Financial Data and Key Metrics Changes - Net sales for Q1 2026 were $617 million, a 6% year-over-year decline, primarily due to the timing of retailer spring inventory shipments and portfolio optimization efforts [11][12] - Non-GAAP gross profit was $190 million, down from $196 million, while non-GAAP gross margin expanded 100 basis points to 30.8% [12][14] - Non-GAAP diluted earnings per share were $0.21, consistent with the prior year and above expectations for the quarter [14][19] Business Line Data and Key Metrics Changes - Pet segment net sales were $416 million, a 3% year-over-year decline, influenced by portfolio optimization and shipment timing [15] - Non-GAAP operating income for the pet segment was $50 million, with an operating margin improvement to 12.1% [15] - Garden segment net sales were $202 million, a 12% decline, reflecting shipment timing and rationalization of live plants categories [16] - Non-GAAP operating loss for the garden segment was $2 million, with an operating margin of -1.2% [16] Market Data and Key Metrics Changes - The company gained market share in several key categories, including dog treats, flea and tick, pet bird, and professional portfolio in the pet segment [15] - In the garden segment, market share gains were noted in wild bird, fertilizer, and packet seeds [16] Company Strategy and Development Direction - The company is focused on sustainable long-term growth, emphasizing cost management, operational simplicity, and innovation [4][5] - A recent acquisition of Champion USA is part of the strategy to refine the portfolio and expand capabilities in the livestock industry [8] - The company plans to balance cost management with targeted investments in innovation, digital capabilities, and e-commerce [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the upcoming garden season despite Q1 results not being indicative of the full year [23] - The company expects to see modest growth in the pet segment in the back half of the year, indicating stabilization in the category [35][54] - Management reaffirmed the expectation for Fiscal 2026 non-GAAP diluted EPS of $2.70 or better [19] Other Important Information - Cash and cash equivalents totaled $721 million, reflecting strong liquidity and cash generation [18] - The company repurchased approximately 660,000 shares for $18.5 million during the quarter [17] Q&A Session Summary Question: Insights on the garden season and share growth opportunities - Management noted that Q1 results do not dictate the garden season outlook, with a 14% year-over-year increase in distribution points expected to support growth [23] Question: Balancing profitability improvements with growth investments - Management indicated a shift towards a growth mindset, focusing on innovation, private label, and M&A to drive market share [27][28] Question: Quantifying sales headwinds from shipment timing and portfolio optimization - Management clarified that timing impacts accounted for more than half of the overall net sales decline, with portfolio optimization efforts being the second largest factor [34] Question: Update on pet adoption trends - Management reported stabilization in the pet category, with positive growth in the live animal business [35] Question: Thoughts on retailer commitments to the garden category - Management expressed confidence in retailer support for the upcoming season, emphasizing the importance of lawn and garden products [44] Question: M&A environment outlook - Management is encouraged by increased M&A activity and is involved in several discussions, particularly in the pet sector [46] Question: Inventory readiness for potential demand surges - Management confirmed reasonable in-store inventories and readiness to fulfill increased demand due to favorable weather [48] Question: Consumer sentiment in pet and garden categories - Management indicated a focus on value from consumers, with a shift towards smaller maintenance projects in the garden category [56]

Q1 FY2026 Investor Presentation 2.4.2026 Q1 Highlights & Outlook Niko Lahanas, CEO Financials & Segments Brad Smith, CFO Management Q&A Niko Lahanas, Brad Smith, J.D. Walker, John Hanson Q1 FY26 Investor Presentation 2 Forward-looking Statements The statements contained in this presentation which are not historical facts, including statements concerning productivity initiatives and earnings guidance for fiscal 2026, are forward-looking statements that are subject to risks and uncertainties that could cause ...

Financial Performance - Fiscal 2026 Q1 net sales were $617 million, down from $656 million in Q1 FY 2025, reflecting a decrease of approximately 6%[3] - Operating income decreased to $17 million from $28 million, resulting in an operating margin decline to 2.7% from 4.3%[3] - Net sales for the three months ended December 27, 2025, were $617.4 million, a decrease of 5.9% compared to $656.4 million for the same period in 2024[26] - Gross profit for the same period was $190.6 million, down from $195.7 million, resulting in a gross margin of 30.9%[26] - Operating income decreased significantly to $16.5 million from $28.0 million, reflecting a decline in operating margin from 4.3% to 2.7%[26] - Net income attributable to Central Garden & Pet Company was $6.8 million, a 51.1% decrease from $14.0 million in the prior year[26] - Adjusted EBITDA for the three months ended December 27, 2025, was $49.8 million, down from $55.4 million in the prior year[39] Segment Performance - Pet segment net sales were $416 million, down from $427 million, primarily due to portfolio optimization and shipment timing[5] - Garden segment net sales were $202 million, down from $229 million, also reflecting shipment timing and portfolio optimization efforts[7] Cash and Debt Management - Cash and cash equivalents increased to $721 million from $618 million year-over-year[9] - Total debt remained stable at $1.2 billion, with a gross leverage ratio of 2.9x, below the target range of 3.0 to 3.5x[10] - Cash flows from operating activities resulted in a net cash used of $70.2 million, compared to $68.8 million in the prior year[28] - Cash, cash equivalents, and restricted cash at the end of the period totaled $737.2 million, down from $632.7 million a year earlier[28] Future Outlook - Central expects fiscal 2026 non-GAAP diluted EPS of $2.70 or better, supported by margin discipline and cost efficiency initiatives[14] - Capital expenditures are projected to be approximately $50 million to $60 million, focusing on maintenance and targeted growth investments[15] Share Repurchase - Central repurchased 660,000 shares for $18.5 million during the quarter, with $28 million remaining for future repurchases[11] Acquisitions and Expenses - The company invested $57.0 million in acquiring companies during the quarter, significantly higher than $3.3 million in the same period last year[28] - The company recognized an incremental expense of $7.7 million related to facility closures during the quarter[32] Gross Margin Improvement - Gross margin improved by 110 basis points to 30.9% compared to 29.8% in the prior year, driven by enhanced productivity[3]

Core Viewpoint - Central Garden & Pet (CENT) is currently identified as a strong value stock, supported by its favorable Zacks Rank and valuation metrics [4][6]. Group 1: Company Metrics - Central Garden & Pet has a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential for value investors [4]. - The stock is trading at a P/E ratio of 12.91, significantly lower than the industry average of 17.02, suggesting it may be undervalued [4]. - CENT's Forward P/E has fluctuated between 12.63 and 19.24 over the past 12 months, with a median of 14.87, indicating variability in market perception [4]. - The company has a P/CF ratio of 9.07, which is also lower than the industry average of 15.94, reinforcing the notion of undervaluation based on cash flow strength [5]. Group 2: Investment Outlook - The metrics indicate that Central Garden & Pet is likely undervalued at present, making it an attractive option for value investors [6].

Core Insights - Central Garden & Pet Company (CENT) is trading at a forward 12-month price-to-earnings (P/E) multiple of 11.85X, which is below the industry average of 16.71X, raising questions about whether this discount reflects challenges or presents a buying opportunity [1][8] Financial Performance - CENT shares have increased by 10.8% over the past three months, slightly underperforming the industry's rise of 11.3% but outperforming the sector's decline of 2.5% and the S&P 500 Index's gain of 6.4% during the same period [2] - The Zacks Consensus Estimate indicates year-over-year sales growth of 0.8% for the current year and 1.2% for the next year, while earnings are expected to grow by 1.1% and 4.7% respectively [12][13] Strategic Initiatives - The company is refining its portfolio to focus on high-growth, high-margin categories while exiting underperforming segments, including the sale of its garden distribution business and a strategic exit from the pottery business [3] - Management is intentionally exiting lower-margin, more volatile businesses, which is expected to lead to a sales decline in fiscal 2025 due to reduced exposure to lower-margin products and the transition of certain product lines to a direct-to-retail model [4] Operational Efficiency - A key component of CENT's strategy is the "Cost and Simplicity" program, which has improved the company's margin profile, resulting in an adjusted gross margin expansion of 210 basis points to 32.1% in fiscal 2025 [5][8] - The company is accelerating its shift towards e-commerce, with e-commerce now accounting for 27% of Pet segment sales and over 10% of Garden segment sales, indicating a strong adaptation to changing consumer behaviors [9] Market Resilience - Despite market volatility and weather fluctuations, CENT's core segments have shown resilience, with the Garden segment achieving its largest point-of-sale year on record and the Pet segment maintaining overall market share [10]

Group 1: Company Overview - Boyd Gaming (BYD) is part of the Consumer Discretionary group, which includes 261 companies and ranks 11 in the Zacks Sector Rank [2] - Boyd Gaming currently holds a Zacks Rank of 2 (Buy), indicating a favorable outlook based on earnings estimates and revisions [3] Group 2: Performance Analysis - Year-to-date, Boyd Gaming has returned approximately 2.6%, outperforming the Consumer Discretionary sector's average return of 1.3% [4] - In comparison to its industry, Boyd Gaming is slightly underperforming, as the Gaming industry has gained an average of 5.1% year-to-date [5] Group 3: Comparative Analysis - Another stock in the Consumer Discretionary sector, Central Garden (CENT), has a year-to-date return of 2.9% and also holds a Zacks Rank of 2 (Buy) [4][5] - Central Garden belongs to the Consumer Products - Discretionary industry, which has moved -2.1% year-to-date, indicating a contrasting performance compared to Boyd Gaming's sector [6]

Core Viewpoint - Central Garden (CENT) has received a Zacks Rank 2 (Buy) upgrade, indicating a positive outlook for the company's earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling activity that affects stock prices [4]. Central Garden's Earnings Outlook - Central Garden's rising earnings estimates and the Zacks Rank upgrade suggest an improvement in the company's underlying business, likely leading to increased stock prices [5][10]. - The Zacks Consensus Estimate for Central Garden indicates expected earnings of $2.76 per share for the fiscal year ending September 2026, with a 2% increase in estimates over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with only the top 20% of stocks receiving a "Strong Buy" or "Buy" rating, indicating superior earnings estimate revisions [9][10]. - Stocks rated Zacks Rank 1 have historically generated an average annual return of +25% since 1988, showcasing the effectiveness of the system [7].

Core Viewpoint - Central Garden & Pet reported a narrower-than-expected loss in Q4 fiscal 2025, with both revenue and earnings exceeding estimates, indicating operational momentum and a strong fiscal year performance [2][3]. Financial Performance - The company posted an adjusted loss of 9 cents per share, better than the Zacks Consensus Estimate of a loss of 20 cents, and improved from an 18-cent loss in the prior year [3]. - Net sales reached $678.2 million, a 1% increase year-over-year, surpassing the Zacks Consensus Estimate of $666 million, driven by strong performance in the Garden segment [4]. - Gross profit increased to $196.5 million from $169 million a year ago, with gross margin expanding 380 basis points to 29% [5]. - The operating loss was $6.4 million, significantly improved from a $32.4 million loss reported a year earlier [6]. Segment Performance - The Pet segment generated $428 million in sales, down 2% year-over-year, impacted by the planned closure of U.K. operations [7]. - The Garden segment saw a 7% increase in net sales to $250 million, with strong performance in various product categories [9]. Financial Health - The company ended the quarter with cash and cash equivalents of $882.5 million and long-term debt of $1,191.6 million, resulting in a gross leverage ratio of 2.8 [12]. - Cash provided by operating activities was $332.5 million in fiscal 2025, compared to $394.9 million the previous year [12]. Outlook - Central Garden & Pet anticipates adjusted earnings of $2.70 per share or better for fiscal 2026, supported by margin discipline and cost efficiencies [14]. - For Q1 fiscal 2026, the company projects earnings in the range of 10-15 cents per share, down from 21 cents reported in the prior year [15]. - The consensus estimate has seen a downward trend, with a shift of -46.97% in recent estimates [16].

Core Insights - Central Garden & Pet (CENT) has expanded its animal health platform by acquiring the U.S. assets of Champion USA, enhancing its presence in the livestock segment and adding the JustiFLY product line to its Professional business unit [1][8] Company Overview - Champion USA has over 15 years of experience in providing EPA-approved, residue-free fly-control solutions, having served over 300,000 producers and treated more than 50 million head of cattle globally, indicating a strong market presence [2] - The acquisition is expected to enhance CENT's growth profile by leveraging Champion's established relationships and brand equity alongside CENT's distribution network and innovation capabilities [3][6] Market Dynamics - Livestock fly control is identified as one of the fastest-growing areas within animal health, driven by increasing demand for sustainable and cost-effective herd management solutions [3] - CENT's animal health business was already showing strong momentum in Q4 of fiscal 2025, with solid growth across its Professional portfolio and equine categories, providing a favorable backdrop for the integration of Champion USA [4] Operational Strategy - Operational continuity is prioritized, with Champion USA's employees transitioning into CENT's Professional segment to ensure consistent product quality and customer service [5] - The acquisition aligns with CENT's long-term strategy of expanding differentiated, high-quality animal health offerings, positioning the company for steady, profitable growth [6] Financial Performance - CENT shares have declined 6.3% over the past three months, while the industry has seen a minor decline of 0.3% [7] - CENT trades at a forward price-to-earnings ratio of 12.08X, which is lower than the industry's average of 15.94X, indicating a potentially attractive valuation [7]

Core Viewpoint - Central Garden & Pet Co. (NASDAQ:CENT) is recognized as one of the best small-cap value stocks to buy, showing an increase of over 8% since its fiscal Q4 2025 earnings release on November 24 [1]. Financial Performance - The company reported a quarterly revenue growth of 1.30% year-over-year, reaching $678.18 million, which exceeded estimates by $20.32 million [3]. - The earnings per share (EPS) was negative $0.09, surpassing consensus estimates by $0.11 [3]. - The strong performance in the Garden segment was a key driver, exceeding estimates by approximately 11%, while the Pet segment met general consensus expectations [3]. Analyst Ratings - Bill Chappell from Truist Financial maintained a Hold rating on the stock without providing a price target [1]. - Bradley Thomas from KeyBanc reiterated a Buy rating with a price target of $50, citing the company's Q4 earnings as a significant factor for his positive outlook [1][2]. Company Overview - Central Garden & Pet Company produces and distributes branded and private label products for the garden, lawn, and pet supplies markets, with operations divided into Pet and Garden segments [4].