Central Garden & Pet sees a slight decline in pet sales in Q1 FY24

The US-based pet and garden retailer posted net sales of $409 million (€379M) in its pet segment in the 3 months to 30 December 2023. This is a 2% decrease compared to the $416 million (€385M) recorded in the previous year.

The company’s organic net sales in the first quarter of its fiscal year (FY) 2024 in the segment also took a 5% hit, excluding the impact of its November 2023 acquisition of TDBBS, a Virginia-based premium dog treats provider. 

A spokesperson for Central Garden & Pet says the decrease in net sales was due to lower sales of durable pet products. In November, the company stated that it had seen a “high single digits” decline in that category. It attributed this impact to an overall “softness” in pet ownership. 

“Wellness and aquatics and reptile were more than offset by double-digit declines in durables across pet beds, small animal and our distribution business,” says CFO Nicholas Lahanas.

Growing market share

However, in terms of successes, the company claims it grew its market share and total distribution points in dog toys, small animals, pet birds, aquatics, and the health and wellness categories. 

The company also claims that e-commerce accounts for 26% of pet sales. 

It added that it also improved margins due to its cost reduction program and efforts to simplify the business, including lowering commercial spending.  

Overall performance

The company’s global net sales stood at $635 million (€589M), an increase of 1% compared to $628 million (€582M) a year ago. 

Gross profit was $179 million (€165.8M) compared to $172 million (€159.3) the year prior. Gross margin improved to 28.2% compared to 27.4%, driven by cost management and moderating inflation, while earnings per share were $0.01 (€0,0093) compared to a loss per share of $0.16 (€0.15), an increase of $0.17 (€0.16). Adjusted EBITDA was $37 million (€34.27M) compared to $29 million (€26.86M) a year ago.

Commenting on the results, the company’s interim CEO Beth Springer says the fiscal year was “off to a solid start” despite the “challenging external environment,” adding that its outlook for the fiscal year remains “unchanged.” 

“Looking beyond the first quarter, we remain confident in our Central to Home strategy, the long-term vibrancy of the pet and garden industries and the competitive strengths of our business, and we continue to make thoughtful investments for the future,” Springer adds. 

Founded in 1980 and headquartered in Walnut Creek, California, Central Garden & Pet operates more than 65 brands within the pet and garden industries and employs over 7,000 people across North America and Europe.