Central Garden & Pet Company

Ladies and gentlemen, thank you for standing by. Welcome to Garden and Pets Fiscal 2025 First Quarter Earnings Call. My name is Julian, and I'll be your conference operator for today. At this time, all participants are in a listen-only mode. Following prepared remarks, we will hold a question and answer session, and instructions will be given at that time. If you require assistance at any point during the call, please press star zero on your touch phone keypad. As a reminder, this conference call is being recorded. I will now turn the call over to Frederic Edelman, Vice President, Investor Relations. Please proceed.

Good afternoon, everyone, and thank you for joining Central's first quarter fiscal 2025 earnings call. Joining me today are Nicola Hannes, Chief Executive Officer, Brad Smith, Chief Financial Officer, John Hansen, President of Pet Consumer Products, and J.D. Walker, President of Garden Consumer Products. In a moment, Nico will share today's key takeaways, followed by Brad, who will discuss these in more detail. After their prepared remarks, JD and John will join us for our Q&A session. Before we begin, I would like to remind everyone that all forward-looking statements made during this call are subject to risks and uncertainties that could cause our actual results to differ materially from what those forward-looking statements express or imply today. A detailed description of Central's risk factors can be found in our annual report filed with the SEC. Please note that Central undertakes no obligation to publicly update forward-looking statements to reflect new information, future events, or other developments. Our press release and related materials, including a gap reconciliation for the non-gap measures discussed on this call, are available on ir.central.com. Lastly, unless otherwise specified, all growth comparisons discussed during this call are made against the same period in the prior year. If you have any further questions after the call or any point during the quarter, please feel free to reach out to me directly. And with that, let's begin. Nico?

Thank you, Frederic. And good afternoon, everyone. Thank you for taking the time to join us today. I'd like to begin by highlighting the three key takeaways from this call. First, a strong start to the fiscal year, thanks to excellent execution by Team Central. Second, steady progress in simplifying our business and driving efficiency through footprint rationalization, portfolio optimization, and cost structure improvements. And third, confidence in our outlook for the year. Now let me expand on these points. First quarter achievements. We delivered a solid performance in the first quarter, with growth in both earnings per share and net sales. This was driven by timing of shipments across pet and garden categories and channels, supported by favorable weather conditions for the garden business, and timing of promotional activities in our pet business. Most notably, margins improved due to disciplined cost management and easing inflationary pressures. We're particularly encouraged by the robust continued growth in e-commerce, which reflects our enhanced digital capabilities. These achievements are a testament to the dedication and hard work of Team Central. Their grit and unwavering commitment drive our success. And because of them, we're building an even stronger future. Second, cost and simplicity program. Our cost and simplicity program drives meaningful results. Initiatives implemented in prior periods are yielding tangible benefits. and we continue to roll out new projects. Highlights for the first quarter include distribution optimization. Our new distribution center in Covington, Georgia has now been operational for over 100 days. This facility replaced seven legacy facilities, significantly reducing our distribution footprint while increasing efficiency. Safety and productivity enhancements across all BU's We've implemented measures to improve safety, particularly within our merchandising teams. These efforts have boosted productivity and overall output. E-commerce expansion. We recently expanded our e-commerce operations to Easton, Pennsylvania. This new facility strengthens our ability to manage and fulfill our own direct-to-consumer business, as well as drop shipments for retail partners more effectively. These initiatives are part of our broader strategy to make Central leaner, more agile, and more efficient, positioning us for margin expansion while freeing up resources to support organic growth, strategic M&A, and our commitment to social responsibility and environmental stewardship. On that note, we're proud to share some of our business units and teams have collaborated to support several animal welfare organizations assisting communities impacted by the wildfires in the Los Angeles area. Our contributions include essential pet supplies such as dog beds, training pads, food and toys, along with a cash donation to LA County Animal Care and Control and Best Friends Animal Society. Third, our outlook for the fiscal year. We're confident in our strategy. Our team is and the deliberate actions we're taking to drive sustainable and profitable growth in fiscal 2025 and beyond. As such, we're reaffirming our fiscal 2025 guidance for non-GAAP EPS of $2.20 or higher, maintaining our focus on delivering long-term value. Looking ahead, we'll continue to exercise disciplined cost and cash management while strategically investing in critical capabilities, particularly in e-commerce, digital, and innovation. Our strategic M&A efforts remain focused on enhancing growth priorities, expanding capabilities, and strengthening our portfolio. That said, we recognize the complexity of the external environment, which includes macroeconomic and geopolitical uncertainties, such as potential tariffs. Additionally, we expect ongoing consumer pressure, a competitive marketplace driven by promotions and challenges in the brick and mortar retail sector. In the garden business, we anticipate continued volatility from extreme weather patterns as a potential new normal. With the 2025 garden season still ahead of us, we're cautious not to over-interpret first quarter results, especially given the significant benefit from the favorable timing of shipments. As retailers work through existing inventories, we anticipate a softer second quarter than last year. With that, I'll turn it over to Brad.