Central Garden & Pet’s third quarter performance saw a favorable market reaction as the company delivered year-over-year revenue growth and outpaced Wall Street’s expectations. Management attributed the positive results to ongoing operational streamlining, portfolio simplification, and efficiency initiatives, particularly within both the Pet and Garden segments. CEO Nicholas Lahanas highlighted the impact of strategic actions such as reducing exposure to low-margin products and consolidating facilities, noting, “We delivered consistent performance while advancing portfolio optimization and maintaining disciplined cost management.” Additionally, growth in areas like wild bird feed and equine products, alongside the increasing role of e-commerce, contributed to the company’s resilient quarter.
Is now the time to buy CENT? Find out in our full research report (it’s free for active Edge members).
Central Garden & Pet (CENT) Q3 CY2025 Highlights:
- Revenue: $678.2 million vs analyst estimates of $652.7 million (1.3% year-on-year growth, 3.9% beat)
- Adjusted EPS: -$0.09 vs analyst estimates of -$0.20 (54.3% beat)
- Adjusted EBITDA: $20.18 million vs analyst estimates of $18.88 million (3% margin, 6.9% beat)
- Adjusted EPS guidance for the upcoming financial year 2026 is $2.70 at the midpoint, missing analyst estimates by 1.5%
- Operating Margin: -0.9%, in line with the same quarter last year
- Market Capitalization: $1.96 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Central Garden & Pet’s Q3 Earnings Call
- Bradley Bingham Thomas (KeyBanc Capital Markets) asked about margin expansion amid ongoing cost and simplicity efforts. CEO Nicholas Lahanas noted further gains are expected, but "the low-hanging fruit has been picked."
- James Andrew Chartier (Monness, Crespi, and Hart) requested details on the uptick in corporate expenses. CFO Bradley G. Smith cited timing differences, investments in growth, and miscellaneous reserve adjustments as primary drivers.
- Robert James Labick (CJS Securities) probed the effectiveness of passing tariff-related price increases to retailers and end consumers. Smith replied that negotiations are ongoing, with consumer price elasticity modeled around one, but retail acceptance remains uncertain.
- Brian McNamara (Canaccord Genuity) questioned the outlook for top-line growth and pet ownership trends. Lahanas described revenue growth as "challenging," but noted pet ownership appears stable to slightly up, which could benefit core categories.
- William Michael Reuter (Bank of America) asked about capital allocation priorities given the company’s large cash balance. Lahanas stated the focus remains on M&A in margin-accretive consumables, with opportunistic share repurchases continuing as conditions allow.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will watch closely for (1) how effectively Central Garden & Pet offsets tariff pressures through pricing and supply chain initiatives; (2) the impact of SKU rationalization and cost management on both margin expansion and top-line stability; and (3) the pace of e-commerce and digital channel growth, particularly in Garden. Execution on new product launches and the ability to identify attractive M&A opportunities will also be important markers of success.
Central Garden & Pet currently trades at $33.72, up from $31.43 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free for active Edge members).
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
