Central Garden & Pet (CENT): Net Margin Jumps to 5.2%, Reinforcing Profitability Narrative

Central Garden & Pet (CENT) just released its FY 2025 Q4 results, reporting revenue of $678 million and a basic EPS of -$0.16. Over the last year, the company has seen revenue change from $3.2 billion to $3.1 billion, while basic EPS moved up from $1.64 to $2.58. Margins have ticked higher, setting the tone for how investors interpret the latest release.

See our full analysis for Central Garden & Pet.

Now, let's see how these results stack up against the narratives driving Central Garden & Pet’s story in the market. Some views are likely to be reinforced, while others may face a reality check.

See what the community is saying about Central Garden & Pet

Net Margin Gains Outpace Past Years

• Net profit margin climbed to 5.2% over the last twelve months, compared to 3.4% a year earlier. This reflects a substantial improvement in bottom-line performance alongside $3.1 billion in annual revenue.
• Consensus narrative emphasizes that operational streamlining and a focus on premium, sustainable pet and garden products are driving these margin gains and more resilient earnings.
  • Margin improvement supports analysts' view that strategic cost actions and direct-to-consumer investments are working as intended.
  • However, the slower forecasted annual revenue growth of 2.9%, well below the US market’s projected 10.5%, presents a notable tension with the positive margin trend.

Discover how analysts interpret these improvements, what they see ahead, and whether momentum can outlast slower revenue growth. 📊 Read the full Central Garden & Pet Consensus Narrative.

Valuation Discount Remains Unchanged

• The current share price of $34.16 is 19% below the consensus analyst price target of $42.33, while the company's Price-to-Earnings ratio is 13.1x compared to the global household products industry average of 17.5x.
• Consensus narrative notes that this discounted valuation, paired with improved profit margins, makes the stock appear attractively valued on a relative basis despite restrained growth prospects.
  • Analysts point to the 23.9% upside from the current price as an opportunity, provided growth levels meet projections.
  • Tension arises as the future PE ratio implied by 2028 earnings estimates (13.7x) is projected to be lower than the sector PE, prompting investors to balance value against growth risks.

Sustainable Growth or Plateau?

• Earnings rose by 50.2% in the last year, sharply outpacing the company’s own five-year trend. However, both revenue and earnings are projected to grow more slowly than the overall US market at 2.9% and 7.91% annually, respectively.
• The consensus narrative highlights how initiatives such as new DTC facilities, product innovation in premium and eco-friendly categories, and strategic SKU rationalization are expected to support durable growth and margin stability.
  • Investors are encouraged by these catalysts, but analysts caution that execution risks, along with heavy reliance on core US categories and weather patterns, could limit upside if incremental growth does not offset industry-wide challenges.
  • Revenue guidance and declining share count will need to deliver as forecasted to justify analyst expectations for higher earnings by 2028.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Central Garden & Pet on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Does your take on the results differ from the consensus? Put your viewpoint into action by crafting your own narrative in just a few minutes. Do it your way

A good starting point is our analysis highlighting 5 key rewards investors are optimistic about regarding Central Garden & Pet.

See What Else Is Out There

Despite stronger margins, Central Garden & Pet faces slower revenue and earnings growth projections than the broader US market, which suggests limited expansion ahead.

If steady, market-beating growth is your priority, use our stable growth stocks screener (2075 results) to quickly find companies that consistently deliver reliable revenue and earnings gains year after year.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com