Central Garden expects to ‘bottom out’ in 2025 as CEO hints at new acquisitions

Central Garden and Pet’s recent losses are likely to slow in 2025, CEO Niko Lahanas said at a KeyBank Consumer Spotlight a few weeks ago.

After a weak Q4, Lahanas expects profits to return late next year or in 2026. For the full financial year (FY) 2024, the company’s pet segment posted a 2% year-on-year (YoY) decline in net sales, totaling $1.83 billion (€1.74B).

Central Garden and Pet’s CEO blames industry headwinds and slowdown in live animal sales for the company’s recent weak numbers. After skyrocketing pet intake during the pandemic, he notes dog sales have slowed down. While cat and small animal sales are still flat or up, dogs are a stronger industry driver.

Lahanas believes that new acquisitions and a push for more e-commerce could help turn things around.

Chinese competition

The American company is also struggling to compete with large Chinese e-commerce retailers like Shein and Temu, which create ultra-cheap products that can be shipped worldwide.

This has cut into the company’s sale of durable products like accessories. Thanks in part to the newly popular competition from abroad, the company’s pet sector sales of durables are down double digits. However, consumables, which have seen improving numbers, make up a larger part of the company’s pet business.

Positive trends ahead?

To counter these headwinds, Lahanas states the company is pushing e-commerce, which now comprises 29% of the company’s pet sector sales. “We’ve come a long way but we really feel there’s still a lot yet to do there,” Lahanas says of e-commerce.

He also notes that mergers and acquisitions, which have driven the company’s growth in the past, may get easier in 2025 thanks to the incoming Trump administration.

“We’re pretty excited about next year with, you know, a new administration in D.C., and hopefully [with] a more M&A friendly environment, we’ll see a lot more deal flow.”

The Biden administration has strictly regulated corporate mergers across industries, frustrating corporate America. Loosening regulations could be good for profits, though the possibility of new tariffs under Trump could cut earnings for some companies.

Central Garden and Pet recently tapped Randal D. Lewis, formerly of competitor Spectrum Brands, to serve as the company’s new director.