Willem

Willem, on behalf of Bob Labick, asked about the company's trajectory towards top-line growth, specifically if they are positioned to lap SKU rationalizations in the second half and if other factors might limit near-term top-line expansion. He also inquired about the company's balance sheet strength and capacity for both M&A and share repurchases.

Answer

Brad Smith, CFO, expressed optimism for the second half, anticipating top-line growth by Q4 despite ongoing SKU rationalization headwinds. He confirmed the company's ability to pursue both M&A and share repurchases simultaneously, noting that substantial cash is earmarked for M&A, while opportunistic share repurchases continue to return value to shareholders.

Willem asked about the company's trajectory for top-line growth, specifically whether Central Garden & Pet is positioned to overcome SKU rationalization headwinds and achieve growth in the second half of the fiscal year, excluding weather impacts. He also inquired about Central Garden & Pet's capacity for M&A versus share repurchases, given its strong balance sheet, and whether the company can pursue both strategies concurrently.

Answer

Brad Smith, CFO, expressed optimism for the second half, expecting to start growing the top line by Q4 despite ongoing SKU rationalization headwinds. He confirmed the company can pursue both M&A and share repurchases concurrently, noting plans to increase M&A activity using cash on the balance sheet and continuing opportunistic share repurchases, citing significant buybacks in the previous year and current quarter.