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CLOSED · 02:35 ET
Market ClerkRecap
Thu Oct 22 · markets closed2 signals on Oct 21108 insider buys this week · $250.3MCIRO short report next: Oct 30The week ahead

CENTA

CENTRAL GARDEN & PET CO
NASDAQ · INDUSTRIALS · WHOLESALE-MISCELLANEOUS NONDURABLE GOODS
36.83
−0.27 −0.73%
USD · close Oct 21
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Work order
18
FLAG · shorts 18
Insiders, 90 days
0
no open-market filings in 90 days
Congress, 90 days
0 / 0
no disclosures naming it
Big money
0 / 15
none of the tracked funds disclose it
Calls on record
0
nobody we score has called it yet
MKT CAP $451MP/E 13.6DIV YIELD —FCF YIELD 76.63%REV TTM $3.1B −1.2%NET INCOME $166.3M +20.1%NET DEBT $196.3M52W 27.53 – 40.60SEC XBRL · TTM TO Invalid Date

How CENTA rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025
Text kept
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Dropped
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words, now 28,919

New in FY2025

  • In fiscal 2025, our consolidated net sales were $3.1 billion, of which our Pet segment, or Pet, accounted for approximately $1.8 billion and our Garden segment, or Garden, accounted for approximately $1.3 billion.
  • In fiscal 2025, our operating income was $250 million, consisting of income from our Pet segment of $216 million, income from our Garden segment of $142 million and corporate expenses of $108 million.
  • Fiscal 2025 Financial Highlights Financial summary: • Net sales for fiscal 2025 decreased $71.4 million, or 2.2%, to $3.1 billion.
  • Pet net sales decreased $30.8 million, or 1.7%, and Garden net sales decreased $40.6 million, or 3.0%. • Gross profit for fiscal 2025 increased $53.6 million, or 5.7%, to $997.3 million and gross margin increased 240 basis points in fiscal 2025 to 31.9%, from 29.5% in fiscal 2024.
  • On a non-GAAP basis, gross margin increased 210 basis points in fiscal 2025. • Our operating income increased $64.7 million, or 34.9%, to $250.0 million in fiscal 2025.
  • On a non-GAAP basis, operating income increased $42.2 million, or 19.0%, in fiscal 2025. • Net income for fiscal 2025 was $162.8 million, or $2.55 per share on a diluted basis compared to $108.0 million, or $1.62 per share on a diluted basis in fiscal 2024.
  • On a non-GAAP basis, net income in fiscal 2025 was $174.2 million, or $2.73 per share on a diluted basis compared to $142.4 million, or $2.13 per share on a diluted basis in fiscal 2024.
  • Operations In March 2025, we decided to wind-down our operations in the United Kingdom, which also served certain European markets, and move to a direct-export model.
  • During fiscal 2025, we incurred approximately $10.0 million of one-time closure costs, including $5.6 million in cost of goods sold and $4.4 million in selling, general and administrative expense.
  • The amounts were primarily related to the liquidation of inventory and receivables, severance and legal costs.
  • Facility Closures During fiscal 2025, we began the consolidation of two legacy distribution facilities in Ontario, California and Salt Lake City, Utah into a new modern facility in Salt Lake City, Utah, reflecting our ongoing network optimization initiative to achieve a simpler, more efficient distribution network.
  • As a result, we recognized $5.0 million in selling, general and administrative expense, composed primarily of charges for lease and severance costs.
  • Fiscal 2025 Stock Repurchases During fiscal 2025, we repurchased 3.2 million shares of our non-voting common stock (CENTA) and 1.4 million shares of our voting common stock (CENT) on the open market at an aggregate cost of $148.4 million.
  • As of September 27, 2025, we had $46.5 million remaining under our 2024 Repurchase Authorization.
  • Tax Reform On July 4, 2025, H.R. 1, commonly known as the “One Big Beautiful Bill Act” (the “OBBBA”), was enacted into law.
  • The OBBBA contains numerous federal tax provisions including modifications to the capitalization of research and development expenses, limitations on deductions for interest expense, and accelerated fixed asset depreciation.
  • Because the OBBBA was enacted during fiscal 2025, we have reflected the impact of the provisions that were effective during the year in our income tax provision.
  • The impact of the OBBBA on our fiscal 2025 consolidated financial statements was not material.
  • We will continue to monitor the OBBBA and any related regulatory or interpretive guidance and will update our accounting in future periods as required.
  • Results of Operations (GAAP) The following table sets forth, for the periods indicated, the relative percentages that certain income and expense items bear to net sales: Fiscal Year Ended September 27, 2025 September 28, 2024 September 30, 2023 Net sales 100.0 % 100.0 % 100.0 % Cost of goods sold and occupancy 68.1 70.5 71.4 Gross profit 31.9 29.5 28.6 Selling, general and administrative 23.9 23.7 22.2 Operating income 8.0 5.8 6.4 Interest expense, net (1.0) (1.2) (1.5) Other expense, net — (0.2) — Income taxes 1.7 1.0 1.1 Net income 5.2 % 3.4 % 3.8 % Fiscal 2025 Compared to Fiscal 2024 Net Sales Net sales for fiscal 2025 decreased $71.4 million, or 2.2%, to $3,129.1 million from $3,200.5 million in fiscal 2024.
  • Our branded product sales, which include products we produce under Central brand names and products we produce under third-party brands, decreased $30.6 million, and sales of other manufacturers’ products decreased $40.8 million.
  • In fiscal 2025, sales of branded products represented approximately 79% of our net sales, compared to 78% in fiscal 2024, and sales of other manufacturers' products represented 21% of our net sales.
  • The following table indicates each class of similar products which represented approximately 10% or more of our consolidated net sales in the fiscal years presented: Category 2025 2024 2023 (in millions) Other garden products $ 808.2 $ 832.9 $ 832.2 Other pet products 602.6 635.0 699.4 Other manufacturers' products 664.7 705.6 734.9 Dog & cat products 592.8 600.6 568.6 Wild bird 460.8 426.4 475.0 Total $ 3,129.1 $ 3,200.5 $ 3,310.1 Pet net sales decreased $30.8 million, or 1.7%, to $1,802.0 million in fiscal 2025 from $1,832.8 million in fiscal 2024.
  • The decline in Pet net sales was due primarily to lower sales of durable items impacting our outdoor cushions, pet beds and aquatics businesses.
  • Pet branded sales decreased $36.0 million, and sales of other manufacturers' products increased $5.2 million.
  • Garden net sales decreased $40.6 million, or 3.0%, to $1,327.1 million in fiscal 2025 from $1,367.7 million in fiscal 2024.
  • The decline in Garden net sales was due primarily to decreased sales of third-party products resulting from the loss of distribution of two product lines and our planned exit of the pottery business.
  • Increased sales of wild bird feed and private label products were partially offset by decreased sales in both our controls and live plants businesses due to cool and wet weather during the early part of the garden season.
  • Garden branded sales increased $5.4 million, and sales of other manufacturers' products decreased $46.0 million.
  • Gross Profit Gross profit in fiscal 2025 increased $53.6 million, or 5.7%, to $997.3 million from $943.7 million in fiscal 2024.
  • Gross margin improved 240 basis points to 31.9% in fiscal 2025 from 29.5% in fiscal 2024.
  • Pet and Garden both contributed to the increase in gross profit and gross margin.
  • Gross profit in Pet, in both fiscal 2024 and 2025, and Garden, in fiscal 2024, was impacted by facility closure projects under our Cost and Simplicity agenda.
  • On a non-GAAP basis, excluding approximately $6 million in charges associated with the facility closures in fiscal 2025 and approximately $16 million in fiscal 2024, gross profit increased $42.8 million and gross margin improved 210 basis points to 32.1% in fiscal 2025 from 30.0% in fiscal 2024.
  • The increase in gross profit and gross margin in Pet was due primarily to efficiency gains and structural improvements resulting from productivity initiatives under our Cost and Simplicity agenda and some commodity price deflation.
  • These improvements more than offset the impact of tariffs.
  • The increase in gross profit and gross margin in Garden was due primarily to improvements in our Live Goods business in fiscal 2025, from cost reduction initiatives under our Cost and Simplicity agenda and the adverse impact in fiscal 2024 from the write-down of the value of our grass seed inventory in fiscal 2024 of approximately $20 million, due to a significant decrease in the market prices of grass seed and an industry-wide over supply of grass seed.
  • Selling, General and Administrative Selling, general and administrative expenses decreased $11.0 million, or 1.5%, from $758.3 million in fiscal 2024 to $747.3 million in fiscal 2025.
  • As a percentage of net sales, selling, general and administrative expenses increased from 23.7% in fiscal 2024 to 23.9% in fiscal 2025.
  • The decrease in selling, general and administrative expense was due to $21.1 million in additional costs incurred in the prior year related to the closure of facilities in both the Pet and Garden segments and intangible asset impairments as compared to $9.4 million in additional costs in fiscal 2025 related to facility closures.

and 310 more.

Gone since FY2024

  • In fiscal 2024, our consolidated net sales were $3.2 billion, of which our Pet segment, or Pet, accounted for approximately $1.8 billion and our Garden segment, or Garden, accounted for approximately $1.4 billion.
  • In fiscal 2024, our operating income was $185 million, consisting of income from our Pet segment of $203 million, income from our Garden segment of $82 million and corporate expenses of $100 million.
  • Fiscal 2024 Financial Highlights Financial summary: • Net sales for fiscal 2024 decreased $109.6 million, or 3.3%, to $3.2 billion.
  • Organic net sales decreased 3.9% with Pet organic sales decreasing 5.9% and Garden organic sales decreasing 1.2%. • Gross profit for fiscal 2024 declined $3.1 million, or 0.3%, to $943.7 million while gross margin increased 90 basis points in fiscal 2024 to 29.5%, from 28.6% in fiscal 2023.
  • On a non-GAAP basis, gross margin increased 110 basis points in fiscal 2024. • Our operating income declined $25.3 million, or 12.0%, to $185.4 million in fiscal 2024.
  • On a non-GAAP basis, operating income declined $4.4 million in fiscal 2024. • Net income for fiscal 2024 was $108.0 million, or $1.62 per share on a diluted basis compared to $125.6 million, or $1.88 per share on a diluted basis in fiscal 2023.
  • On a non-GAAP basis, net income in fiscal 2024 was $142.4 million, or $2.13 per share on a diluted basis compared to $138.5 million, or $2.07 per share on a diluted basis in fiscal 2023.
  • Recent Developments: Cost and Simplicity program - Facility Closures and Business Exit The following activities reflect our ongoing network optimization initiative to achieve a simpler, more efficient manufacturing and distribution network.
  • In our Pet segment, during the fourth quarter of fiscal year 2024, as part of our Cost and Simplicity program we decided to close a manufacturing facility in California, which we plan to exit in June 2025, and a facility in Arizona, which we plan to exit in January 2025.
  • The associated pet bed, outdoor cushion and durable pet supply manufacturing and distribution activities will be transitioned to Central facilities in Indiana and North Carolina.
  • As a result, we incurred approximately $7.5 million of one-time costs, including $5.2 million in cost of goods sold and $2.3 million in selling, general and administrative costs, comprised of charges for facility closures, the impairment of inventory and severance, the majority of which were non-cash.
  • Additionally, related to the pet supplies business activities being transitioned, we recognized a non-cash impairment charge of $12.8 million related to the impairment of intangible assets due primarily to changing market conditions resulting from the decline in demand for durable products and increased international competition.
  • In our Garden segment, during the fourth quarter of fiscal year 2024, we recognized incremental expense of $3.9 million in selling, general and administrative expenses, related to facility closures and business exits announced in fiscal 2023 and earlier in fiscal 2024.
  • In our Garden segment, during the third quarter of fiscal year 2024, as part of our Cost and Simplicity program and in response to changing market conditions, we decided to exit the pottery business which we expect to be completed by calendar year-end 2025.
  • Additionally, we closed a live goods distribution facility in Delaware and relocated our grass seed research facility from Oregon to Texas.
  • As a result, in fiscal 2024 we incurred approximately $10.9 million of one-time costs, including $8.6 million in cost of goods sold and $2.3 million in selling, general and administrative costs, comprised of charges for the impairment of inventory and facility closures, the majority of which were non-cash.
  • In our Garden segment, during the second quarter of fiscal year 2024, as part of our Cost and Simplicity program we decided to close a manufacturing facility in California.
  • Additionally, in the second quarter, we began the Southeast consolidation of four distribution locations into one new modern facility, which we expect to be completed by calendar year-end.
  • As a result, we incurred approximately $5.3 million of one-time costs, including $2.5 million in cost of goods sold and $2.8 million in selling, general and administrative costs, comprised of charges for facility closures, severance, and impairment of inventory, the majority of which were non-cash.
  • Litigation Settlement Gain and Investment Impairment Within corporate, we recognized a gain of $3.2 million during the fourth quarter of fiscal 2024, for the settlement of litigation, which is included in selling, general and administrative expense.
  • Stock Dividend In December 2023, our Board of Directors approved a stock dividend in the form of one share of the Company's Class A Common Stock for every four outstanding shares of its Common Stock, Class A Common Stock and Class B Stock, which shares were distributed on February 8, 2024, to stockholders of record as of January 8, 2024.
  • The stock dividend did not affect the number of the Company's authorized shares and the par value of each share of stock remained unchanged.
  • Proportionate adjustments were made to the per share exercise price and/or the number of shares issuable upon the exercise or vesting of all stock options, restricted stock and performance share units outstanding at January 8, 2024, which resulted in a proportional increase in the vesting of such stock options, restricted stock and performance share units, and, in the case of stock options, a proportional decrease in the exercise price of all such stock options.
  • Unless noted, all Class A Common share and per share amounts contained in this Form 10-K have been retroactively adjusted to reflect the one-for-four stock dividend.
  • Fiscal 2024 Acquisition In November 2023, we acquired TDBBS, LLC (“TDBBS”), a provider of premium natural dog chews and treats for approximately $60 million.
  • The addition of TDBBS expands our portfolio with bully and collagen sticks, bones and jerky, adds scale to our dog and cat business and enhances our eCommerce and direct-to-consumer capabilities.
  • Fiscal 2025 Stock Repurchases Since our fiscal year ended September 28, 2024 through November 21, 2024, we repurchased 1.3 million shares of our non-voting common stock (CENTA) and 0.4 million shares of our voting common stock (CENT) on the open market at an aggregate cost of $51.7 million.
  • As of November 21, 2024, we had $30.3 million remaining under our 2019 Repurchase Authorization.
  • Results of Operations (GAAP) The following table sets forth, for the periods indicated, the relative percentages that certain income and expense items bear to net sales: Fiscal Year Ended September 28, 2024 September 30, 2023 September 24, 2022 Net sales 100.0 % 100.0 % 100.0 % Cost of goods sold and occupancy 70.5 71.4 70.3 Gross profit 29.5 28.6 29.7 Selling, general and administrative 23.7 22.2 21.9 Operating income 5.8 6.4 7.8 Interest expense, net (1.2) (1.5) (1.7) Other expense, net (0.2) — (0.1) Income taxes 1.0 1.1 1.4 Net income 3.4 % 3.8 % 4.6 % Fiscal 2024 Compared to Fiscal 2023 Net Sales Net sales for fiscal 2024 decreased $109.6 million, or 3.3%, to $3,200.5 million from $3,310.1 million in fiscal 2023.
  • Fiscal 2024 included 52 weeks while fiscal 2023 included 53 weeks.
  • Our branded product sales, which include products we produce under Central brand names and products we produce under third-party brands, decreased $80.2 million, and sales of other manufacturers’ products decreased $29.4 million.
  • Sales of branded products represented approximately 78% of our net sales in both fiscal 2024 and fiscal 2023, and sales of other manufacturers' products represented 22% of our net sales.
  • Organic net sales, which exclude net sales from the acquisition of TDBBS in November 2023 and net sales from the independent garden channel distribution business we sold in the prior fiscal year, declined $127.9 million, or 3.9%, as compared to the prior fiscal year.
  • The decline in organic net sales was due primarily to lower Pet sales.
  • The following table indicates each class of similar products which represented approximately 10% or more of our consolidated net sales in the fiscal years presented: Category 2024 2023 2022 (in millions) Other garden products $ 802.6 $ 832.2 $ 865.3 Other pet products 701.4 699.4 765.9 Other manufacturers' products 735.9 734.9 730.2 Dog & cat products 534.2 568.6 542.9 Wild bird 426.4 475.0 434.3 Total $ 3,200.5 $ 3,310.1 $ 3,338.6 Pet net sales decreased $44.4 million, or 2.4%, to $1,832.8 million in fiscal 2024 from $1,877.2 million in fiscal 2023.
  • Pet organic sales, which exclude net sales from the acquisition of TDBBS in November 2023, declined $110.8 million.
  • Fiscal 2023 included an extra week compared to fiscal 2024.
  • The decline in Pet net sales was volume-related and due primarily to lower demand for durable pet products, particularly in our outdoor cushion business, aquatics business, and pet bed business.
  • Pet branded sales decreased $45.4 million, and sales of other manufacturers' products increased $1.0 million.
  • Garden net sales decreased $65.2 million, or 4.5%, to $1,367.7 million in fiscal 2024 from $1,432.9 million in fiscal 2023.

and 383 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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