Central Garden & Pet Company

Ladies and gentlemen, thank you for standing by. Welcome to the Central Garden and Pets fiscal 2026 second quarter earnings call. My name is Kate 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 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 followed by the 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 Frederic Edelman, Vice President, Investor Relations. Please go ahead.

Good afternoon, everyone, and thank you for joining Central's second quarter fiscal 2026 earnings call. Joining me today are Nicola Hannas, Chief Executive Officer, Brad Smith, Chief Financial Officer, John Hansen, President, Pet Consumer Products, J.D. Walker, President, Garden Consumer Products, and last but not least, Jason Barnes, Executive Vice President, Garden Consumer Products. Nico will start by sharing today's key takeaways, followed by Brad, who will provide more details of our performance. After their prepared remarks, John, J.D., and Jason 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 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. You can find our press release and related materials 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. Should any questions come up after the call or throughout the quarter, don't hesitate to contact me directly at ir.central.com. And with that, let's begin. Nico, over to you.

Thank you, Frederique, and good afternoon, everyone. I'll start with highlights from the second quarter and then walk through how we're thinking about the rest of the year. We delivered a record second quarter and a record first half with clear improvement across the board. higher sales, expanded operating margins, and stronger earnings per share versus last year. That performance reflects resilience across our key categories, the strength of our operating model, and the actions we've taken to sharpen execution. At the same time, we're continuing to simplify the business in ways that also strengthen our teams and execution. We've moved our Do My Own business into our Covington Fulfillment Center, which is improving speed, lowering costs, and increasing flexibility across the network. We're also consolidating the TDBVS manufacturing into our dog and cat platform in New Jersey to better leverage scale and what we believe are best in category capabilities. And subsequent to the quarter, we formed a joint venture with the leading U.S. pet food distributor, Phillips Pet Food and Supplies, where we'll retain a 20% ownership stake. This is a strategic step which creates a stronger, more agile nationwide distribution network, reduces complexity, and allows us to focus more directly on growing our central branded portfolio. These moves build on the cost and simplicity work we've been driving for several years. That work has fundamentally strengthened the business. Today, we're more efficient, more resilient, and a better run organization. and that discipline is embedded in how we operate. With that foundation in place, our focus is squarely on growth and disciplined capital allocation. We're investing where we see the highest returns, and with our balance sheet and customer relationships, we're well positioned to execute. We also advanced our innovation pipeline this quarter. We're bringing forward new products, both branded and private label, that deepen retailer partnerships and connect with consumers. In pet, that includes Nylabone dog chews made with real meat and Farnum's Indoor Gold Killer Fly Mosquito Control Spray for horses. In garden, our recently launched The Rebel Sun and Shade Extension and Grass Seed and new private label programs are performing well and delivering above expectations. Turning now to our outlook. We enter the back half of the year with momentum and a clear focus on execution. Our diversified portfolio, operational flexibility, and disciplined approach to cost management and capital allocation position us well to deliver profitable growth as the macro backdrop continues to evolve. The retail environment remains dynamic, with consumers looking for value and performance and continued shifts towards e-commerce and, in some categories, private labels. We're responding with targeted investments behind our strongest brands, innovation and consumer insights, while continuing to strengthen our digital capabilities. These are the right investments. They are gaining traction, positioning us to drive both growth and margin expansion. While we are still early in our journey, innovation will become a more meaningful contributor as we continue to scale a more streamlined and efficient operating model. M&A remains a key lever. We're taking a disciplined, value-driven approach focused on high-quality, margin-accretive opportunities that strengthen our portfolio. With our liquidity and flexibility, we're well-positioned to act when the right opportunities arise. On the joint venture, as expected, it will reduce reported revenue in the second half by a low team's percentage, but with minimal impact on earnings, given the lower margin profile of that business. Based on our performance and outlook, we are maintaining our guidance for fiscal 2026 non-GAAP diluted EPS of $2.70 or better. That reflects both what we've delivered and our confidence in the path ahead. As always, this guidance excludes the impact of future acquisitions, divestitures, or restructuring actions. Before I hand it over to Brad, I just want to recognize our teams across Central. Their execution continues to set the pace for the organization. We've built a strong foundation and we're moving forward with focus, discipline, and a confidence in our ability to deliver long-term growth and value. And with that, I'll turn it over to Brad. Brad? Thank you, Nico.