CENT - Earnings call transcript Q1 2025 | Central Garden & Pet Company

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to Garden & Pets Fiscal 2025 First Quarter Earnings Call. My name is Julian, and I will be your operator conference operator for today. [Operator Instructions] As a reminder, this conference call is being recorded.

I will now turn the call over to Friederike Edelmann, Vice President, Investor Relations. proceed. Please

Friederike Edelmann

and Call. joining everyone, Fiscal First you Earnings XXXX thank afternoon, Central's for Quarter Good

today Nicholas of me Consumer Financial and Joining are Walker, Products. Officer; Smith, Officer; J.D. John Chief Brad Hanson, of President President Pet Products; Lahanas, Consumer Garden Chief Executive

will prepared for In who remarks, John join will us J.D. Q&A by Niko more session. in moment, today's key and these a followed detail. our takeaways share Brad, discuss After their will

that cause filed all I call materially would like be results expressed everyone today. detailed in statements during risks to Before or annual to forward-looking statements we the this can A forward-looking found our remind description are and with begin, made uncertainties our differ to SEC. central subject of those factors report implied that from could actual risk

Please forward-looking Central or update obligation statements future to developments. to note publicly events undertakes information, other new that no reflect

on non-GAAP are release GAAP discussed a and related on available measures including Our press materials, ir.central.com. for this reconciliation the call

unless comparisons against all this the in during growth year. prior discussed specified, same period made the are call Lastly, otherwise

If the please free you call reach after questions to directly. to quarter, out me feel point any have any or further during the

Niko? begin. with that, And let's

Nicholas Lahanas

call. Thank this time you, for key by begin good today. Thank I'd to from taking everyone. to you Friederike, and afternoon, the like us X join highlighting takeaways the

the start strong to year, Team fiscal thanks execution Central. a First, excellent to by

through improvements. and business outlook efficiency And the our our footprint in cost portfolio confidence for simplifying in driving progress steady third, optimization rationalization, Second, and structure year.

on expand points. me let these Now

in business and timing shipments by timing pet garden and of notably, in activities with continued e-commerce, our cost business. work and and digital in performance was them, enhanced hard across pet future. which an by a particularly garden And Most capabilities. stronger and the conditions of driven the inflationary both promotional are reflects because These dedication improved and growth supported grit We're by achievements. easing quarter Central. encouraged due of quarter First the to our even building solid pressures. margins achievements This a we're channels, weather our drive team earnings management the share per disciplined sales. delivered robust to for in success. of growth testament commitment and favorable categories net unwavering We Their first

Second, cost simplicity and program.

meaningful Our new results. optimization. out benefits. first distribution prior simplicity Initiatives are in the include for drives projects. periods cost program yielding we implemented and quarter continue to Highlights And tangible roll

been for This particularly BUs, Our all new within measures footprint reducing distribution now operational productivity and legacy has to our improve days. implemented facility we've over replaced efficiency. XXX facilities, center significantly while across X in enhancements, teams. Georgia Covington, distribution increasing Safety merchandising safety, our

impacted the animal units strategic Angeles us proud we're while and that Los our in we our share broader expanded more expansion assisting organic agile support e-commerce our direct-to-consumer positioning several to efforts the of E-commerce leaner, are These to and efficient, to strengthens commitment make new output. to more Pennsylvania. business overall boosted expansion, support up as organizations recently area. more part for This strategy well productivity some responsibility welfare On operations note, These environmental by initiatives growth, partners shipments collaborated M&A and effectively. for margin our facility to stewardship. wildfires resources fulfill own drop to teams and retail as ability freeing social of Easton, our business have to communities and Central and our have manage

Care to with and society. County Our contributions friends Animal pet such a best food L.A. include and and cash beds, along essential donation Control dog animal pads, supplies, training as toys,

fiscal outlook the our in for year. strategy. confident our We're Third,

fiscal in taking we're actions profitable growth and XXXX Our team deliberate the and drive beyond. to and sustainable

such, guidance reaffirming our on XXXX maintaining delivering long-term we're higher, $X.XX value. our focus non-GAAP As of EPS for or fiscal

cash investing cost continue we'll innovation. disciplined while management ahead, and strategically exercise in critical in to Looking and e-commerce, capabilities, digital particularly

enhancing portfolio. complexity remain of capabilities Our geopolitical That priorities, and focused recognize strategic environment, macroeconomic strengthening the uncertainties our as we growth potential on said, the includes expanding which such tariffs. M&A efforts and external

consumer Additionally, we retail expect promotions competitive and by ongoing the pressure, marketplace, a in sector. brick-and-mortar driven challenges

anticipate as patterns extreme the normal. In continued weather Garden we potential new business, from a volatility

results, still significant of shipments. With from the ahead the cautious benefit garden favorable overinterpret to of quarter season us, XXXX the we're especially not first timing given

year. through As existing anticipate retailers work we inventories, last quarter than second softer a

Brad. I'll Brad? over that, turn With it to

Brad Smith

I'll Building everyone. afternoon, the Good results, quarter of for and takeaways, outlook results fiscal year. our the overview Niko. of on key segments an our Niko's you, provide Thank including our first X

the $XXX gross Let's from of Net shipments, million, our margin to start XXX quarter timing by year garden pet profit driven side. increased XX.X%, driven results. to a $XXX improved inflation. by quarter was continued as gains for of Consolidated our decreased activity points the up and timing $XXX promotional sales percentage million $XXX expense the first moderating primarily XXX supported sales by of X% on million, weather grew XX.X% gross with side favorable and and ago, a reflecting on of the X% and businesses. basis SG&A basis by SG&A million discipline cost by below to and points productivity across prior year,

year XX.X%. [ EBITDA million, other a to in was for to compared came compared year $XX quarter and rate of per $X earnings result X.X%. in to as expense was margin $XX $XX line, was ago. net was income for quarter cash a compared the prior million expense XXX Other interest share Net and prior million $X to million million $XXX,XXX of compared our to million the Adjusted the year. compared points and interest $X.XX ago. by $X $XX ] million income at to by improved compared million income larger tax million $X quarter was Below $X.XX $XX the in driven year the basis balances. income to was a operating Operating higher

driven Now dog than more I'll X% starting highlights growth offsetting our in X from lower $XXX segments, sales Pet digits, cat single-digit low-margin to primarily with encouraging X declines net exit an and a compared past decline, durable SKUs. with the million, grew Consumable of by improvement the our mid-single Aquatics while sales quarters. double-digit Pet. sales provide to increased to sales decision in saw

relatively e-commerce sales Although now of channels. during were for with in net brick-and-mortar the remained in was offsetting of strong accounts online. sales consumables across net share new which the to growth in POS consumable addition shipments prior This quarter, E-commerce by year. share for XX% growth held rates, gains Overall, declines categories with driven pet contributed products of X% market growing -- we multiple successfully further improvements conversion flat. over and

$XX cost and up million, Operating improved income and prior Pet by Operating program $XX gains million margin in resulting XXX basis simplicity points from for productivity year. by was the moderating driven our to from XX%, inflation.

EBITDA ago. result, million Pet segment compared $XX a As increased million a adjusted to year to $XX

thanks sales exceeded Garden. less than double in million, business digits to centralize Garden omnichannel was of across the Overall, efforts from to during quarter, performance Pet and sets pure-play month and increase This while engagement Guard more shipments Moving X% controls quarter store POS, sales distribution ago. bird fertilizer, for that growth for across a retail $XXX and a optimize business, which the shipments early accounts driven net and and sales, e-commerce compensated new year were lower retailers, large strong in growing content December. boosted conversion than developed and initial had our season reflecting wild items, rates media for by record units. another

driven million operating came moderating Operating and income for $X productivity ago, Garden X.X% in loss negative Operating to a compared inflation gains. year X.X% in was quarter. compared year prior the $X million to at by margin

adjusted $XX the million quarter. million $X segment was Garden Finally, EBITDA to compared year prior in

XXXX us. the where season is smallest Niko As still of particularly segment, for quarter mentioned, QX our Garden is ahead typically the

While performance the to in the quarter, strong first be it draw the year. would premature we're for with full conclusions pleased

balance million operations the million Let year flows. by was used the versus prior quarter. cash sheet Cash address the me in $XX $XX and for quarter now

garden led capital the to inventory prior the for slightly Depreciation million, quarter year. amortization was to $XX $X reductions was on quarter working and than quarter million, focus this across prior was CapEx the also ongoing year Our pet and year. segments. which further the both less the below management prior compared for the

[ ] or million we of X. $XX shares the During stock. repurchased approximately our million quarter,

the $X.X share billion first with ratio end, the $XXX was facility no of ended As equity gross of to quarter X.Xx line below available X quarter borrowings credit plan. additional the leverage to ago, of target [ $XXX the ] repurchase North of dilution with end our year at the programs of in a million Xx year. million authorized debt Total compared under X.Xx. had We We prior the shares range in quarter. remains a under with

first to our QX $XXX were Cash and million cash million increase the working in equivalents after at the of the quarter build. $XXX $XXX capital compared year, usual of prior an million end

consumable Given our high-growth accretive strong identifying remain margins. actively companies focused with we on financial position,

categories Our our adjacent in goal growth scale to capabilities and key enhance build creation. is long-term to core strategically value in and categories drive

outlook. 'XX our to Turning fiscal

Niko for unchanged remains mentioned, November. guidance our As

performance compared expect we quarter after and benefited last this from of first year. our quarter timing activities, promotional favorable Given second to shipments

and strength and outlook However, for non-GAAP or $X.XX This year. geopolitical macroeconomic, EPS we in of action weather confidence plans of near-term confident of better as in team uncertainties. the strategy our resilience we the achieving and in our fiscal remain the our underscores navigate

will we and $XX segments. million initiatives this investments These to plan productivity at be CapEx, maintenance fiscal across $XX to we year. on both focused As our million enhancing look essential approximately invest

Our assumes impacts arise restructuring acquisitions, initiatives that and that or under fiscal program from including 'XX. the may simplicity excludes cost tariffs the fiscal currently potential year during divestitures activities, outlook proposed

would open the for questions. We line to like now

Operator

from our Instructions] with Bill Truist And comes Securities. first [Operator question Chappell

William Chappell

congratulations Or this Niko, forward? everything quarter? is know, as exactly pull to expected? And you on I am don't say a the just all so supposed really I was

Nicholas Lahanas

we it was forward. say timing. have better. exactly call wouldn't guided wouldn't some pull We we little a would it expected had I Yes, I how you otherwise.

shipments. I it's execution. good It's -- bit some mix, a than favorable as we earlier a had prior businesses -- think weather, great in little well, right? and just timing it would a that of but timing bit was combination say of year. some had of more little loaded some I We a

came of kind of it together. all So

of you'll that out remarks. prepared in I come the some think see as we QX though, stated of

William Chappell

of I mean, season on I shipments a of Pet just I the I that's side? retailers the with of also understand change we're getting how to a trying bigger what timing don't is majority that timing of usually, earlier And much. for are -- of and Garden sign ready I that on the but seeing bullish that that kind And shipments that, guess the understand is much question remember

So help could maybe us you there.

Nicholas Lahanas

Yes.

have So type outdoor some very of that much businesses, do we also so spring a cushion little time earlier in is one earlier business, business, as Ardent. And well. bit our loaded orders. which obviously, seasonal pet some had a we and That's cushion,

few have anything a don't the along of as well. to pet add? businesses know, you So got I do pet John, pulled

John Hanson

Yes. pulled We QX hadn't had some honestly promotional we activity that into QX for. got just early planned that

Brad Smith

Yes. shipments I needs customer mean out is -- well. I for as the plan timing the Brad. this notice fairly on the move short promotional around to to activities mean on can go those of when

up in the year-over-year shipments this to there were no that QX sooner activity But hit actually So in of terms were normal QX. ended of more all we year. fairly And in -- was expecting pull where was was It intentionally was a to situation with not consistent promotions. forward. we just prior there we trying the new there underscore were big hitting certainly

John Hanson

that at a inventory businesses seasonal good is a Because which And the forward, the not customers all. want as pulled we No, good that season. take the honestly, They are thing. view excited thing. to about early, even

William Chappell

And accounted expect release color some it. where what you to your surprisingly, for some in more activity issues? you have could in somewhat the tariff you Got you've give see might us on then guidance. you Maybe said and that accounted

Nicholas Lahanas

Yes.

China ride tackle the we've has been on the been, things exposure and of based the be when But, timing mitigation the get Mexico those comfortable were heading as given and like looked tariffs. everything to we've a us, Obviously, see place that impact those, to XX% very watching of got our in that hit our we've we would say well strategies and on within wild this Canada we XX% the at obviously, mean, on -- least. and guide. of some potential absorb the to we'd we quite I able of . week front in that with where closely potential everyone stay sized tariff able still as So up are

Operator

Brad Markets. with KeyBanc our Capital from Thomas And comes next question

Bradley Thomas

the hoping exemption you having And of was to do opinion substantially de you And your on it some just on policy just that potentially how topic and on example. talk think that or pet the category closed Niko, being right if of impact changes. now, your follow about I for up could wondering was I minimis be reduced? may much

Nicholas Lahanas

let and about more a it. a plays to lot Yes. John issue. very fill He out. I I'll it address how hell kick to off, of see do knows the I'll But finally pleased that Washington decided it than We'll have we're in.

I how going I probably the that think category to have out. going forward. we most But plays affect it's durable see to the think still

rate to off love see the with penetration I animal see bit take And But you I and you'll certainly, dig adoptions we'd see durables up. and live playing should still little pet it level household really field. the think increase. think pick that that, if a deeper,

John Hanson

Yes.

Just that little declines bit, prior improvement to we've versus seen build quarters. a durable in sequentially I double there low on were digits think QX,

you having it the they're low-priced web see go around difficult us really how It's for can coming look versus prices think that know impact, or you ownership is e-comm soft the doubt Asia, on much is because page soft it's pet acquisition an about offering, and range hey, that say, of what they're of offering. the can what category. out So for XX% goods. We no to and and just

really see we a and going think half. good back it's have forward. just to to how going that thing And impacts wait the we're So

Bradley Thomas

think color How if better appreciate big should really kind here of about the a spring. the for follow think is could think that share change? that you I any the basis just you're we But it. would business that? up on live I down what I that And doors you placements, or and if all like-for-like goods? a underlying could just retail fingers as doesn't on Are up opportunity as you weather like on look know goods you live we weather for category. about in crossed about

J. Walker

This in I'm QX. first the live quarter Brad. they J.D. Great impact that. is so goods, very take our regarding solid year. The question, goods unit. all, I'll obviously, business last -- of a had material live business turned a on of The in performance proud

-- commitments. think model it business And a good better delivered business reflects they've they've of to done I better their the financial and that lot on business work the in getting overall performance. a this

mother process, rationalized So getting Obviously, right. at that's or operating And cooperates, this It's does unprofitable performance includes or and started think if nature season. SKUs. they've unprofitable business that here, like is the this that that -- better the year-over-year. much us. rightsized this weather optimized exiting cadence really right geographies SG&A, of facilities, front and mainly a QX now. we some the a product in so in rhythm footprint role But in turns that's I least They've business the and business the if still that offering, they're QX her season

we feel about So better it. much

Bradley Thomas

growth perhaps And capacity That's I facility how and Can could if facility us just . the on fit one of have. the and think great. might us in, last going help the that here? acquisitions squeeze about -- you the new into you maybe think distribution it forward

Nicholas Lahanas

of more we've high Yes. in X and entire taken but ever some mainly in a where segment facility more doors It's this what project, would roughly a room folded the as than facility. to before, other tour I facilities them what and I now, there. ceilings, you than products our we had before and Garden got Largely had right it's mean large, call, can state-of-the-art put there, garden we we've had think grow. and come pet we've

out and of we're both seeing garden to pet us products think I very begin product, to distribute one facility. close

country really shrink looks the thinking total, becoming mixing just consolidating, more in or Garden and not pet, centers continue really across the that of and the efficient. We business to like but what footprint through

And this I to going more garden more allows org better shipments be agile, stage where allows think agile, just be it with on just forward. to us and particularly more side, time, a we're dealing us just the fast-moving in

it. So we're pretty excited about

Operator

And Jim Monness, our question with Chartier from comes next Hardt. Crespi,

James Chartier

On remind Canada? product the tariffs, can China, just you percentage your us sourced of from what and is Mexico

Nicholas Lahanas

combination, is from are coming Mexico and roughly. then Yes. our are X% coming We've And from in inputs about think, got that it roughly we've another X% Canada about, other got that countries. of X% I of China.

Brad Smith

XX% of XX%, totally cost like XX%. So it's

Nicholas Lahanas

abroad. coming That's

James Chartier

could little the and be on think what then will a And then in a the EPS sales in us color would given margin down down just of down, second why it. the down quarter? softer performance you we Got if operating quarter, is EPS first kind XQ like give means more year-over-year year-over-year that margin

Nicholas Lahanas

to the Well, be -- in we're say not every because would from What of is so all, I quarter be first going a get may we've past, wrong away I margin want down. the just guiding to lot. said as

So not I say QX would was. just directionally, be to last what going it's

single probably QX pretty top remember, and you line below beyond we'll role. product I last digits the mix was be think is year's EPS going could If a play timing with of look QX quarter. at we'll But last shipments, the strong, the big into that, to down be the low

QX as margin and We a in role and is to really great there well. going then have of expanding weather every having quarter a intention play

QX. season of early So kick we garden POS see to then And starts in the want to sort really off. when on that's does what

Operator

comes CJS Bob question Labick Securities. from next our And with

Bob Labick

the with side. durable stick to wanted pet I

sight just was goods and obviously, an further. about pet competition. a pandemic Is the little about sales? do You've how the to not growth it some can innovation and see line expectation? drive The of little your recovery? there you getting introduce impact Or sales, of you've talked it dig over we there for down from bit. a you that What's Or potential from is to talked out flat time? can Maybe hard ownership that back

John Hanson

it. still off about kick mid-single-digit was in long certainly, pull believe in Well, categories. in these you new numbers animal, term. believe through working saying, if I'd these about low a huge acquisition animals, seeing we think ownership guinea include categories it no forward the There right? pet we There's And it that to we declines. in that get. like we're and still doubt by that. pet is we're COVID, all that we and And rabbits categories which And see live small growth pigs

got the when buy Durables you live closure, the watering it buy because work buy we through So go you in feeding, that. if with and you filtration, to often animal live animal, aquatics. you're

ball So going say, it. to improving. don't through we to work the have when got to I recover. crystal do see durables "Hey, a But I sequentially, are that's declines

And e-commerce that around goods imports cheap this then and direct really with we And minimis get from in us those And coming de wildcard they cheap really, were closed. that's been at Asia. had thrown tariff.

So and I is will. says believe will, as as will, it back history pick animals will, I impact which And believe then an up, have to do going think all it go certainly, forward. we it that and live we it

to recover see going well. as durables You're

Nicholas Lahanas

durables with innovating sense. are it we makes And where

the of which system. the app with got razor, you they cartridges, of type tanks, the that proprietary goes our we've with only consumable, of concept but Blue filtration think sort fish blade the filtration along have that. you got We've fit is IQ if that some razor So our

mentality how away the of be there. with walking more again, to take into durables because doing to a about the and razor, some innovation razor try categories respect from go So where And are we we're we not they try smart durables the just type good we blade to can. really of important. We're viewpoint there,

Bob Labick

ball. And Okay. Great. the Appreciate of crystal that. speaking

very have balance a obviously strong sheet. You

else. out you said, there now you the make environment just if given was of growth, cetera, like as give like acquisitions curious you'd M&A et could I not everything year, margin an us look but so I'm environment all ask you And the accretive -- How from if to what's M&A you're to the is going something perspective? changed? to macroeconomic this do how going things events and pipeline? do your has How

Nicholas Lahanas

were still currently been kind we a in I right We more deals. discussions now. it's are, of Yes. mean sort with few of anticipatory but

waiting really get is deal and everyone kick flow of think the to going. a lot I bankers. off with There's discussions for been

just I in of anticipation haven't the our but think the as lot market. ton yet, there's I deals think come seen activity level certainly a is desk across that of of We a up.

take I the pipelines feels hopefully, to to that banks think sellers We it like seen And share are others progresses. but starting come together. yet, starting we'll formed. a hard from as haven't are just We're look. hearing it's year being and have to more it

Operator

our question next from Genuity. comes Canaccord And McNamara, Brian

Brian McNamara

guess guess, an one I a last control had I go is over years. this looking I'm the stuff at investor of few wrong have or for lot guys If out Niko. of stock, you the your

ownership. pet had you've weather, had You've

You've you mouth. get had stock bit better on What in of put tires the time? to starting things kind for your the kicking first investors I words It say durables are here, want to like sounds issue. to little but a the would the

Nicholas Lahanas

right. mean that's exactly Yes. would I say I

executing big a through an pandemic the categories. had on COVID the would at had few both pet forward, if We have rough via the pandemic. business, say, teams years. incredible weather John the post pull I and job the some you We of have look mentioned, of done as here

And margin compared other of So lot job. look done good balance really at think that. our you there, a sheet consumer profile we've if reflects out companies the I our a to

it But out of look and great a of would a the around that. come cycle. in you now, we're if your cap, sign things at that. right position, really numbers, to If execution say to point, starting of you I look profitability, that's cash like our at working a like feels bit we're

the we love would have that's very focused say management on our incredibly a team very good future. about We the strong feel And categories. I We business.

to exciting. love the go sheet strong business and after balance then organic a M&A. To me, pretty really accretive some that's So

Operator

comes Teixeira with And our from next Andrea question JPMorgan.

Andrea Teixeira

-- on I leverage please. was expansion X the in you than say have and quarter. notable was from our to don't that the just that had program, outlook provide it's but $XX about is cadence, on clarifications, consensus margin you QX QX, cost a I one pricing the program. Obviously, the One, the as impact you the just doing earlier, of the is model? QX? what it's with offset of quarter, estimates are anticipate second, savings on and the magnitude, Or is what to that the but million fiscal you planning actually X against tariffs? being neutral line. probably better the a in the and would should And expected of say a upside impact more was remainder shipments beat the we with do that follow-ups, operating simplicity against the savings correct, for that about question to your that out you border was understand in come take much in And some leading is there the and -- for how important

Nicholas Lahanas

Yes. you're say I would right.

like to cost to Andrea, guide not quarter, going much again, that be going our out take going us continuing guiding continue we're was going the expansion We're cost to how wrong. just us margin a the part to out and on because, of we're the simplicity, On big year we're take to and we're due down road. to

really about margins and tell you're we in go we're going to as And and folks to we're it, instead to see And optimize continue the the forward. going to going footprint so the business. it

to of to would into and is try go tariffs, In that pricing difficult very be to say I price. going terms take retailers

be going real challenge. that's think a to I

So either really, us about [ see be some going the to to onus to there cost on suppliers cutting. the ] is with work out

we're own out simplicity and cost efforts in cost our We here our have where program. taking

be negative we way have November, think, margin expand going to quarter. we net by pricing we I guided, price, in were that on negative said we think the I in we to million. year think back a about way. So this But $XX taking I And were in

on really really going see don't So made of ton -- and us just I up price in savings And to this and year. cost don't continue think have really, forward. really -- I that's going it's just being execution. I volume good with I a to

John Hanson

echo And, that. just I would

minimize for us. think country our high take. suppliers. with I going Niko pricing difficult our priority of very suppliers look and We've to But to continue at origin working to to looked a be is for as said, is

Andrea Teixeira

seeds not about pull thinking the good going companies on And upside Easter asking in from quarter call third gardening $XX started that be going be the talk more Not any is a to for same gardening holiday. are They're what side folks pace? to understand [indiscernible] okay. make million your like quarter, shift. if is calendar anything it occasions the if impacts calendar. maybe a sure going I the assuming there's on as I'm but like number just more the the fall for the the continue actually it mean, will like been -- I they for the impact is that of it's a of because a to to will forward, obviously, has is lot not on of are because consumption that starting

Nicholas Lahanas

Yes.

conservatively, QX POS, the weather the a the the will on right, guiding anything weather to and performance you're would falls, question to and we component bigger you least, top back as of habit out take -- I I than will be our QX, than probably more say and think, Easter getting affect goods. line, I also play probably quarters, then your to of and though quarter I goes. QX But you really last could even think think where get -- X but live the into that don't it Garden to the will a want role not in

So change things as could progresses. quarter that

J. Walker

Niko, that building favorable earlier -- an to we just off have Easter. Yes, is it us when

this year. far the more than That's So having third But that, Easter late weather week April is having was the end later of of Niko's year, QX March. the impact right, said of a preferable Easter. outweighs it last in at like

late into season that be will getting season peak are We peak though time, May for in us. April, early

Andrea Teixeira

the And And that donated anything then helpful. obviously, should of, in should impact just put the terms I the prepared fair aware it then patch the be appreciate and we amount human that's you like the here? the of you be But like a disaster cognizant obviously, is course, impact of that of as super any fires, of as in remarks. impact. anything we

Nicholas Lahanas

lot anything unfortunate doing a other in we but folks we're can to think were than California. Yes, to everything really people displaced, of down help of can't Southern try we

Operator

And our of William question comes Reuter America. next with from Bank

Unknown Analyst

Rob on for Bill. is This Rigby

question given first from expect a cash forward, uses large share guess, of I we similar what repurchases us. I of absent around are moving moving any appreciate M&A. cash Should do expecting have, you level balance commentary M&A, or the that So similar a cadence you forward? to But the be?

Nicholas Lahanas

want of would in -- well, the we still say business. I will It invest the so share the we repurchase to -- first look at way all,

first place you happen. We we have the a So that to balance. balance look that's you're always big have going to going at size, M&A. to really And when

as CapEx building, around internally like really things that. marketing, demand brand creation, well is Secondly as

of that we always look own A buybacks. at stock lot to do with our is trading. Third stock is where has

at dropped and us way that great support the in us excellent an stock the to pretty and value back back we because you buy aggressively in for it went value had time, we a October. as saw shareholders. to and So really money to Where return view

And to a So but to a going our M&A now, bit truly think to I continue there's those that be are going areas. anticipation, it's right pick up. of be lot X. X little believe Again, I a that will think really up. we're I those pick They see

Unknown Analyst

super pet I And from guess from the be you shipments. maybe you That's that And I But Great. as just into around around guess, going helpful. then optimism second sentiment then your segment, Garden any seeing, season? touch some us, weather, commentary peak around timing appreciate segment of color and well, if maybe I on might maybe retailers. favorable could first,

J. Walker

about to pleased outlook bit of gates Garden little of the that well, season. but a a for the talk and we first We're to I'd the go I'll segment, great performance have in say J.D. is the year. it start keep financial with we're the this out perspective. So

is team the of and still us. a said our I am season front we've many times, year pleased that in at our still level. high we of As really XX% executing have is

So at things our the with for and those happening retailers the upcoming excellence. of support, executing are gaining build, display from retail, that support and fall promotional execution all we're season, inventory

for and feel the about I season. like I So ready very we're good feel that,

also their very are highly the retailers awful drive department. spring lot garden an engaged, the of excited lawn They foot about season. The through traffic and

with retailers they're much that never relationships have better. And been say So, our I'd those very engaged.

very So kudos that upcoming competitive ready marketplace sales that's And for expect that I to. that. a think spoke to it with to in our promotional no surprise. and the be teams that display for spring, I but we're I support

the I last within be earlier, but doesn't and controllable about to if decent our general, -- feel we said about a very in and think was if nature we're And control, feel I think we causal stellar. her this have does So weather. It challenge mother are Those part, have year. It things it, ready. good that factors. we great I

weather year-over-year results whatever So Garden I an to and think like just be better lead should normal improvement for looks year, that segment. the this will

So we're cautiously optimistic.

John Hanson

units something strong got on good nice a a where our more customers in We We've some nice feel say see distribution. the half. distribution back working to with with side, to And we're done good our similar. And to to business our gaps really sales the We're think drive customers. I'd I and pretty relationships opportunities at. gains off with start. we're really job identify We've force going our

So good we really where feel to able a at really good have to we're year. be

where new we're it and we challenge headed. think up? hey, with does, does pet this excited up if does I it get pet acquisition the is, side pick the super pick a when And

Nicholas Lahanas

on pet side. add growth on just to be e-comm, I the area. continues just mean exceptional I'd execution a

John Hanson

built retail direct about are product media, much We to consumer. We flexibility capabilities capability the we have were our get give and how our us e-comm, they around we built more additional to On data stronger invested. content, fulfillment before. analytics than

we're we're all good and So the at. where doing feel really right things

Operator

question next from our comes with And Casella JPMorgan. Carla

Carla Casella

little give on any channel mass wondering us my that about of could a towards still specialty Most stability other? questions side answered, have I'm pet seeing if in color you're seeing you shift but pet more just whether the and you're been if more or channel that mix

John Hanson

new you -- retailers And get John. a looking purchase make as pet that for pets that's consumers Yes, acquisition, specialty. of both from a driven and new the well by pet It's that they're lot when now, understand lot into advice challenged a this to as the right of honestly. go is channel

has traffic pet that customers soft. We So We've relationships that stay a term, the challenged. great close. in with acquisition but -- is the really bit in near related And got channel. new been to it

Operator

next comes Barclays. from with question Holden our And Hale

Hale Holden

I just quick X real had ones.

improvement grow that pet we trend on comps? start of to rate does against can seeing how year-over-year you Are like a really that towards Or look sequential a in On same decline from? the X-year line out stabilized just easier is durables, basis? it flatten

John Hanson

tariff less sequential related talking much pet exception. this on right? also Asia. again, de decline. It's a how minimis still to quantify decline bit of of And, ownership, a year-on-year products is hard that but of coming It's the a But inexpensive basis, a to about it's out

business. I very coming like going to on do it going going and on a certainly hard it's these is to to right our pet but And don't to happen. for websites if believe some how to now. going it's and is positive a go have inexpensive stop, bed can to I impact know at challenging launch that of You to of It's is be That say that Asia. out more just look

Hale Holden

from the in question of Garden some bit then was the maybe the forward got earlier larger I were feedback you've Maybe and customers a than what on the pull but weather December. second pretty was Some and better your heard quarter? Yes, But I direct was loading I customers the you little really bit just call, drove I'm why up your simplistically, sure it. normal. this little covered a in things had guys have is, know this

J. Walker

tracked J.D. that upcoming part, of very the This quarter, is The historically, I'd to the to during the we right shipments to -- But another. stores say larger season. that Sure, the spring end for of customers for Hale. consumption most number set go December, closely shipments one a the at our and always have

that their garden. the usually week lawn setting So go into stores right and in to January. The starts late from and they moved are first And shipments Christmas initial scheduled December.

of our customers pick most our at DCs, Now up distribution centers.

up. are So up those Year, trucks Christmas They predict. of before lot up Christmas, a to and New show to difficult it's so going predict them so to show or for show when difficult day a two us it's between may exactly

shipments than than those orders, trucks had able We anticipated. out less prior more out We shipping get to got the what their were year. X up, we and showed we and had the we days

team. a of we lot chain for what anticipating, shipments. of to December. all what those more came into got supply predicting the play. were We variables were of end that's out kudos in So, drove lot made than the cautious actually But we a us shipments our It

Now it's timing. strictly

December, week spring season. whether purpose, of same to the the So last that driven. first the week and the not the set it's January, It's -- for consumption coming for ships it's it's of stores

come in of most December, out shipments. normalizing the shipments So early likely QX

a all. net gain, So not make difference. Does just that That's timing sense? a

Hale Holden

sense. Niko I'm though. going for this quarter, give the total still beat makes credit to It

Friederike Edelmann

our was after answer today. questions you, call. additional joining Thank for last question. to everyone, Thank any you. This We're have this you might us available

Operator

does teleconference. This participation. thank We today's you. you Thank your conclude for

You lines this may time. at disconnect your

Central Garden & Pet (CENT) 5 Feb 252025 Q1 Earnings call transcript