Central Garden & Pet Company

Ladies and gentlemen, thank you for standing by. Welcome to Central Garden and Pets' fourth quarter and fiscal 2025 earnings call. My name is Paul, and I will be your conference operator for today. At this time, all participants are in a listen-only mode. Following the prepared remarks, we'll 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 the star followed by zero on your touch-tone phone. As a reminder, this conference call is being recorded. I would now like to turn the call over to Frederique Edelman, Vice President, Investor Relations. Please go ahead.

Good afternoon, everyone, and thank you for joining Central's fourth quarter and fiscal year 2025 earnings call. Joining me today are Nico Lahanas, Chief Executive Officer, Brad Smith, Chief Financial Officer, John Hansen, President of Pet Consumer Products, and JD Walker, President of Garden Consumer Products. Nico will start by sharing today's key takeaways, followed by Brad, who will provide a more in-depth discussion of our results. After their prepared remarks, JD and John will join us for the Q&A session. Before they begin, I would like to remind everyone that all forward-looking statements made during this call are subject to risk 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 these forward-looking statements to reflect new information, future events, or other developments. All press release and related materials, including gap reconciliation for the non-gap measures discussed on this call, are available at ir.central.com. Last but not least, unless otherwise specified, all comparisons discussed during this call are made against the same period in the prior year. If you have any questions after the call or at any time during the quarter, please don't hesitate to contact me directly. And with that, let's get started.

Nico? Thank you, Frederic, and good afternoon, everyone. I'd like to begin by highlighting three themes we will focus on today. First, fiscal 25 was a year of meaningful progress and tangible accomplishments across Central. 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. And third, as we enter fiscal 26, we're energized by our momentum and the opportunities ahead. Powered by our central-to-home strategy and sharp, disciplined execution, we're poised to accelerate our long-term agenda with even greater focus and agility. Now let me expand on each of these points. First, our fiscal 25 achievements. Thanks to the hard work and dedication of our more than 6,000 employees, we closed the year with expanded gross margins, record EBITDA, and record earnings per share. These results underscore the strength and resilience of our business model, as well as the drive and commitment of our people. We delivered consistent performance while advancing portfolio optimization and maintaining disciplined cost management. Throughout the period, we upheld operational rigor, streamlined our footprint, and drove efficiency initiatives across both segments. We also navigated variable weather conditions by simplifying our business and tightly managing costs, actions that have made our model even more resilient and predictable. Results reflected the transition of two third-party product lines in our garden distribution business to a direct-to-retail model 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 of fortress balance sheet and strong momentum as we head into fiscal 26. Second, advancing our cost and simplicity agenda. Our initiatives continue to deliver measurable, sustainable benefits, enhancing productivity, expanding margins, and positioning us to fuel future growth. We've largely completed our multi-year supply chain network design project, a major milestone that has strengthened customer alignment, increased service speed, and improved cost efficiency across our logistics network. The project also established enterprise-wide e-commerce fulfillment capabilities and modernized our distribution footprint. Together with the sale of our garden distribution business and the intentional exit of the pottery business, this work has enabled us to close 16 legacy facilities to date. By the end of the calendar year, we will be operating a modern high-performing infrastructure anchored by DTC-enabled fulfillment centers in Salt Lake City, Easton, Pennsylvania, and Covington, Georgia, a network built for speed, efficiency, and growth. Across our footprint, systems and processes, we're streamlining operations, boosting productivity, and freeing up resources to reinvest in the business. These actions are making Central simpler, stronger, and better positioned to scale, creating a more resilient, cohesive, and predictable company that delivers consistent performance, adapts with flexibility, and is poised to capture the full potential of the opportunities ahead. Third, outlook for fiscal 26. We entered the year with strong momentum, clear priorities, and a unified focus on delivering results. 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, we expect consumers to remain focused on value and performance with a promotionally active but stable retail environment and continue channel shifts from pet specialty to e-commerce. We're delivering with precision to offset cost inflation, tariffs, and supply chain complexity through productivity gains driven by our cost and simplicity agenda and pricing discipline. After incorporating these factors and our operating plans, we expect fiscal 26 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 remain confident that the central-to-home strategy is the right path and the foundation for long-term value creation. 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 operational and financial capabilities to accelerate growth. By sharing tools, data, and talent across the organization, we're building a connected enterprise. one that learns faster, executes smarter, and compounds its competitive advantage over time. This approach enables us to bring new ideas to the consumer faster, capture opportunities sooner, and scale what works across our platform. 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 technologies. A key priority is making our data AI-ready, improving accessibility, quality, and integration to generate deeper insights and unlock meaningful value and competitive advantage across the business. These strategic investments are already translating into stronger innovation momentum. Recent launches highlight how we're combining insights, performance, sustainability, and consumer impact. Examples include Wild Bird Feed, a redesigned Pennington Feeding Frenzy and 3D Pro lines that elevate visibility and engagement both online and at retail, supported by a robust digital marketing program. Worry-Free 30% Vinegar, a high-performance, multi-purpose cleaner six times stronger than standard vinegar. Barnum Endure Goldfly Spray, a next-generation EPA-approved formula that delivers long-lasting and highly effective fly control, bringing advanced performance and care to horse owners. In parallel, M&A remains a strategic lever for growth. We're actively pursuing margin-accretive consumable businesses that complement our portfolio and expand our presence in attractive categories. While market engagement has increased, deal flow in our core categories remains somewhat limited. We expect activity to accelerate as market conditions continue to improve. I want to thank our team across Central for a record year of meaningful progress and unwavering focus. We've done a tremendous amount of foundational work, and as a result, we're entering fiscal 26 with a business performing at a very high level. With strong financial flexibility and an improving M&A landscape, we're confident in the road ahead. That confidence is reinforced by the strength of our retail partnerships, which continue to deepen and drive mutual growth. As recognition of that strength, we were honored to be named Lowe's' Lawn and Garden Vendor Partner of the Year, and KT was recently recognized with the NCAPS 2025 Pet Amazon Best-in-Class PDP Award for Excellence in Product Content and Presentation. And with that, I'll hand it over to Brad. Brad?