SCOTTS MIRACLE-GRO CO

Previous wording

Due to the seasonal nature of the consumer lawn and garden business, significant portions of our U.S. Consumer and Other segment net sales ship to our retail customers during our second and third fiscal quarters, as noted in the following table. Our annual net sales are further concentrated in the second and third fiscal quarters by retailers who rely on our ability to deliver products closer to when consumers buy our products. Our Hawthorne segment is also impacted by seasonal sales patterns for certain product categories due to the timing of growing patterns in North America during our second and third fiscal quarters, and the timing of certain controlled agricultural lighting project sales during our third and fourth fiscal quarters.

Current wording

Due to the seasonal nature of the consumer lawn and garden business, significant portions of our U.S. Consumer and Other segment net sales ship to our retail customers during our second and third fiscal quarters, as noted in the following table. Our annual net sales are further concentrated in the second and third fiscal quarters by retailers who rely on our ability to deliver products closer to when consumers buy our products.

Previous wording

During the three and six months ended March 29, 2025, our Hawthorne segment continued to experience decreased sales volume. This was partially attributable to an oversupply of cannabis, which has led to a prolonged period of lower cannabis wholesale prices and reduced indoor and outdoor cannabis cultivation. The oversupply has been driven by increased licensing activity across the U.S. and significant capital investment in the cannabis production marketplace over the past several years, as well as inconsistent enforcement of regulations. We expect that the oversupply of cannabis will continue to adversely impact our Hawthorne segment. If the oversupply of cannabis persists longer, or is more significant than we expect, our results of operations could be materially and adversely impacted for a longer period and to a greater extent than we currently anticipate.

Current wording

During the three and nine months ended June 28, 2025, our Hawthorne segment continued to experience decreased sales volume. This was partially attributable to an oversupply of cannabis, which has led to a prolonged period of lower cannabis wholesale prices and reduced indoor and outdoor cannabis cultivation. The oversupply has been driven by increased licensing activity across the U.S. and significant capital investment in the cannabis production marketplace over the past several years, as well as inconsistent enforcement of regulations. We expect that the oversupply of cannabis will continue to adversely impact our Hawthorne segment. If the oversupply of cannabis persists longer, or is more significant than we expect, our results of operations could be materially and adversely impacted for a longer period and to a greater extent than we currently anticipate.

Previous wording

During fiscal 2024, our Hawthorne segment discontinued distribution of other companies’ products in order to shift its focus solely to marketing, innovating and supporting its portfolio of Signature brands, including General Hydroponics®, Gavita®, Botanicare®, Gro Pro®, Mother Earth®, Grower’s Edge®, HydroLogic Purification System®and CYCO®. The discontinuation of sales of other companies’ products has resulted in lower sales volume when compared to historical periods, but has enabled continued optimization of Hawthorne’s operations and improvement of its profitability.

Current wording

During fiscal 2024, our Hawthorne segment discontinued distribution of other companies’ products in order to shift its focus solely to marketing, innovating and supporting its portfolio of Signature brands. The discontinuation of sales of other companies’ products has resulted in lower sales volume when compared to historical periods, but has enabled continued optimization of Hawthorne’s operations and improvement of its profitability.

Previous wording

The following table sets forth the components of earnings as a percentage of net sales for the six months ended March 29, 2025 and March 30, 2024:

Current wording

The following table sets forth the components of earnings as a percentage of net sales for the nine months ended June 28, 2025 and June 29, 2024:

Previous wording

Net sales for the three months ended March 29, 2025 were $1,421.0, a decrease of 6.8% from net sales of $1,525.4 for the three months ended March 30, 2024. Net sales for the six months ended March 29, 2025 were $1,837.8, a decrease of 5.1% from net sales of $1,935.8 for the six months ended March 30, 2024. Factors contributing to the change in net sales are outlined in the following table:

Current wording

Net sales for the three months ended June 28, 2025 were $1,188.0, a decrease of 1.2% from net sales of $1,202.2 for the three months ended June 29, 2024. Net sales for the nine months ended June 28, 2025 were $3,025.8, a decrease of 3.6% from net sales of $3,138.0 for the nine months ended June 29, 2024. Factors contributing to the change in net sales are outlined in the following table:

Previous wording

•other decreases of 1.1% included within “volume and mix” related to nonrecurring fiscal 2024 sales of bulk raw materials and AeroGarden® products in our U.S. Consumer segment and the discontinuation of sales of other companies’ products in our Hawthorne segment; and

Current wording

•decreased net sales of 1.4% included within “volume and mix” related to nonrecurring fiscal 2024 sales of bulk raw materials and AeroGarden® products in our U.S. Consumer segment and the discontinuation of sales of other companies’ products in our Hawthorne segment; and

Previous wording

•decreased sales volume in our Hawthorne segment driven by all product categories;

Current wording

•partially offset by increased sales volume of 0.5%, comprised of the net impact of higher volume in our U.S. Consumer segment driven by soils and grass seed products, partially offset by lower volume in our Hawthorne segment driven by all product categories.

Previous wording

•other decreases of 2.6% included within “volume and mix” related to nonrecurring fiscal 2024 sales of bulk raw materials and AeroGarden® products in our U.S. Consumer segment and the discontinuation of sales of other companies’ products in our Hawthorne segment; and

Current wording

•decreased net sales of 2.1% included within “volume and mix” related to nonrecurring fiscal 2024 sales of bulk raw materials and AeroGarden® products in our U.S. Consumer segment and the discontinuation of sales of other companies’ products in our Hawthorne segment;

Previous wording

The decrease in cost of sales for the six months ended March 29, 2025 as compared to the six months ended March 30, 2024 was primarily driven by:

Current wording

The decrease in cost of sales for the nine months ended June 28, 2025 as compared to the nine months ended June 29, 2024 was primarily driven by:

Previous wording

As a percentage of net sales, our gross margin rate was 38.6% and 30.4% for the three months ended March 29, 2025 and March 30, 2024, respectively, and was 35.0% and 27.2% for the six months ended March 29, 2025 and March 30, 2024, respectively. Factors contributing to the change in gross margin rate are outlined in the following table:

Current wording

As a percentage of net sales, our gross margin rate was 31.8% and 29.5% for the three months ended June 28, 2025 and June 29, 2024, respectively, and was 33.7% and 28.0% for the nine months ended June 28, 2025 and June 29, 2024, respectively. Factors contributing to the change in gross margin rate are outlined in the following table:

Previous wording

The increase in gross margin rate for the three and six months ended March 29, 2025 as compared to the three and six months ended March 30, 2024 was primarily driven by:

Current wording

The increase in gross margin rate for the three months ended June 28, 2025 as compared to the three months ended June 29, 2024 was primarily driven by:

Previous wording

•unfavorable leverage of fixed costs, included within “volume, mix and other” driven by lower sales volume.

Current wording

•unfavorable leverage of fixed costs, included within “volume, mix and other” driven by lower sales volume in our Hawthorne segment.

Previous wording

SG&A increased $9.6, or 5.4%, during the three months ended March 29, 2025 compared to the three months ended March 30, 2024. Share-based compensation expense, which excludes certain advertising expenses paid for in Common Shares, decreased $4.7, or 25.8%, primarily due to lower long-term incentive compensation expense. Other SG&A increased $13.6, or 15.7%, driven by higher short-term variable cash incentive compensation expense and other associate-related costs.

Current wording

SG&A increased $5.5, or 3.7%, during the three months ended June 28, 2025 compared to the three months ended June 29, 2024. Advertising expense increased $3.4, or 7.3%, due to higher media spending in our U.S. Consumer segment. Share-based compensation expense, which excludes certain advertising expenses paid for in Common Shares, decreased $3.4, or 25.0%, primarily due to lower long-term incentive compensation expense. Other SG&A increased $5.6, or 7.4%, driven by higher short-term variable cash incentive compensation expense and other associate-related costs.

Previous wording

SG&A increased $19.6, or 6.7%, during the six months ended March 29, 2025 compared to the six months ended March 30, 2024. Share-based compensation expense, which excludes certain advertising expenses paid for in Common Shares, decreased $5.6, or 17.7%, primarily due to lower long-term incentive compensation expense. Other SG&A increased $25.6, or 16.1%, driven by higher short-term variable cash incentive compensation expense and other associate-related costs.

Current wording

SG&A increased $25.1, or 5.7%, during the nine months ended June 28, 2025 compared to the nine months ended June 29, 2024. Advertising expense increased $4.0, or 3.2%, due to higher media spending in our U.S. Consumer segment. Share-based compensation expense, which excludes certain advertising expenses paid for in Common Shares, decreased $8.9, or 19.7%, primarily due to lower long-term incentive compensation expense. Other SG&A increased $31.0, or 13.2%, driven by higher short-term variable cash incentive compensation expense and other associate-related costs.

Previous wording

During the three and six months ended March 29, 2025, we incurred employee and executive severance charges of $3.6 in the “Cost of sales—impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations and $5.4 and $14.9, respectively, in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations. We incurred charges of $3.0 in our U.S. Consumer segment and $0.6 in our Hawthorne segment in the “Cost of sales—impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations during the three and six months ended March 29, 2025. We incurred charges of $3.3 in our U.S. Consumer segment and $2.1 and $11.6 at Corporate in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations during the three and six months ended March 29, 2025, respectively.

Current wording

During the three and nine months ended June 28, 2025, we incurred employee and executive severance charges of $2.6 and $6.2, respectively, in the “Cost of sales—impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations and $1.4 and $16.2, respectively, in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations. We incurred charges of $2.0 and $5.0 in our U.S. Consumer segment and $0.6 and $1.2 in our Hawthorne segment in the “Cost of sales—impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations during the three and nine months ended June 28, 2025, respectively. We incurred charges of $1.9 in our U.S. Consumer segment, $2.7 in our Hawthorne segment and $11.6 at Corporate in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations during the nine months ended June 28, 2025.

Previous wording

During the three and six months ended March 29, 2025, we incurred a non-cash loss of $0.0 and $7.0, respectively, in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations related to the exchange of our convertible debt investment in RIV Capital for non-voting exchangeable shares of Fluent. Refer to “NOTE 2. INVESTMENT IN UNCONSOLIDATED AFFILIATES” for further details.

Current wording

During the three and nine months ended June 28, 2025, we incurred a non-cash loss of $0.0 and $7.0, respectively, in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations related to the exchange of our convertible debt investment in RIV Capital for non-voting exchangeable shares of Fluent. Refer to “NOTE 2. INVESTMENT IN UNCONSOLIDATED AFFILIATES” for further details.

Previous wording

During fiscal 2022, we began implementing a series of Company-wide organizational changes and initiatives intended to create operational and management-level efficiencies. As part of this restructuring initiative, we reduced the size of our supply chain network, reduced staffing levels and implemented other cost-reduction initiatives. We also accelerated the reduction of certain Hawthorne inventory, primarily lighting, growing environments and hardware products, to reduce on hand inventory to align with the reduced network capacity. We incurred costs of $2.3 and $3.7 in our U.S. Consumer segment and $1.4 and $5.1 in our Hawthorne segment associated with this restructuring initiative in the “Cost of sales—impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations during the three and six months ended March 29, 2025, respectively. During the three and six months ended March 30, 2024, we incurred costs of $77.0 and $73.2, respectively, associated with this restructuring initiative primarily related to inventory write-down charges, employee termination benefits, facility closure costs and impairment of right-of-use assets and property, plant and equipment. We recorded recoveries of $0.5 and incurred costs of $1.4 in our U.S. Consumer segment and incurred costs of $75.4 and $67.8 in our Hawthorne segment in the “Cost of sales—impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations during the three and six months ended March 30, 2024, respectively. We recorded recoveries of $0.1 and $0.9 in our U.S. Consumer segment and incurred costs of $1.9 and $2.3 in our Hawthorne segment and $0.0 and $2.4 at Corporate in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations during the three and six months ended March 30, 2024, respectively. Costs incurred since the inception of this restructuring initiative through March 29, 2025 were $302.3 for our Hawthorne segment, $62.0 for our U.S. Consumer segment, $2.9 for our Other segment and $25.1 for Corporate.

Current wording

During fiscal 2022, we began implementing a series of Company-wide organizational changes and initiatives intended to create operational and management-level efficiencies. As part of this restructuring initiative, we reduced the size of our supply chain network, reduced staffing levels and implemented other cost-reduction initiatives. We also accelerated the reduction of certain Hawthorne inventory, primarily lighting, growing environments and hardware products, to reduce on hand inventory to align with the reduced network capacity. During the three months ended June 28, 2025, we incurred costs associated with this restructuring initiative that were not material. During the nine months ended June 28, 2025, we incurred costs of $3.6 in our U.S. Consumer segment and $6.3 in our Hawthorne segment associated with this restructuring initiative in the “Cost of sales—impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations. During the three months ended June 29, 2024, we recorded net recoveries associated with this restructuring initiative that were not material. During the nine months ended June 29, 2024, we incurred costs of $69.7 associated with this restructuring initiative primarily related to inventory write-down charges, employee termination benefits, facility closure costs and impairment of right-of-use assets and property, plant and equipment. We incurred costs of $3.7 in our U.S. Consumer segment and $62.9 in our Hawthorne segment in the “Cost of sales—impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations during the nine months ended June 29, 2024. We recorded recoveries of $1.2 in our U.S. Consumer segment, and incurred costs of $1.0 in our Hawthorne segment, $0.8 in our Other segment and $2.4 at Corporate in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations during the nine months ended June 29, 2024. Costs incurred since the inception of this restructuring initiative through June 28, 2025 were $303.5 for our Hawthorne segment, $62.0 for our U.S. Consumer segment, $2.9 for our Other segment and $25.1 for Corporate.

Previous wording

During the three and six months ended March 30, 2024, we recorded a gain of $0.0 and $12.1, respectively, in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations associated with a payment received in resolution of a dispute with the former ownership group of a business that was acquired in fiscal 2022. This payment was classified as an operating activity in the Condensed Consolidated Statements of Cash Flows.

Current wording

During the three and nine months ended June 29, 2024, we recorded a gain of $0.0 and $12.1, respectively, in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations associated with a payment received in resolution of a dispute with the former ownership group of a business that was acquired in fiscal 2022. This payment was classified as an operating activity in the Condensed Consolidated Statements of Cash Flows.

Previous wording

Other expense is comprised of activities such as the discount on sales of accounts receivable under the Master Receivables Purchase Agreement, royalty income from the licensing of certain of our brand names and foreign exchange transaction gains and losses. Other expense was $4.2 and $10.8 for the three months ended March 29, 2025 and March 30, 2024, respectively; and was $8.7 and $12.6 for the six months ended March 29, 2025 and March 30, 2024, respectively. The decrease in expense was primarily due to lower discount on sales of accounts receivable under the Master Receivables Purchase Agreement.

Current wording

Other expense is comprised of activities such as the discount on sales of accounts receivable under the Master Receivables Purchase Agreement, royalty income from the licensing of certain of our brand names and foreign exchange transaction gains and losses. Other expense was $7.2 and $6.9 for the three months ended June 28, 2025 and June 29, 2024, respectively; and was $15.9 and $19.6 for the nine months ended June 28, 2025 and June 29, 2024, respectively. The decrease in other expense for the nine months ended June 28, 2025 is primarily due to lower discount on sales of accounts receivable under the Master Receivables Purchase Agreement.

Previous wording

Income from operations was $344.7 for the three months ended March 29, 2025, an increase of 26.7% compared to $272.1 for the three months ended March 30, 2024; and was $293.7 for the six months ended March 29, 2025, an increase of 30.6% compared to $224.8 for the six months ended March 30, 2024. For the three and six months ended March 29, 2025, the increase was primarily driven by a higher gross margin rate, lower impairment, restructuring and other charges and lower other expense, partially offset by lower net sales and higher SG&A.

Current wording

Income from operations was $215.0 for the three months ended June 28, 2025, an increase of 7.4% compared to $200.1 for the three months ended June 29, 2024; and was $508.7 for the nine months ended June 28, 2025, an increase of 19.7% compared to $424.9 for the nine months ended June 29, 2024. For the three months ended June 28, 2025, the increase was primarily driven by a higher gross margin rate, partially offset by lower net sales, higher SG&A and higher impairment, restructuring and other charges. For the nine months ended June 28, 2025, the increase was primarily driven by a higher gross margin rate, lower other expense and lower impairment, restructuring, and other charges, partially offset by lower net sales and higher SG&A.

Previous wording

Equity in loss of unconsolidated affiliates was $5.9 and $7.0 for the three months ended March 29, 2025 and March 30, 2024, respectively; and was $15.8 and $29.5 for the six months ended March 29, 2025 and March 30, 2024, respectively. We anticipated a net loss for Bonnie Plants, LLC for the three and six months ended March 29, 2025 due to the seasonal nature of its business, in which sales are heavily weighted to the spring and summer selling periods during our third fiscal quarter. During the three and six months ended March 30, 2024, equity in loss of unconsolidated affiliates also included a pre-tax impairment charge of $0.0 and $10.4, respectively, associated with our investment in Bonnie Plants, LLC.

Current wording

Equity in (income) loss of unconsolidated affiliates was $(25.3) and $(23.0) for the three months ended June 28, 2025 and June 29, 2024, respectively; and was $(9.5) and $6.5 for the nine months ended June 28, 2025 and June 29, 2024, respectively. Equity in (income) loss of unconsolidated affiliates associated with Bonnie Plants, LLC was $(27.2) and $(11.4) during the three and nine months ended June 28, 2025, respectively, compared to $(23.0) and $6.5 during the three and nine months ended June 29, 2024, respectively. We recorded a pre-tax impairment charge of $0.0 and $10.4 during the three and nine months ended June 29, 2024, respectively, associated with our investment in Bonnie Plants, LLC. Equity in (income) loss of unconsolidated affiliates associated with Fluent was $1.9 for the three and nine months ended June 28, 2025.

Previous wording

Interest expense was $36.6 for the three months ended March 29, 2025, a decrease of 17.0% compared to $44.1 for the three months ended March 30, 2024; and was $70.3 for the six months ended March 29, 2025, a decrease of 19.0% compared to $86.8 for the six months ended March 30, 2024. For the three months ended March 29, 2025, the decrease was driven by lower average borrowings of $346.4 and a decrease in our weighted average interest rate, net of the impact of interest rate swaps, of 40 basis points. For the six months ended March 29, 2025, the decrease was driven by lower average borrowings of $367.8 and a decrease in our weighted average interest rate, net of the impact of interest rate swaps, of 40 basis points. The decrease in average borrowings was driven by our focus on using available cash flow to reduce our debt. The decrease in our weighted average interest rate was primarily driven by lower borrowing rates under the Sixth A&R Credit Agreement.

Current wording

Interest expense was $31.8 for the three months ended June 28, 2025, a decrease of 18.0% compared to $38.8 for the three months ended June 29, 2024; and was $102.0 for the nine months ended June 28, 2025, a decrease of 18.8% compared to $125.6 for the nine months ended June 29, 2024. For the three months ended June 28, 2025, the decrease was driven by lower average borrowings of $287.6 and a decrease in our weighted average interest rate, net of the impact of interest rate swaps, of 50 basis points. For the nine months ended June 28, 2025, the decrease was driven by lower average borrowings of $341.7 and a decrease in our weighted average interest rate, net of the impact of interest rate swaps, of 50 basis points. The decrease in average borrowings was driven by our focus on using available cash flow to reduce our debt. The decrease in our weighted average interest rate was primarily driven by lower borrowing rates under the Sixth A&R Credit Agreement.

Previous wording

The effective tax rates for the six months ended March 29, 2025 and March 30, 2024 were 27.8% and 27.1%, respectively. The effective tax rate used for interim purposes is based on our best estimate of factors impacting the effective tax rate for the full fiscal year. Factors affecting the estimated effective tax rate include assumptions as to income by jurisdiction (domestic and foreign), the availability and utilization of tax credits and the existence of elements of income and expense that may not be taxable or deductible. The estimated effective tax rate is subject to revision in later interim periods and at fiscal year-end as facts and circumstances change during the course of the fiscal year. There can be no assurance that the effective tax rate estimated for interim financial reporting purposes will approximate the effective tax rate determined at fiscal year-end.

Current wording

The effective tax rates for the nine months ended June 28, 2025 and June 29, 2024 were 27.9% and 27.5%, respectively. The effective tax rate used for interim purposes is based on our best estimate of factors impacting the effective tax rate for the full fiscal year. Factors affecting the estimated effective tax rate include assumptions as to income by jurisdiction (domestic and foreign), the availability and utilization of tax credits and the existence of elements of income and expense that may not be taxable or deductible. The estimated effective tax rate is subject to revision in later interim periods and at fiscal year-end as facts and circumstances change during the course of the fiscal year. There can be no assurance that the effective tax rate estimated for interim financial reporting purposes will approximate the effective tax rate determined at fiscal year-end.

Previous wording

Net income was $217.5, or $3.72 per diluted share, for the three months ended March 29, 2025 compared to $157.5, or $2.74 per diluted share, for the three months ended March 30, 2024. The increase was driven by a higher gross margin rate, lower impairment, restructuring and other charges, lower other expense and lower interest expense, partially offset by lower net sales, higher SG&A and higher income tax expense.

Current wording

Net income was $149.1, or $2.54 per diluted share, for the three months ended June 28, 2025 compared to $132.1, or $2.28 per diluted share, for the three months ended June 29, 2024. The increase was driven by a higher gross margin rate and lower interest expense, partially offset by lower net sales, higher SG&A, higher impairment, restructuring and other charges and higher income tax expense.

Previous wording

Diluted average Common Shares used in the diluted net income per common share calculation for the three months ended March 29, 2025 and March 30, 2024 were 58.4 million and 57.4 million, respectively, which included dilutive potential Common Shares of 0.8 million and 0.6 million, respectively. The increase in diluted average Common Shares was primarily the result of the exercise and issuance of share-based compensation awards.

Current wording

Diluted average Common Shares used in the diluted net income per common share calculation for the three months ended June 28, 2025 and June 29, 2024 were 58.6 million and 58.0 million, respectively, which included dilutive potential Common Shares of 0.9 million and 1.2 million, respectively. The increase in diluted average Common Shares was primarily the result of the exercise and issuance of share-based compensation awards.

Previous wording

Net income was $148.0, or $2.53 per diluted share, for the six months ended March 29, 2025 compared to $77.0, or $1.34 per diluted share, for the six months ended March 30, 2024. The increase was driven by a higher gross margin rate, lower impairment, restructuring and other charges, lower equity in loss of unconsolidated affiliates, lower other expense and lower interest expense, partially offset by lower net sales, higher SG&A and higher income tax expense.

Current wording

Net income was $297.1, or $5.07 per diluted share, for the nine months ended June 28, 2025 compared to $209.1, or $3.64 per diluted share, for the nine months ended June 29, 2024. The increase was driven by a higher gross margin rate, lower impairment, restructuring and other charges, lower other expense, lower interest expense and higher equity in income of unconsolidated affiliates, partially offset by lower net sales, higher SG&A and higher income tax expense.

Previous wording

Diluted average Common Shares used in the diluted net income per common share calculation for the six months ended March 29, 2025 and March 30, 2024 were 58.6 million and 57.3 million, respectively, which included dilutive potential Common Shares of 1.1 million and 0.6 million, respectively. The increase in diluted average Common Shares was primarily the result of the exercise and issuance of share-based compensation awards.

Current wording

Diluted average Common Shares used in the diluted net income per common share calculation for the nine months ended June 28, 2025 and June 29, 2024 were 58.6 million and 57.5 million, respectively, which included dilutive potential Common Shares of 1.1 million and 0.8 million, respectively. The increase in diluted average Common Shares was primarily the result of the exercise and issuance of share-based compensation awards.

Previous wording

U.S. Consumer segment net sales were $1,311.5 in the second quarter of fiscal 2025, a decrease of 4.9% from second quarter of fiscal 2024 net sales of $1,379.8; and were $1,652.4 for the first six months of fiscal 2025, a decrease of 2.0% from the first six months of fiscal 2024 net sales of $1,686.5. For the second quarter of fiscal 2025, the decrease was driven by lower sales volume of 3.4%, decreased pricing of 0.9% and a decrease of 0.6% due to nonrecurring fiscal 2024 sales of bulk raw materials and AeroGarden® products. For the six months ended March 29, 2025, the decrease was driven by nonrecurring fiscal 2024 sales of bulk raw materials and AeroGarden® products of 1.5% and decreased pricing of 0.8%, partially offset by higher sales volume of 0.3%. The decrease in sales volume for the second quarter of fiscal 2025 was driven by fertilizer, grass seed and controls products. Decreased pricing for the three and six months ended March 29, 2025 was due to additional investments in consumer activation activities.

Current wording

U.S. Consumer segment net sales were $1,030.2 in the third quarter of fiscal 2025, an increase of 1.2% from third quarter of fiscal 2024 net sales of $1,017.5; and were $2,682.6 for the first nine months of fiscal 2025, a decrease of 0.8% from the first nine months of fiscal 2024 net sales of $2,704.0. For the third quarter of fiscal 2025, the increase was driven by higher sales volume of 2.2%, partially offset by a decrease of 1.0% due to nonrecurring fiscal 2024 sales of bulk raw materials and AeroGarden® products. For the nine months ended June 28, 2025, the decrease was driven by nonrecurring fiscal 2024 sales of bulk raw materials and AeroGarden® products of 1.3% and decreased pricing of 0.6%, partially offset by higher sales volume of 1.1%. The increase in sales volume for the third quarter of fiscal 2025 was driven by soils and grass seed products. The increase in sales volume for the nine months ended June 28, 2025 was driven by soils, mulch and grass seed products. Decreased pricing for the nine months ended June 28, 2025 was due to additional investments in consumer activation activities.

Previous wording

U.S. Consumer Segment Profit was $392.5 in the second quarter of fiscal 2025, an increase of 1.8% from second quarter of fiscal 2024 Segment Profit of $385.7; and U.S Consumer Segment Profit was $402.6 for the first six months of fiscal 2025, an increase of 8.7% from the first six months of fiscal 2024 Segment Profit of $370.3. For the three and six months ended March 29, 2025, the increase was primarily due to a higher gross margin rate and lower other expense, partially offset by lower net sales and higher SG&A.

Current wording

U.S. Consumer Segment Profit was $235.5 in the third quarter of fiscal 2025, an increase of 12.0% from third quarter of fiscal 2024 Segment Profit of $210.3; and U.S Consumer Segment Profit was $638.1 for the first nine months of fiscal 2025, an increase of 9.9% from the first nine months of fiscal 2024 Segment Profit of $580.5. For the third quarter of fiscal 2025, the increase was primarily due to higher net sales and a higher gross margin rate, partially offset by higher SG&A. For the nine months ended June 28, 2025, the increase was primarily due to a higher gross margin rate and lower other expense, partially offset by lower net sales and higher SG&A.

Previous wording

Hawthorne Segment Loss was $0.9 in the second quarter of fiscal 2025 compared to Segment Loss of $3.4 for the second quarter of fiscal 2024; and Hawthorne Segment Profit was $0.7 for the first six months of fiscal 2025 compared to Segment Loss of $13.0 for the first six months of fiscal 2024. For the three and six months ended March 29, 2025, the improvement was driven by a higher gross margin rate and lower SG&A, partially offset by lower net sales.

Current wording

Hawthorne Segment Profit was $0.0 in the third quarter of fiscal 2025 compared to Segment Profit of $3.8 for the third quarter of fiscal 2024; and Hawthorne Segment Profit was $0.7 for the first nine months of fiscal 2025 compared to Segment Loss of $9.2 for the first nine months of fiscal 2024. For the third quarter of fiscal 2025, the decrease was driven by lower net sales, partially offset by a higher gross margin rate and lower SG&A. For the nine months ended June 28, 2025, the improvement was driven by a higher gross margin rate and lower SG&A, partially offset by lower net sales.

Previous wording

Other segment net sales were $76.8 in the second quarter of fiscal 2025, a decrease of 3.0% from second quarter of fiscal 2024 net sales of $79.2; and were $100.7 for the first six months of fiscal 2025, a decrease of 1.9% from the first six months of fiscal 2024 net sales of $102.7. For the second quarter of fiscal 2025, the decrease was driven by unfavorable foreign exchange rates of 5.2%, partially offset by higher sales volume of 2.0% and increased pricing of 0.2%. For the six months ended March 29, 2025, the decrease was driven by unfavorable foreign exchange rates of 4.7%, partially offset by higher sales volume of 2.5% and increased pricing of 0.3%.

Current wording

Other segment net sales were $126.6 in the third quarter of fiscal 2025, an increase of 8.2% from third quarter of fiscal 2024 net sales of $117.0; and were $227.3 for the first nine months of fiscal 2025, an increase of 3.4% from the first nine months of fiscal 2024 net sales of $219.8. For the third quarter of fiscal 2025, the increase was driven by higher sales volume of 8.8% and increased pricing of 0.2%, partially offset by unfavorable foreign exchange rates of 0.8%. For the nine months ended June 28, 2025, the increase was driven by higher sales volume of 5.8% and increased pricing of 0.2%, partially offset by unfavorable foreign exchange rates of 2.6%.

Previous wording

Other Segment Profit was $9.0 in the second quarter of fiscal 2025, an increase of 40.6% from second quarter of fiscal 2024 Segment Profit of $6.4; and Other Segment Profit was $5.8 for the first six months of fiscal 2025 compared to Segment Profit of $1.2 for the first six months of fiscal 2024. For the three and six months ended March 29, 2025, the increase was driven by a higher gross margin rate.

Current wording

Other Segment Profit was $16.8 in the third quarter of fiscal 2025, an increase of 43.6% from third quarter of fiscal 2024 Segment Profit of $11.7; and Other Segment Profit was $22.7 for the first nine months of fiscal 2025, an increase of 74.6% from the first nine months of fiscal 2024 Segment Profit of $13.0. For the three and nine months ended June 28, 2025, the increase was driven by higher net sales and a higher gross margin rate.

Previous wording

Corporate expenses were $34.8 in the second quarter of fiscal 2025 as compared to $35.7 for the second quarter of fiscal 2024; and were $69.5 for the first six months of fiscal 2025, an increase of 12.6% from the first six months of fiscal 2024 expenses of $61.7. For the six months ended March 29, 2025, the increase was primarily driven by higher short-term variable incentive compensation expense and other associate-related costs.

Current wording

Corporate expenses were $28.0 in the third quarter of fiscal 2025 compared to $25.1 for the third quarter of fiscal 2024; and were $97.6 for the first nine months of fiscal 2025, an increase of 12.4% from the first nine months of fiscal 2024 expenses of $86.8. For the three and nine months ended June 28, 2025, the increase was primarily driven by higher short-term variable incentive compensation expense and other associate-related costs.

Previous wording

Cash used in operating activities totaled $257.2 for the six months ended March 29, 2025 compared to $39.0 for the six months ended March 30, 2024. This increase was driven by higher inventory production, the timing of accounts receivable sales, higher short-term variable cash incentive compensation payments and higher SG&A, partially offset by higher gross margin and lower interest payments. Accounts receivable sale timing is driven by the entry into the Master Receivable Purchasing Agreement during the six months ended March 30, 2024.

Current wording

Cash provided by operating activities totaled $197.2 for the nine months ended June 28, 2025 compared to $549.0 for the nine months ended June 29, 2024. The decrease was driven by higher inventory production, the timing of accounts receivable sales, higher short-term variable cash incentive compensation payments and higher SG&A, partially offset by higher gross margin and lower interest payments. Accounts receivable sale timing was driven by our entry into the Master Receivable Purchasing Agreement during the nine months ended June 29, 2024.

Previous wording

Cash used in investing activities totaled $34.7 for the six months ended March 29, 2025 compared to $71.1 for the six months ended March 30, 2024. Cash used for investments in property, plant and equipment during the first six months of fiscal 2025 and 2024 was $37.6 and $54.2, respectively, driven by the timing of spending on capital projects. During the six months ended March 29, 2025 and March 30, 2024, we had other investing cash inflows of $2.9 and $4.5, respectively, primarily associated with currency forward contracts. During the six months ended March 30, 2024, we acquired an additional equity interest in Bonnie Plants, LLC for $21.4.

Current wording

Cash used in investing activities totaled $60.0 for the nine months ended June 28, 2025 compared to $80.0 for the nine months ended June 29, 2024. Cash used for investments in property, plant and equipment during the first nine months of fiscal 2025 and 2024 was $54.5 and $67.4, respectively, driven by the timing of spending on capital projects. During the nine months ended June 28, 2025 and June 29, 2024, we had other investing cash (outflows) inflows of $(5.5) and $8.8, respectively, primarily associated with currency forward contracts. During the nine months ended June 29, 2024, we acquired an additional equity interest in Bonnie Plants, LLC for $21.4.

Previous wording

Cash provided by financing activities totaled $237.9 for the six months ended March 29, 2025 compared to $142.8 for the six months ended March 30, 2024. During the six months ended March 29, 2025, we had net borrowings under our credit facilities of $321.2 due to our seasonal working capital build, paid dividends of $78.0 and received cash from the exercise of stock options of $10.0 (which also includes amounts received from employee purchases under the employee stock purchase plan). During the six months ended March 30, 2024, we had net borrowings under our credit facilities of $205.0 and paid dividends of $76.2. During the six months ended March 29, 2025 and March 30, 2024, we repurchased Common Shares for $18.3 and $4.9, respectively (which includes cash paid to tax authorities to satisfy statutory income tax withholding obligations related to share-based compensation). In addition, during the six months ended March 29, 2025 and March 30, 2024 we had other financing cash inflows of $3.0 and $17.2, respectively, primarily related to collections of previously sold accounts receivable not yet submitted to the buyer.

Current wording

Cash used in financing activities totaled $158.2 for the nine months ended June 28, 2025 compared to $221.1 for the nine months ended June 29, 2024. During the nine months ended June 28, 2025, we had net repayments under our credit facilities of $39.3, paid dividends of $116.2 and received cash from the exercise of stock options of $11.2 (which also includes amounts received from employee purchases under the employee stock purchase plan). During the nine months ended June 29, 2024, we had net repayments under our credit facilities of $127.9 and paid dividends of $113.7. During the nine months ended June 28, 2025 and June 29, 2024, we repurchased Common Shares for $18.4 and $5.0, respectively (which includes cash paid to tax authorities to satisfy statutory income tax withholding obligations related to share-based compensation). In addition, during the nine months ended June 28, 2025 and June 29, 2024, we had other financing cash inflows of $4.5 and $23.1, respectively, primarily related to collections of previously sold accounts receivable not yet submitted to the buyer.

Previous wording

On October 27, 2023, we entered into the Master Receivables Purchase Agreement, under which we could sell up to $600.0 of available and eligible outstanding customer accounts receivable generated by sales to four specified customers. On September 1, 2024, we amended the Master Receivables Purchase Agreement to permit us to sell up to $750.0 of available and eligible outstanding customer accounts receivable generated by sales to five specified customers. The agreement is uncommitted and expires on September 1, 2025. Transactions under the Master Receivables Purchase Agreement are accounted for as sales of accounts receivable, and the receivables sold are removed from the Condensed Consolidated Balance Sheets at the time of the sales transaction. Proceeds received from the sales of accounts receivable are classified as operating cash flows and collections of previously sold accounts receivable not yet submitted to the buyer are classified as financing cash flows in the Condensed Consolidated Statements of Cash Flows. We record the discount on sales in the “Other expense, net” line in the Condensed Consolidated Statements of Operations. At March 29, 2025, March 30, 2024 and September 30, 2024, net receivables derecognized were $598.2, $582.8 and $186.6, respectively. During the three months ended March 29, 2025 and March 30, 2024, proceeds from the sale of receivables under the Master Receivables Purchase Agreement totaled $748.2 and $758.2, respectively, and the total discount recorded on sales was $7.9 and $10.7, respectively. During the six months ended March 29, 2025 and March 30, 2024, proceeds from the sale of receivables under the Master Receivables Purchase Agreement totaled $1,022.2 and $955.5, respectively, and the total discount recorded on sales was $11.2 and $12.9, respectively.

Current wording

On October 27, 2023, we entered into the Master Receivables Purchase Agreement, under which we could sell up to $600.0 of available and eligible outstanding customer accounts receivable generated by sales to four specified customers. On September 1, 2024, we amended the Master Receivables Purchase Agreement to permit us to sell up to $750.0 of available and eligible outstanding customer accounts receivable generated by sales to five specified customers. The agreement is uncommitted and expires on September 1, 2025. Transactions under the Master Receivables Purchase Agreement are accounted for as sales of accounts receivable, and the receivables sold are removed from the Condensed Consolidated Balance Sheets at the time of the sales transaction. Proceeds received from the sales of accounts receivable are classified as operating cash flows and collections of previously sold accounts receivable not yet submitted to the buyer are classified as financing cash flows in the Condensed Consolidated Statements of Cash Flows. We record the discount on sales in the “Other expense, net” line in the Condensed Consolidated Statements of Operations. At June 28, 2025, June 29, 2024 and September 30, 2024, net receivables derecognized were $418.8, $477.3 and $186.6, respectively. During the three months ended June 28, 2025 and June 29, 2024, proceeds from the sale of receivables under the Master Receivables Purchase Agreement totaled $686.7 and $724.5, respectively, and the total discount recorded on sales was $7.3 and $8.7, respectively. During the nine months ended June 28, 2025 and June 29, 2024, proceeds from the sale of receivables under the Master Receivables Purchase Agreement totaled $1,708.9 and $1,680.0, respectively, and the total discount recorded on sales was $18.5 and $21.6, respectively.

Previous wording

We have an agreement to provide a supplier finance program which facilitates participating suppliers’ ability to finance our payment obligations with a designated third-party financial institution. Participating suppliers may, at their sole discretion, elect to finance our payment obligations prior to their scheduled due dates at a discounted price to the participating financial institution. Our obligations to our suppliers, including amounts due and scheduled payment dates, are not impacted by suppliers’ decisions to finance amounts under this arrangement. The payment terms that we negotiate with our suppliers are consistent, regardless of whether a supplier participates in the program. Our current payment terms with a majority of our suppliers generally range from 30 to 60 days, which we deem to be commercially reasonable. Our outstanding payment obligations under our supplier finance program were $32.5, $38.5 and $12.5 at March 29, 2025, March 30, 2024 and September 30, 2024, respectively, and are recorded within accounts payable in the Condensed Consolidated Balance Sheets. The associated payments were $155.4 and $153.0 for the six months ended March 29, 2025 and March 30, 2024, respectively, and are classified as operating activities in the Condensed Consolidated Statements of Cash Flows.

Current wording

We have an agreement to provide a supplier finance program which facilitates participating suppliers’ ability to finance our payment obligations with a designated third-party financial institution. Participating suppliers may, at their sole discretion, elect to finance our payment obligations prior to their scheduled due dates at a discounted price to the participating financial institution. Our obligations to our suppliers, including amounts due and scheduled payment dates, are not impacted by suppliers’ decisions to finance amounts under this arrangement. The payment terms that we negotiate with our suppliers are consistent, regardless of whether a supplier participates in the program. Our current payment terms with a majority of our suppliers generally range from 30 to 60 days, which we deem to be commercially reasonable. Our outstanding payment obligations under our supplier finance program were $19.2, $22.8 and $12.5 at June 28, 2025, June 29, 2024 and September 30, 2024, respectively, and are recorded within accounts payable in the Condensed Consolidated Balance Sheets. The associated payments were $212.0 and $218.6 for the nine months ended June 28, 2025 and June 29, 2024, respectively, and are classified as operating activities in the Condensed Consolidated Statements of Cash Flows.

Previous wording

Our cash and cash equivalents were held in cash depository accounts with major financial institutions around the world or invested in high-quality, short-term liquid investments having original maturities of three months or less. The cash and cash equivalents balances of $16.9, $65.1 and $71.6 as of March 29, 2025, March 30, 2024 and September 30, 2024, respectively, included $9.4, $7.9 and $15.9, respectively, held by controlled foreign corporations. As of March 29, 2025, we maintain our assertion of indefinite reinvestment of the earnings of all material foreign subsidiaries.

Current wording

Our cash and cash equivalents were held in cash depository accounts with major financial institutions around the world or invested in high-quality, short-term liquid investments having original maturities of three months or less. The cash and cash equivalents balances of $51.1, $279.9 and $71.6 as of June 28, 2025, June 29, 2024 and September 30, 2024, respectively, included $20.1, $30.4 and $15.9, respectively, held by controlled foreign corporations. As of June 28, 2025, we maintain our assertion of indefinite reinvestment of the earnings of all material foreign subsidiaries.

Previous wording

At March 29, 2025, we had letters of credit outstanding in the aggregate principal amount of $83.1, and had $821.9 of borrowing availability under the Sixth A&R Credit Agreement. The weighted average interest rates on average borrowings under the credit facilities, excluding the impact of interest rate swaps, were 7.8% and 8.9% for the six months ended March 29, 2025 and March 30, 2024, respectively.

Current wording

At June 28, 2025, we had letters of credit outstanding in the aggregate principal amount of $83.1, and had $1,166.9 of borrowing availability under the Sixth A&R Credit Agreement. The weighted average interest rates on average borrowings under the credit facilities, excluding the impact of interest rate swaps, were 7.7% and 9.0% for the nine months ended June 28, 2025 and June 29, 2024, respectively.