Central Garden & Pet Announces Record Q2 Fiscal 2026 Financial Results
WALNUT CREEK, Calif.--( BUSINESS WIRE)--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.
“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,” said Niko Lahanas, CEO of Central Garden & Pet.
“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:
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.
CENTRAL GARDEN & PET COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts, unaudited)
March 28, 2026
March 29, 2025
September 27, 2025
ASSETS
Current assets:
Cash and cash equivalents
$
653,242
$
516,675
$
882,488
Restricted cash
16,167
14,662
15,945
Accounts receivable (less allowance for credit losses of $7,969, $9,342 and $8,011)
603,152
578,880
325,297
Inventories, net
782,330
824,281
722,106
Prepaid expenses and other
32,832
40,755
30,294
Total current assets
2,087,723
1,975,253
1,976,130
Plant, property and equipment, net
354,393
368,468
363,188
Goodwill
554,692
554,692
554,692
Other intangible assets, net
434,953
461,657
447,643
Operating lease right-of-use assets
198,742
208,863
222,863
Other assets
115,025
60,684
61,127
Total
$
3,745,528
$
3,629,617
$
3,625,643
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
276,402
$
263,712
$
234,618
Accrued expenses
277,154
275,374
247,213
Current lease liabilities
51,551
58,443
56,865
Current portion of long-term debt
55
122
62
Total current liabilities
605,162
597,651
538,758
Long-term debt
1,192,545
1,190,724
1,191,641
Long-term lease liabilities
174,320
175,581
191,739
Deferred income taxes and other long-term obligations
121,160
122,257
118,572
Equity:
Common stock ($0.01 par value; 9,650,221, 10,218,481 and 9,650,221 shares outstanding at March 28, 2026, March 29, 2025 and September 27, 2025, respectively)
97
102
97
Class A common stock ($0.01 par value: 51,236,225, 52,615,383 and 51,618,682 shares outstanding at March 28, 2026, March 29, 2025 and September 27, 2025, respectively)
512
526
516
Class B stock ($0.01 par value: 1,602,374 shares outstanding at March 28, 2026, March 29, 2025 and September 27, 2025)
16
16
16
Additional paid-in capital
567,887
575,769
571,392
Retained earnings
1,086,450
969,715
1,015,096
Accumulated other comprehensive loss
(3,716
)
(4,615
)
(3,849
)
Total Central Garden & Pet Company shareholders’ equity
1,651,246
1,541,513
1,583,268
Noncontrolling interest
1,095
1,891
1,665
Total equity
1,652,341
1,543,404
1,584,933
Total
$
3,745,528
$
3,629,617
$
3,625,643
CENTRAL GARDEN & PET COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts, unaudited)
Three Months Ended
Six Months Ended
March 28, 2026
March 29, 2025
March 28, 2026
March 29, 2025
Net sales
$
906,152
$
833,537
$
1,523,525
$
1,489,973
Cost of goods sold
606,588
560,454
1,033,353
1,021,191
Gross profit
299,564
273,083
490,172
468,782
Selling, general and administrative expenses
185,628
179,759
359,703
347,466
Operating income
113,936
93,324
130,469
121,316
Interest expense
(14,068
)
(14,510
)
(28,579
)
(28,980
)
Interest income
4,984
5,152
11,728
11,892
Other income (expense)
(351
)
744
(169
)
(973
)
Income before income taxes and noncontrolling interest
104,501
84,710
113,449
103,255
Income tax expense
24,529
19,903
26,618
24,267
Income including noncontrolling interest
79,972
64,807
86,831
78,988
Net income attributable to noncontrolling interest
551
1,174
569
1,346
Net income attributable to Central Garden & Pet Company
$
79,421
$
63,633
$
86,262
$
77,642
Net income per share attributable to Central Garden & Pet Company:
Basic
$
1.29
$
0.99
$
1.41
$
1.21
Diluted
$
1.28
$
0.98
$
1.39
$
1.19
Weighted average shares used in the computation of net income per share:
Basic
61,379
64,140
61,391
64,346
Diluted
61,869
64,879
61,937
65,171
CENTRAL GARDEN & PET COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
Six Months Ended
March 28, 2026
March 29, 2025
Cash flows from operating activities:
Net income
$
86,831
$
78,988
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization
41,344
42,580
Amortization of deferred financing costs
1,257
1,347
Non-cash lease expense
29,680
29,987
Stock-based compensation
9,454
9,528
Deferred income taxes
3,001
2,525
Other operating activities
2,652
(1,056
)
Changes in assets and liabilities (excluding businesses acquired):
Accounts receivable
(278,079
)
(252,375
)
Inventories
(59,260
)
(67,654
)
Prepaid expenses and other assets
721
(11,542
)
Accounts payable
42,722
50,504
Accrued expenses
29,724
28,416
Other long-term obligations
(419
)
2,100
Operating lease liabilities
(29,489
)
(29,043
)
Net cash used in operating activities
(119,861
)
(115,695
)
Cash flows from investing activities:
Additions to property, plant and equipment
(21,265
)
(16,760
)
Payments to acquire companies, net of cash acquired
(57,000
)
(3,318
)
Other investing activities
(50
)
(125
)
Net cash used in investing activities
(78,315
)
(20,203
)
Cash flows from financing activities:
Repayments of long-term debt
(39
)
(145
)
Repurchase of common stock, including shares surrendered for tax withholding
(27,871
)
(98,233
)
Distribution to noncontrolling interest
(1,139
)
(1,346
)
Payment of financing costs
(2,329
)
—
Net cash used in financing activities
(31,378
)
(99,724
)
Effect of exchange rate changes on cash and equivalents
530
(1,444
)
Net decrease in cash, cash equivalents and restricted cash
(229,024
)
(237,066
)
Cash, cash equivalents and restricted cash at beginning of year
898,433
768,403
Cash, cash equivalents and restricted cash at end of year
$
669,409
$
531,337
Supplemental information:
Cash paid for interest
$
28,604
$
28,976
Cash paid for income taxes – net of refunds
$
2,874
$
13,368
Lease liabilities arising from obtaining right-of-use assets
$
6,536
$
30,776
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:
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.
Net Income and Diluted Net Income Per Share
GAAP to Non-GAAP Reconciliation
Three Months Ended
Six Months Ended
March 28, 2026
March 29, 2025
March 28, 2026
March 29, 2025
(in thousands, except per share amounts)
GAAP net income attributable to Central Garden & Pet Company
$
79,421
$
63,633
$
86,262
$
77,642
Facility closures
(1) (2)
227
5,339
7,972
5,339
Tax effect of adjustments
(53
)
(1,255
)
(1,870
)
(1,255
)
Non-GAAP net income attributable to Central Garden & Pet Company
$
79,595
$
67,717
$
92,364
$
81,726
GAAP diluted net income per share
$
1.28
$
0.98
$
1.39
$
1.19
Non-GAAP diluted net income per share
$
1.29
$
1.04
$
1.49
$
1.25
Shares used in GAAP and non-GAAP diluted net earnings per share calculation
61,869
64,879
61,937
65,171
Operating Income
GAAP to Non-GAAP Reconciliation
Three Months Ended March 28, 2026
Six Months Ended March 28, 2026
GAAP
Non-GAAP adjustments (1)
Non-GAAP
GAAP
Non-GAAP adjustments (1)
Non-GAAP
(in thousands)
Net sales
$
906,152
$
—
$
906,152
$
1,523,525
$
—
$
1,523,525
Cost of goods sold
606,588
85
606,503
1,033,353
(517
)
1,033,870
Gross profit
$
299,564
$
(85
)
$
299,649
$
490,172
$
517
$
489,655
Selling, general and administrative expenses
185,628
142
185,486
359,703
8,489
351,214
Income from operations
$
113,936
$
(227
)
$
114,163
$
130,469
$
(7,972
)
$
138,441
Gross margin
33.1
%
33.1
%
32.2
%
32.1
%
Operating margin
12.6
%
12.6
%
8.6
%
9.1
%
Operating Income
GAAP to Non-GAAP Reconciliation
Three Months Ended March 29, 2025
Six Months Ended March 29, 2025
GAAP
Non-GAAP adjustments (2)
Non-GAAP
GAAP
Non-GAAP adjustments (2)
Non-GAAP
(in thousands)
Net sales
$
833,537
$
—
$
833,537
$
1,489,973
$
—
$
1,489,973
Cost of goods sold
560,454
4,413
556,041
1,021,191
4,413
1,016,778
Gross profit
$
273,083
$
(4,413
)
$
277,496
$
468,782
$
(4,413
)
$
473,195
Selling, general and administrative expenses
179,759
926
178,833
347,466
926
346,540
Income from operations
$
93,324
$
(5,339
)
$
98,663
$
121,316
$
(5,339
)
$
126,655
Gross margin
32.8
%
33.3
%
31.5
%
31.8
%
Operating margin
11.2
%
11.8
%
8.1
%
8.5
%
Pet Segment Operating Income
GAAP to Non-GAAP Reconciliation
Three Months Ended
Six Months Ended
March 28, 2026
March 29, 2025
March 28, 2026
March 29, 2025
(in thousands)
GAAP operating income
$
77,822
$
60,614
$
127,622
$
111,871
Facility closures
(1) (2)
227
5,339
732
5,339
Non-GAAP operating income
$
78,049
$
65,953
$
128,354
$
117,210
GAAP operating margin
16.3
%
13.4
%
14.3
%
12.7
%
Non-GAAP operating margin
16.4
%
14.5
%
14.4
%
13.3
%
Garden Segment Operating Income
GAAP to Non-GAAP Reconciliation
Three Months Ended
Six Months Ended
March 28, 2026
March 29, 2025
March 28, 2026
March 29, 2025
(in thousands)
GAAP operating income
$
65,968
$
58,731
$
56,289
$
61,154
Facility closures
(1)
—
—
7,240
—
Non-GAAP operating income
$
65,968
$
58,731
$
63,529
$
61,154
GAAP operating margin
15.4
%
15.5
%
8.9
%
10.0
%
Non-GAAP operating margin
15.4
%
15.5
%
10.1
%
10.0
%
Adjusted EBITDA
GAAP to Non-GAAP Reconciliation
Three Months Ended March 28, 2026
Pet
Garden
Corporate
Total
(in thousands)
Net income attributable to Central Garden & Pet Company
$
—
$
—
$
—
$
79,421
Interest expense, net
—
—
—
9,084
Other expense
—
—
—
351
Income tax expense
—
—
—
24,529
Net income attributable to noncontrolling interest
—
—
—
551
Income (loss) from operations
77,822
65,968
(29,854
)
$
113,936
Depreciation & amortization
10,462
9,991
231
20,684
Noncash stock-based compensation
—
—
4,629
4,629
Facility closures
(1)
227
—
—
227
Adjusted EBITDA
$
88,511
$
75,959
$
(24,994
)
$
139,476
Adjusted EBITDA
GAAP to Non-GAAP Reconciliation
Three Months Ended March 29, 2025
Pet
Garden
Corporate
Total
(in thousands)
Net income attributable to Central Garden & Pet Company
$
—
$
—
$
—
$
63,633
Interest expense, net
—
—
—
9,358
Other income
—
—
—
(744
)
Income tax expense
—
—
—
19,903
Net income attributable to noncontrolling interest
—
—
—
1,174
Income (loss) from operations
60,614
58,731
(26,021
)
$
93,324
Depreciation & amortization
9,498
10,443
705
20,646
Noncash stock-based compensation
—
—
4,018
4,018
Facility closures & business exit
(2)
5,339
—
—
5,339
Adjusted EBITDA
$
75,451
$
69,174
$
(21,298
)
$
123,327
Adjusted EBITDA
GAAP to Non-GAAP Reconciliation
Six Months Ended March 28, 2026
Pet
Garden
Corporate
Total
(in thousands)
Net income attributable to Central Garden & Pet Company
$
—
$
—
$
—
$
86,262
Interest expense, net
—
—
—
16,851
Other expense
—
—
—
169
Income tax expense
—
—
—
26,618
Net income attributable to noncontrolling interest
—
—
—
569
Income (loss) from operations
127,622
56,289
(53,442
)
$
130,469
Depreciation & amortization
20,599
20,265
480
41,344
Noncash stock-based compensation
—
—
9,454
9,454
Facility closures
(1)
732
7,240
—
7,972
Adjusted EBITDA
$
148,953
$
83,794
$
(43,508
)
$
189,239
Adjusted EBITDA
GAAP to Non-GAAP Reconciliation
Six Months Ended March 29, 2025
Pet
Garden
Corporate
Total
(in thousands)
Net income attributable to Central Garden & Pet Company
$
—
$
—
$
—
$
77,642
Interest expense, net
—
—
—
17,088
Other expense
—
—
—
973
Income tax expense
—
—
—
24,267
Net income attributable to noncontrolling interest
—
—
—
1,346
Income (loss) from operations
111,871
61,154
(51,709
)
$
121,316
Depreciation & amortization
19,578
21,574
1,428
42,580
Noncash stock-based compensation
—
—
9,528
9,528
Facility closures and business exit
(2)
5,339
—
—
5,339
Adjusted EBITDA
$
136,788
$
82,728
$
(40,753
)
$
178,763