Aug 5, 2026, 4:15 PM ETConsumer Defensive

Central Garden & Pet — Q3 Fiscal 2026 Earnings Summary

CENTCENTRAL GARDEN & PET CO

Financial Performance

Net sales for Q3 fiscal 2026 were $882 million, a decrease of 8% compared to $961 million in Q3 fiscal 2025; organic net sales were $862 million, an increase of 2% year-over-year.
Gross profit was $317 million, a 5% decrease from the prior year, with gross margin expanding 130 basis points to 35.9% from 34.6%.
Operating income was $126 million, a 7% decrease from the prior year, with operating margin expanding 20 basis points to 14.3% from 14.1%; non-GAAP operating income was $136 million, a 2% decrease, with non-GAAP operating margin expanding 90 basis points to 15.4% from 14.5%.
Net income was $90 million, a 5% decrease from $95 million in the prior year, resulting in GAAP diluted EPS of $1.45 versus $1.52; non-GAAP net income was $96 million, a 2% decrease, resulting in non-GAAP diluted EPS of $1.54 versus $1.56.
Adjusted EBITDA was $162 million, a $5 million decrease from the prior year, with margin expanding 100 basis points to 18.3% from 17.3%.
Cash provided by operations was $327 million compared to $265 million in the prior year.
Cash and cash equivalents totaled $997 million at June 27, 2026, compared to $713 million in the prior year.
Total debt was $1.2 billion, consistent with the prior year; gross leverage was 2.8x compared to 2.9x, and net leverage was 0.5x.
$128 million remained available for future stock repurchases as of June 27, 2026.

Fiscal 2026 non-GAAP diluted EPS outlook raised from $2.70 or better to $2.85 or better.
Capital expenditures for fiscal 2026 are projected to be approximately $50 million, focused on maintenance, productivity initiatives, and targeted growth investments.
The outlook assumes a competitive and promotional retail environment, a value-oriented consumer, existing tariffs, and inflation in select commodities, while assuming continued stability across key commodities.
The outlook excludes potential impacts from further acquisitions, divestitures, restructuring activities under the Cost and Simplicity agenda, and further tariff refunds.

Pet Segment: Net sales were $400 million, a 19% decrease from $493 million, reflecting the exit of the pet distribution business; organic net sales were $380 million, an increase of 2%. Non-GAAP operating income was $76 million, a 2% decrease, with non-GAAP operating margin expanding 320 basis points to 19.0% from 15.8%. Adjusted EBITDA was $86 million, a $2 million decrease, with margin expanding 350 basis points to 21.4% from 17.9%.
Garden Segment: Net sales were $482 million, a 3% increase from $468 million, driven by Wild Bird, Fertilizer and Controls, and Grass Seeds. Non-GAAP operating income was $91 million, a 7% increase, with non-GAAP operating margin expanding 70 basis points to 18.9% from 18.2%. Adjusted EBITDA was $101 million, a $5 million increase, with margin expanding 50 basis points to 20.9% from 20.4%.

The company is entering a definitive agreement to acquire an 80% interest in TRIXIE, the leading European pet supplies and pet snacks company, to create the leading global player in pet supplies.
TRIXIE serves over 30,000 pet retail stores internationally, with approximately 90% of its portfolio being own-brand.
The transaction aims to establish a scaled platform to consolidate the fragmented European pet specialty market.
The acquisition is expected to increase the company's net sales generated outside the United States to approximately 10%.

Risks include economic uncertainty, inflationary pressure, potential tariffs or trade wars, and international sourcing risks.
Specific risks relate to the TRIXIE transaction, including the failure to obtain regulatory approvals, closing conditions, timely integration, and realization of benefits.
Other risks include fluctuations in energy and petrochemical costs, declines in consumer spending, adverse weather conditions, and supply shortages in pet birds, small animals, and fish.
Risks also encompass dependence on a small number of customers, retail industry consolidation, and potential credit risk associated with brick-and-mortar retailers.

CEO Niko Lahanas stated that third-quarter results showed continued strength with improvements in organic sales and margins, reflecting sharp execution and favorable margins due to the exit of the pet distribution business.
Management noted entering the final phase of the garden season and cited the strength seen across the business as the reason for raising the fiscal year outlook.
The tone is confident regarding margin discipline, ongoing investment in growth initiatives, and portfolio optimization.

Central entered into a definitive agreement to acquire an 80% interest in TRIXIE Heimtierbedarf GmbH & Co. KG for €340 million in cash at closing plus up to €60 million in additional earn-out payments, for a total consideration of up to €400 million.
Members of TRIXIE's leadership team will retain a minority stake and continue in key roles.
The TRIXIE transaction is expected to close in the first half of fiscal 2027.
The company exited the pet distribution business earlier in the fiscal year, which contributed to the decrease in reported net sales but improved organic growth and margins.
The company reported a gain of $2.5 million in Other Income from the contribution of its pet distribution business to the formation of a new partnership.
Fiscal 2025 net sales were $3.1 billion, and the company employs more than 6,000 people.