Central Garden & Pet Q2 Revenue Climbs 8.6% to $906M, EPS $1.28; Forms 80/20 JV
Q2 net sales rose 8.6% to $906M from $834M, gross margin increased to 33.1%, operating income was $114M and EPS hit $1.28 up from $0.98. Central Garden & Pet formed an 80/20 joint venture with Phillips for pet distribution, affirmed 2026 EPS guidance of $2.70+ and held $653M cash.
1. Q2 Financial Highlights
Central Garden & Pet reported net sales of $906 million in Q2 fiscal 2026, up 8.6% year‐over‐year, with gross margin expanding 30 basis points to 33.1%. Operating income reached $114 million, driving diluted EPS of $1.28 compared with $0.98 in the prior year.
2. Segment Performance
Pet segment sales increased to $477 million, lifting operating margin to 16.3% and adjusted EBITDA to $89 million. Garden segment sales grew to $429 million with operating income of $66 million and adjusted EBITDA of $76 million, bolstered by new listings in grass and fertilizer.
3. Pet Distribution Joint Venture
The company formed a joint venture with Phillips to handle pet distribution nationwide, retaining a 20% ownership stake. The 80/20 structure is designed to streamline operations, improve distribution efficiency and allow Central to focus on its branded portfolio.
4. Liquidity, Debt and Guidance
Cash and equivalents reached $653 million with no borrowings under the credit facility and gross leverage at 2.8x. The company reaffirmed fiscal 2026 non‐GAAP EPS guidance of $2.70 or better and authorized $128 million remaining for share repurchases.