Central Garden & Pet Q2 2025 slides: Sales decline while profitability improves

Central Garden & Pet Company (NASDAQ:CENT) presented its second-quarter 2025 financial results on May 7, showing declining sales across both business segments while maintaining or improving profitability metrics through cost management initiatives and e-commerce growth.

Quarterly Performance Highlights

Central reported Q2 net sales of $834 million, representing a 7% decrease compared to the same period last year. Despite the revenue decline, the company delivered non-GAAP operating income of $99 million, in line with the previous year, and non-GAAP earnings per share of $1.04, a $0.05 improvement year-over-year.

The company’s ability to maintain profitability despite sales challenges reflects its ongoing Cost & Simplicity (NASDAQ:SMPL) program, which has enhanced operational efficiency. This performance aligns with Central’s fiscal 2024 results, where the company similarly navigated revenue declines while improving bottom-line metrics.

Segment Performance

In the Pet segment, Central reported net sales of $454 million, down 6% compared to the previous year. However, non-GAAP operating income for the segment increased by 5% to $66 million, demonstrating improved operational efficiency despite lower volumes. This segment continues to face headwinds from the previously reported decrease in household pet ownership, which has affected the broader pet industry.

The Garden segment experienced a more pronounced sales decline of 10%, with revenue of $380 million. Despite this challenge, operating income for the segment increased by 3% to $59 million. The segment’s performance reflects the company’s ability to maintain profitability through cost management despite revenue pressures.

Central highlighted that it maintained market share in both pet and garden segments, with gains across several key categories including Dog Chews, Rawhide, Wild Bird, and Grass Seed. The Wild Bird category was specifically noted for achieving record sales and online share leadership.

Strategic Initiatives

Central’s presentation emphasized several strategic initiatives that supported its Q2 performance. The company opened a new direct-to-consumer enabled Dog & Cat distribution center in New Jersey, expanding its fulfillment capabilities for the growing e-commerce channel.

E-commerce growth continues to be a bright spot for Central, fueled by centralized retail media efforts, new product introductions, and improved content. This aligns with the company’s previous fiscal year results, where e-commerce represented 29% of total pet sales and showed double-digit growth in the garden segment.

The ongoing Cost & Simplicity program remains a key focus, with the company continuing to enhance efficiency across operations. In the previous fiscal year, Central had completed 11 facility closures with minimal disruption, and this operational streamlining appears to be continuing into fiscal 2025.

Forward-Looking Context

Central’s Q2 results should be viewed in the context of its previously stated expectations for fiscal 2025. The company had guided for non-GAAP EPS of $2.20 or higher for the full fiscal year, and the Q2 performance of $1.04 per share appears to keep the company on track toward that target.

The company had anticipated a challenging external environment for fiscal 2025, with continued consumer value-seeking behavior and a cautious outlook on the pricing and promotional landscape. The Q2 results reflect these challenges in the form of revenue declines, but Central’s ability to maintain profitability suggests its strategic initiatives are effectively mitigating these headwinds.

Central’s stock closed at $34.55 on May 7, near the lower end of its 52-week range of $32.16 to $47.48. The stock showed minimal movement in after-hours trading, suggesting investors had largely anticipated the mixed results.

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