Our record bottom line performance underscores the strength of our business model, the rigor of our execution, and the relentless commitment of Team Central. Second, we continue to strengthen our foundation by streamlining operations, consolidating facilities, optimizing our portfolio, and driving efficiencies that enhance our cost structure and position us for sustained profitable growth. At the same time, we continue to deliberately reduce our exposure to low-margin, durable products in both pet and garden. A strategic move that, while creating short-term top-line pressure, strengthens our portfolio and positions us for sustainable, profitable growth.
We ended the year with record results, a fortress balance sheet, and strong momentum as we head into fiscal 2026. Our initiatives continue to deliver measurable, sustainable benefits, enhancing productivity, expanding margins, and positioning us to fuel future growth. Our diversified portfolio, operational agility, and prudent cost management give us confidence in our ability to deliver profitable growth despite current global macro environment and policy shifts. After incorporating these factors and our operating plans, we expect fiscal 2026 non-GAAP earnings per share to be $2.70 or better, supported by margin expansion and operational performance.
As always, our outlook excludes potential impacts from acquisitions, divestitures, or restructuring actions, including activities related to our ongoing cost and simplicity agenda. We're combining the agility of a startup with the strength and scale of a category leader, empowering business units to innovate quickly while leveraging Central's operational and financial capabilities to accelerate growth. Looking ahead, we'll continue to balance sensible cost and cash management with targeted investments that fuel organic growth, particularly in innovation, e-commerce, and digital technology. We're actively pursuing margin-accretive consumable businesses that complement our portfolio and expand our presence in attractive categories.
| Metric | Period | Current guidance |
|---|---|---|
| Non-GAAP EPS | FY2026 | $2.70 or better (Initiated) |
| Gross tariffs | Q4 FY2025 | Roughly $7 million to $8 million |
| Pricing | FY2026 | About 1% to offset tariffs and commodity exposure |
| Metric | YoY | Note |
|---|---|---|
| Full-year net sales | -2% to $3.1 billion | Deliberate exits of lower-margin durables and U.K. operations plus garden distribution transition to direct-to-retail |
| Full-year non-GAAP gross margin | +210 bps to 32.1% | Productivity initiatives across both segments |
| Full-year non-GAAP operating income | +$42 million to $265 million | Structural cost improvements and strong execution |
| Full-year non-GAAP net income | +22% to $174 million | Margin expansion and lower interest and other expense |
| Full-year non-GAAP EPS | +$0.60 to $2.73 | Record profitability exceeding guidance |
| Full-year adjusted EBITDA | +$37 million to $371 million | Operational execution |
| Q4 net sales | +1% to $678 million | Strength in garden from extended selling season |
| Q4 garden net sales | +7% to $250 million | Favorable Q4 weather, additional product placements, and strong retail execution |
| Q4 pet net sales | -2% to $428 million | U.K. closure and lower durable sales, partially offset by animal health growth |
| Q4 non-GAAP gross margin | +310 bps to 29.1% | Lapping prior-year grass seed inventory charge; productivity offset initial tariff impact |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Cost and Simplicity / network design | Ongoing consolidation | Multi-year supply chain project largely complete; 16 legacy facilities closed | Maturing |
| Margin expansion outlook | Dramatic recent gains | More modest expansion expected in FY2026 as low-hanging fruit is picked | Decelerating |
| Pet durables | Declining double-digits | Still ~16% of pet sales, double-digit Q4 decline, much from proactive SKU exits | Declining (intentional) |
| Pet ownership / live animals | Stabilizing | Stable to up slightly; live animal business posted ~1% gain in Q4 | Improving |
| Tariffs | Roughly $10 million FY2025 (bulk Q4) | Gross Q4 tariffs ~$7-$8 million; mitigation actions beginning to flow through | Managed |
| M&A pipeline | Muted, cautiously optimistic | Keeping dry powder, actively hunting margin-accretive pet consumables | Improving |