Central Garden & Pet (CENT) risk factors, FY2025 10-K

Other

1. 01Economic uncertainty and other adverse macro-economic conditions, including interest rate fluctuations and tariffs, may harm our business36% rewritten
2. 02Tariffs or a global trade war could increase the cost of our products, which could adversely impact the competitiveness of our products and our financial results65% rewritten
3. 03High energy prices could adversely affect our operating results24% rewritten
4. 04A decline in consumers’ discretionary spending or a change in consumer preferences could reduce our sales and harm our business26% rewritten
5. 05Our operating results and cash flow are susceptible to fluctuations
6. 06Our lawn and garden sales are highly seasonal and subject to adverse weather and climate change
7. 07We are in the process of implementing our Central to Home strategy, which could result in increased expenses over the next few years
8. 08If we are unable to execute on our Cost and Simplicity Agenda, our ability to maintain or grow margins may be negatively impacted
9. 09Seeds and grains we use to produce bird feed and grass seed are commodity products subject to price volatility that could have a negative impact on us
10. 10We are subject to significant risks associated with innovation, including the risk that our new product innovations will not produce sufficient sales to recoup our investment45% rewritten
11. 11We depend on a few customers for a significant portion of our business54% rewritten
12. 12We may be adversely affected by trends in the retail industry
13. 13If we underestimate or overestimate demand for our products and do not maintain appropriate inventory levels, our results of operations and financial condition could be negatively impacted
14. 14Supply disruptions in pet birds, small animals and fish may negatively impact our sales
15. 15Competition in our industries may hinder our ability to execute our business strategy, increase our profitability or maintain relationships with existing customers
16. 16We continue to implement enterprise resource planning information technology systems
17. 17Some of the products that we manufacture and distribute require governmental permits and also subject us to potential environmental liabilities
18. 18Deterioration in operating results could prevent us from fulfilling our obligations under the terms of our indebtedness or impact our ability to refinance our debt on favorable terms as it matures

Risks Relating to Acquisitions

1. 19Our acquisition strategy involves a number of risks
2. 20These risks could have a material adverse effect on our business, results of operations and financial condition
3. 21If our goodwill, indefinite-lived intangible assets or other long-term assets become impaired, we will be required to record impairment charges, which may be significant49% rewritten

General Risks

1. 22Our success depends upon our retaining and recruiting key personnel33% rewritten
2. 23A significant information security or operational technology incident, including a cyber attack or data breach, could disrupt our operations and adversely impact our operating results, cash flows and reputation80% rewritten
3. 24Our inability to protect our trademarks and any other proprietary rights may have a significant, negative impact on our business
4. 25The products that we manufacture and distribute could expose us to product liability claims
5. 26We have unresolved litigation which could adversely impact our operating results25% rewritten
6. 27The adoption of new tax legislation, unanticipated changes in our tax provisions, or exposure to additional tax liabilities could affect our profitability and cash flows

Risks Relating to our Capital Stock

1. 28We do not expect to pay cash dividends in the foreseeable future
2. 29We may issue additional shares of our common stock or Class A common stock that could dilute the value and market price of our stock
3. 30Our Chairman and founder, through his holdings of our Class B common stock, exercises effective control of the Company, which may discourage potential acquisitions of our business and could have an adverse effect on the market price of our stock
4. 31We have authorized the issuance of shares of common stock, Class A common stock and preferred stock, which may discourage potential acquisitions of our business and could have an adverse effect on the market price of our common stock and our Class A common stock