Pet sales fall 6% for US retailer Central Garden & Pet
Softer demand, along with the timing of orders, is the reason behind a lower performance in the first months of 2025.
US retailer Central Garden & Pet Company says that customer orders being strategically placed to capitalize on promotional offers contributed to the decline in net sales during the second quarter of its fiscal year (FY) 2025 ending 29 March 2025.
The company reported net sales for its pet segment of $454 million (€409M) in the period, down 6% from $480.2 million (€445.2M) for the same period in FY2024.
However, while there was softer demand in durable pet products, the company’s pet segment maintained its overall market share and gained in dog chews, rawhide and equine products.
E-commerce accounted for 27% of the Californian retailer’s pet sales.
UK operations
Central began winding down its UK operation this year and will transition to a direct-export model for customers in the UK and select other European markets. This resulted in $5.3 million (€4.8M) in initial costs.
Operating income was down 3%, from $63 million (€58.4M) in Q2 FY2024 (which had jumped 13% year-over-year [YoY]) to $61 million (€55M) in Q2 FY2025. The operating margin increased by 40 basis points to 13.4%.
Non-GAAP operating income increased 5% to a record $66 million (€59M), while the non-GAAP operating margin expanded by 150 basis points to 14.5%, driven by productivity improvements such as streamlining procurement, manufacturing, logistics, portfolio management and administrative expenditures across the company.
The pet segment’s adjusted EBITDA of $75 million (€68M) was $2 million (€1.8M) above the prior quarter.
Cost and Simplicity program
Across the wider business, net sales were down 7% YoY to $834 million (€752M), gross profit was $273 million (€246M), a decrease of 2%, and operating income was $93 million (€84M), in line with the prior year.
“We are pleased with our solid second-quarter results. Despite expected softer sales, our continued focus on improving productivity and execution of our Cost and Simplicity program drove margin and earnings per share growth above last year’s performance,” says Niko Lahanas, CEO of Central Garden & Pet.
Looking ahead, the retailer warns of risks including tariffs, geopolitical tensions, inflation, consumer caution and headwinds in the pet specialty brick-and-mortar channel.
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