are proving effective.
In other recent news, Central Garden & Pet Company reported its financial results for the second quarter of 2025, surpassing earnings expectations despite a decline in revenue. The company achieved an earnings per share (EPS) of $1.04, exceeding the forecast of $0.92, while revenue fell short of expectations, coming in at $834 million compared to the anticipated $878.75 million. The company’s performance was affected by a 7% year-over-year decline in net sales, attributed to a delayed spring garden selling season. Despite the revenue shortfall, Central Garden & Pet expanded its gross margin by 180 basis points to 32.8%, aided by cost efficiency and operational improvements. The pet segment showed robust e-commerce growth, with online sales representing 27% of Pet sales. The company also highlighted record sales in its Wild Bird business. Additionally, Central Garden & Pet reaffirmed its fiscal 2025 non-GAAP EPS guidance of $2.20 or higher, expressing cautious optimism about the remainder of the garden season.
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