Central Garden & Pet hits Q3 sales of $996 million

Central Garden & Pet Company's financial results for its fiscal 2024 third quarter ended June 29, 2024 include net sales of $996 million. That's compared to $1,023 million a year ago, a decrease of 3%. Organic net sales also decreased 3%.

Gross profit was $317 million compared to $318 million a year ago. Gross margin expanded by 70 basis points to 31.8%. On a non-GAAP basis, gross margin expanded by 80 basis points to 32.7% driven by the company's "Cost and Simplicity" program and moderating inflation.

Operating income was $116 million compared to $123 million a year ago, a decrease of 6%. Operating margin was 11.6% compared to 12.0% a year ago. On a non-GAAP basis, operating margin was 12.8% compared to 13.4% in the prior year.

Net interest expense was $10 million compared to $13 million a year ago.

Net income was $80 million compared to $83 million in the prior year, a decrease of 4%. Non-GAAP net income was $88 million compared to $94 million a year ago. Earnings per share were $1.19 compared to $1.25 in the prior year, a decrease of $0.06. Adjusted EBITDA was $156 million compared to $166 million a year ago.

The effective tax rate was 24.0% compared to 24.4% in the prior year.

Given the recent significant decrease in market prices for grass seed, Central determined in August 2024 it will be necessary to write down the value of its grass seed inventory. In the third quarter of fiscal 2024, Central also began winding down its pottery business.