We advanced our operational optimization efforts, consolidating our footprint, refining our portfolio, and improving our cost structure, setting the stage for long-term growth. Third, we remain confident in our full-year outlook, even as we navigate a complex and fluid macro-economic environment. Our team's strong execution led to record Q3 and year-to-date GAAP and non-GAAP EPS, significant margin expansion, and a major improvement in workplace safety performance within the company. These initiatives enhance our operational efficiency, unlock organic growth potential, and support our commitments to environmental stewardship and corporate responsibility.
We posted record third quarter and year-to-date results, outpacing the prior year. Internally, we expect tariff-related inflationary pressures to intensify, especially in our pet segment. Nevertheless, we are reaffirming our fiscal 2025 non-GAAP EPS guidance of approximately $2.60. This outlook excludes potential impacts from acquisitions, divestitures, or restructuring initiatives that may arise in Q4, including actions related to our ongoing Cost and Simplicity Program.
At the same time, we leverage Central's scale to accelerate innovation and market share growth. Looking ahead, we remain focused on disciplined cost and cash management while making targeted investments to drive organic growth, especially in e-commerce, digital technology, and innovation. Nevertheless, we remain disciplined in our pursuit of margin accretive opportunities, particularly in consumables, and are cautiously optimistic that the pipeline will strengthen. Gross profit of $332 million increased 5%, while gross margin expanded by 280 basis points to 34.6%.
| Metric | Period | Current guidance |
|---|---|---|
| Non-GAAP EPS | FY2025 | Approximately $2.60 (Reaffirmed) |
| Total tariff impact | FY2025 | Roughly $10 million (bulk in Q4) |
| Metric | YoY | Note |
|---|---|---|
| Net sales | -4% to $961 million | Loss of two garden distribution product lines, cool and rainy weather, and soft pet durables demand |
| Gross profit | +5% to $332 million (margin +280 bps to 34.6%) | Successful execution of the Cost and Simplicity Program |
| Non-GAAP operating income | +9% to $139 million (margin +170 bps to 14.5%) | Margin expansion and cost discipline |
| Non-GAAP net income | +11% to $98 million | Margin improvement and lower interest expense |
| Non-GAAP EPS | +18% to $1.56 | Record Q3 profitability |
| Adjusted EBITDA | +$11 million to $167 million | Operational momentum across the business |
| Pet segment net sales | -3% to $493 million | Exit of lower-margin durable products and customers, partially offset by professional and pet distribution growth |
| Garden segment net sales | -4% to $468 million | Exit of two distribution product lines and weather-impacted seasonal categories |
| Garden non-GAAP operating income | +$12 million (margin +310 bps to 18.2%) | Solid productivity gains |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Cost and Simplicity Program | Ongoing facility consolidation | 20 locations consolidated into five DTC-enabled hubs; new Salt Lake City facility shipping next month | Advancing |
| Consumables mix in pet | 79% a year ago | 82% of total pet sales | Improving |
| Tariff exposure | Limited Q3 impact due to pre-tariff inventory | Expected to intensify in Q4, especially in pet | Worsening near-term |
| China sourcing | Largest country for tariffable imports | Purchases reduced nearly 50% year-over-year in Q3 | Improving |
| M&A pipeline | Muted deal activity in core categories | Cautiously optimistic; plan to accelerate in 2026 | Improving |