Pet company Central Garden & Pet (NASDAQ: CENT) fell short of the market’s revenue expectations in Q4 CY2025, with sales falling 6% year on year to $617.4 million. Its non-GAAP profit of $0.21 per share was 51.8% above analysts’ consensus estimates.

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We delivered a solid start to the fiscal year, with disciplined execution across the business, particularly when measured against a strong prior-year first quarter,” said Niko Lahanas, CEO of Central Garden & Pet.

Company Overview

Enhancing the lives of both pets and homeowners, Central Garden & Pet (NASDAQ: CENT) is a leading producer and distributor of essential products for pet care, lawn and garden maintenance, and pest control.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.

With $3.09 billion in revenue over the past 12 months, Central Garden & Pet carries some recognizable products but is a mid-sized consumer staples company. Its size could bring disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale.

As you can see below, Central Garden & Pet’s revenue declined by 2.2% per year over the last three years, a poor baseline for our analysis.

This quarter, Central Garden & Pet missed Wall Street’s estimates and reported a rather uninspiring 6% year-on-year revenue decline, generating $617.4 million of revenue.

Looking ahead, sell-side analysts expect revenue to grow 1.4% over the next 12 months. While this projection suggests its newer products will catalyze better top-line performance, it is still below the sector average.

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Cash Is King

Although earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can’t use accounting profits to pay the bills.

Central Garden & Pet has shown robust cash profitability, giving it an edge over its competitors and the ability to reinvest or return capital to investors. The company’s free cash flow margin averaged 10.2% over the last two years, quite impressive for a consumer staples business.

Taking a step back, we can see that Central Garden & Pet’s margin dropped by 1.8 percentage points over the last year. This decrease warrants extra caution because Central Garden & Pet failed to grow its revenue organically. Its cash profitability could decay further if it tries to reignite growth through investments.

Central Garden & Pet burned through $81.03 million of cash in Q4, equivalent to a negative 13.1% margin. The company’s cash burn was similar to its $74.93 million of lost cash in the same quarter last year. These numbers deviate from its longer-term margin, indicating it is a seasonal business that must build up inventory during certain quarters.

Key Takeaways from Central Garden & Pet’s Q4 Results

It was good to see Central Garden & Pet beat analysts’ EPS expectations this quarter. We were also excited its EBITDA outperformed Wall Street’s estimates by a wide margin. On the other hand, its revenue slightly missed and its full-year EPS guidance fell short of Wall Street’s estimates. Overall, this print was mixed but still had some key positives. Investors were likely hoping for more, and shares traded down 2.4% to $34.26 immediately following the results.

Should you buy the stock or not? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).