CENTA lifts profit outlook, expands pet business with Trixie deal
Cost cuts and portfolio shift lift margins Central's Cost and Simplicity program and the exit from low-margin pet distribution pushed gross margin up sharply. Even though total sales fell 8%, organic sales rose 2% and profit margins improved, showing the business is becoming more profitable on what it sells.
Margin expansion is the main reason profit guidance was raised despite weaker sales.
Full-year profit guidance raised twice Management now expects adjusted earnings of $2.85 per share or better for fiscal 2026, up from $2.70. The raise came after a record $327 million in quarterly operating cash flow and net leverage at an all-time low of 0.5 times, giving the company room to invest and buy other businesses.
Higher guidance and a strong balance sheet directly support the stock's value.
Trixie acquisition expands European pet presence Central agreed to buy an 80% stake in German pet-treat maker Trixie for up to €400 million, moving deeper into premium pet products. The deal is expected to close in the first half of fiscal 2027 and management says more acquisitions are being considered.
The Trixie deal is a major strategic move that broadens CENTA's pet portfolio and growth prospects.
Sales decline and weak peer comparison Total revenue fell 8.2% year over year, the slowest growth among household-product peers like Spectrum Brands and WD-40. The drop is mostly from exiting the pet distribution business, but it still makes Central look like a laggard on the top line.
This is the main counterweight: weaker sales growth could worry investors even as profits rise.