Central Garden & Pet Company (CENT) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 and first half FY2026 with net sales of $906 million, higher operating margins, and GAAP diluted EPS of $1.28, reflecting strong execution and improved performance across key categories.

• Continued business simplification and cost initiatives, including moving DoMyOwn to Covington, consolidating TDBBS, and facility closures, driving operational flexibility and sustainable benefits.

• Formed a strategic joint venture with Phillips Pet Food & Supplies, divesting the pet distribution business for cash and a 20% stake, streamlining operations and focusing on branded portfolio.

• Advanced innovation pipeline with new branded and private label products in both Pet and Garden segments, exceeding expectations.

Financial highlights

• Net sales reached $906 million, up 9% year-over-year, with gross profit of $300 million and gross margin of 33.1%.

• Operating income was $114 million (up 22%); operating margin rose to 12.6% from 11.2%.

• Net income totaled $79 million, up from $64 million; record Q2 diluted EPS of $1.28.

• Adjusted EBITDA was $139 million (vs. $123 million); margin improved to 15.4%.

• Cash and cash equivalents at quarter-end were $653 million, up $137 million year-over-year.

Outlook and guidance

• Reaffirmed FY2026 non-GAAP diluted EPS guidance of $2.70 or better, excluding future M&A or restructuring.

• Joint venture expected to reduce reported revenue in the second half by low-teens percent, with minimal earnings impact.

• Guidance assumes a competitive, promotional retail environment, value-oriented consumer, and select commodity inflation.

• Capital expenditures projected at $50–$60 million, focused on maintenance, productivity, and targeted growth.

• Management expects principal funding from operations and a $600 million credit facility to meet liquidity needs for at least the next 12 months.