Q4 2025 Spectrum Brands Holdings Inc Earnings Call

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I will now hand, the conference over to your first Speaker today, John Schultz Division, Vice President Financial planning analysis and Investor Relations. Please go ahead.

Welcome to spectrum brands Holdings, Q4, 2025 earnings conference call and webcast I'm gentle.

Division Vice President of our P&A in Investor Relations and I will moderate today's call. So.

I Hope you follow our comments, we have placed a slide presentation on the event calendar page in the Investor Relations section of our website.

W. W. Dot spectrum brands Dot Com. This document will remain there following our call.

Starting with slide two of the presentation, our call will be led by David Maura, Our chairman and Chief Executive Officer.

Vessel Cotter, our Chief Financial Officer after opening remarks, we will conduct the Q&A.

Turning to slides three and four our comments today include forward looking statements.

Which are based upon management's current expectations projections and assumptions and are by nature uncertain actual results may differ materially.

Due to that risk spectrum brands encourages you to review the risk factors and cautionary statements.

Good day, thank you for standing by. Welcome to Spectrum Brands Holdings board, quarter 2025 earnings conference call.

At this time, all participants on a listen-only mode.

Wind in our press release dated November 13th 2025.

Our most recent SEC filings.

And spectrum brands Holdings', most recent annual report on Form 10-K, and quarterly reports on Form 10-Q.

After the speaker's presentation, they'll be a question and answer session to ask a question during the session. You will need to press star 1, 1 on your telephone. You will then hear an automated message advising. Your hand is raised.

Please note today's conference is being recorded.

We assume no obligation to update any forward looking statements.

Our statements reflect our expectations regarding tariffs, which are based on currently known and effective tariffs.

I will now hand the conference over to your first Speaker today. Jen Schultz division by President financial planning analysis and investigations. Please go ahead.

And do not reflect tariffs that have been announced are delayed or the other.

Other additional tariffs, which could result in additional cost.

Also please note that we will discuss certain non-GAAP financial measures in this call.

Welcome to Spectrum Brands, Holdings Q4 2025 earnings conference call and webcast. I'm Jen Schultz D division, vice president of fpna and investor relations and I will moderate today's call.

Reconciliations on a GAAP basis for these measures are included in today's press release, and 8-K filing which are both available on our website in the Investor Relations section now I'll turn the call over to David Maura David.

Good morning. Thank you John Good morning, everyone and welcome everybody to today's fourth quarter earnings update appreciate everybody I appreciate everybody, taking the time to join us today.

To help you follow our comments. We have placed a slide presentation on the event calendar page, and the investor relations section of our website at ww.sp cam. This document will remain there following our calls.

For today's call I want to begin with a few big picture opening remarks.

Starting with slide 2 of the presentation. Our call will be led by David, Mara, our chairman, and chief executive officer and fessel, Carter our Chief Financial Officer

After opening remarks, we will conduct the Q&A.

I'm delighted and thankful to our team for navigating the most difficult year.

Turning to slide 3 and 4 our comments today. Include forward-looking statements,

I am excited to let you all know we believe that the worst of the tariff and economic disruptions to our businesses are now behind us.

Which are based upon Management's, current expectations, projections and assumptions.

And our by Nature uncertain, actual results. May differ materials.

Secondly.

We expect our two highest value businesses global pet care and home and garden to return to growth in 2026.

Due to that risk Spectrum Brands, encourages you to review the risk factors and cautionary statements.

Outlined in our press release dated November 13th 2025.

Our adjusted free cash flow of $171 million or approximately $7 per share beat our own expectations in fiscal 'twenty five.

Our most recent SEC filings.

in Spectrum Brands Holdings, most recent annual annual report on form 10K in quarterly reports on form 10 Q

Our strong free cash flow generation will continue into fiscal 'twenty six and beyond.

We assume no obligation to update any forward-looking statements.

Fourth our balance sheet is strong with $124 million in cash at the end of the year zero drawn on our revolver.

Our statements reflect our expectations regarding tariffs.

Which are based on currently known and effective tariffs.

We ended the year with just one five turns of net leverage after returning approximately $375 million to shareholders throughout the year through buybacks and dividends in fiscal 2025.

And do not reflect tariffs that have been announced or delayed or a other additional tariffs, which could result in additional costs.

Also, please note that we will discuss certain non-gaap Financial measures in this call.

Last but certainly not least we are hell bent on improving the profitability and competitive positioning of our HBC appliance business and as the headwinds dissipate. We are excited to work towards a strategic solution for this business once again.

Reconciliations on a gap basis. For these measures are included in today's press release in 8k filing, which are both available on our website and the investor relations section.

Now, I'll turn the call over to David Mora David.

We are also highly confident that we're well positioned within our industry to be the consolidator of choice within the pet and home and Garden industries.

Good morning, thank you Jen. Uh, good morning everyone. I want to welcome everybody. To today's fourth quarter, earnings update, I appreciate everybody. Appreciate everybody taking the time to join us today.

Uh, for today's call, I want to begin with a few, uh, big picture opening remarks.

As we wrap up a very challenging year navigating through headwinds largely outside of our control.

First, I'm delighted and thankful to our teams for navigating the most difficult year.

I again want to start this call by simply saying thanks.

And I am excited to let you all know that. We believe that the worst of the Tariff and economic disruptions to our businesses are now behind us.

Thanks to every one of our global team members for battling through tough times.

Thank you to our vendors and retailers for your partnership and addressing the macroeconomic conditions that we collectively continued to face and lastly, thank you to our Investor base for your continued trust I know this year has been tough, but I am proud of how we are proactively and decisively reacted to these outside forces.

Secondly, our, we expect our 2, highest value, businesses Global peek here in home and garden to return to growth in 2026.

And I believe that actually it's creating a competitive advantage for us as we look forward to the future.

our adjusted free cash flow of 171 million, or approximately 7 dollars per share, beat our own expectations, in fiscal 25 and our strong free cash flow generation will continue in the fiscal 26 and Beyond

If I could ever won now turn your attention to slide six.

During the year, we saw a significant decline in the macroeconomic environment, which impacted overall consumer sentiment not just here in the U S but globally.

Trade policy uncertainty and volatility led to softening demand in the U S. Starting in the second quarter and impacted global markets more noticeably in the second half of fiscal 'twenty five.

Forth. Our balance sheet is strong with 124 million in cash. At the end of the year, zero drawn on our revolver. And we ended the year with just 1.58 turns of net leverage after returning, approximately 375 million to shareholders throughout the year through BuyBacks and dividends in fiscal 2025.

When tariffs were at their highest point earlier. This calendar year, we were looking at an annualized tariff exposure of approximately 450 million U S dollars.

Last but certainly not least. We are hellbent on improving the profitability and competitive positioning of our HBC Appliance business and as the headwinds dissipate, we are excited to work towards a strategic solution for this business. Once again,

This exposure is now approximately $70 million to $80 million on an annualized basis and.

And the good news is thanks to the diligence and the incredible efforts of our global supply chain team. We are extremely happy to report to you that we have offset substantially all of this exposure through a combination of vendor concessions.

We are also highly confident that we are well, positioned within our industry, to be the consolidator of choice within the pet and Home and Garden Industries.

I again want to start this call by simply saying thanks.

Full internal cost reductions supply base reconfiguration, and diversification and lastly pricing actions I share. This I shared this with you last quarter that we had implemented a number of cost reduction initiatives that would result in over $50 million of savings in fiscal <unk>.

Five.

This included a reduction enforce that spanned all three of our business lines and our corporate functions.

Thanks to everyone of our Global team members for battling through tough times. Thank you to our vendors and retailers for your partnership in addressing the macroeconomic conditions that we can, we collectively continue to face. And lastly, thank you to our investor base for your continued trust. I know this year has been tough, but I am proud of how we have proactively and decisively reacted to these outside forces. And I believe that actually it's creating a competitive Advantage for us as we look forward to the future.

If I could have everyone. Now turn your attention to slide 6.

While it's never easy to take these kind of actions, we know that the impact has been tough on our employees. We also know however that it was necessary to rightsize, our cost structure and to protect the health of the businesses. We have also made significant progress in diversifying our supply chain to increase both its.

During the year, we saw a significant decline in the macroeconomic environment which impacted overall consumer sentiment not just here in the US but globally.

<unk> and its flexibility.

Heading into fiscal 'twenty, five we had approximately $300 million of our.

Trade policy, uncertainty, and volatility led to softening demand in the U.S. Starting in the second quarter and impacting global markets, more noticeably in the second half of fiscal 2025.

Source product coming into the United States from China, We have since reduced these Chinese source products to the U S markets by nearly 50% further diversification will remain a priority for us going forward and we expect to only have approximately 15 to maybe $20 million of direct spend in China.

When tariffs were at their highest point earlier, this calendar year. We were looking at an annualised tariff exposure of approximately 450 million US dollars.

This exposure is now approximately 70 to 80 million dollars on an annualized basis.

There are two most highly valued businesses global pet care and home and garden by the end of fiscal 'twenty six.

We will also continue to move product out of China within our home and personal care businesses. When it's the right financial decision to do so and when it does not sacrifice the standards that we have for our quality.

And the good news is thanks to the diligence and the incredible efforts of our Global Supply Chain team. We are extremely happy to report to you that we have offset substantially all of this exposure through a combination of vendor concessions.

Painful, internal cost, reductions.

I would also like to take the opportunity now to thank our agile global supply chain team, who have worked tirelessly navigate this volatile environment and to make sure that our supply chain going forward is much more resilient and flexible to whatever challenges may arise.

Supply base, reconfiguration and diversification and lastly pricing actions.

I share this I shared this with you last quarter that we had implemented a number of cost reduction initiatives that would result in over a $50 million dollars of savings and fiscal 25.

Earlier in the year I emphasized it with all of this uncertainty we will control what we could control and one of the priorities when we pivoted our operating strategy was to maximize cash flow generation and deliver to you over a $160 million of free cash flow in fiscal 'twenty five.

This included a reduction in force that spanned all 3 of our business lines and our corporate functions.

While it's never easy to take these kinds of actions.

And in fact, we over delivered this number we delivered $170 million plus in free cash flow through disciplined Capex management and better working capital improvements. We ended the year with net leverage of 158 times well below the stated goal of two to two and a half all while continuing to reward our <unk>.

We know that the impact has been tough on our employees. We also know, however, that it was necessary to rightsize, our cost structure and to protect the health of the businesses.

Operator: At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. Please note, today's conference is being recorded. I will now hand the conference over to your first speaker today, Jen Schultz, Division Vice President, Financial Planning, Analysis, and Investor Relations. Please go ahead.

Please enter your dial-in PIN and press pound when finished.

Our holders with approximately $375 million capital returns split between share repurchases and dividends in fiscal 'twenty five.

During just the recently completed fourth quarter, we repurchased an additional 700000 shares of stock and we continue buying during our pre earnings quiet period through a <unk> one plan put in place in June later, which was amended by our board in September to increase the cap on that to a $100 million.

Jennifer Schultz: Welcome to Spectrum Brands Holdings, Q4 2025 earnings conference call and webcast. I'm Jen Schultz, Division Vice President of FP&A and Investor Relations, and I will moderate today's call. To help you follow our comments, we have placed a slide presentation on the event calendar page in the Investor Relations section of our website at www.spectrumbrands.com. This document will remain there following our call. Starting with slide two of the presentation, our call will be led by David Maura, our Chairman and Chief Executive Officer, and Faisal Qadir, our Chief Financial Officer. After opening remarks, we will conduct the Q&A. Turning to slides three and four, our comments today include forward-looking statements, which are based upon management's current expectations, projections, and assumptions, and are by nature uncertain. Actual results may differ materially.

In fiscal 2025, we repurchased approximately $4 4 million shares roughly $326 million.

For us going forward. And we expect to only have approximately 15 to maybe 20 million dollars of direct spend in China for our 2. Most highly valued businesses, Global PEC here, and home and garden by the end of fiscal 26. We will also continue to move product out of China, within our home and personal care businesses when it's the right financial decision to do so. And when it does not sacrifice the standards that we have for our quality,

And since the close of the fiscal year, we have purchased approximately two 4 million shares for roughly $21 5 million in total.

Since the close of the <unk> transaction, we have returned over $1 $3 $7 billion of capital to our shareholders through our various share repurchase programs and reduced our share count by approximately 44% since the close of that deal.

I would also like to take the opportunity now to thank our agile, Global Supply Chain team, who have worked tirelessly to navigate this volatile environment. And to make sure that our supply chain going forward is much more resilient and flexible to whatever challenges may arise.

Earlier in the year.

Certainty. We would control what we could control.

If I could now everyone turn to slide seven I'll give you a quick overview of fiscal 'twenty five results.

As I mentioned earlier it was a challenging year for the businesses, we're faced with a variety of external headwinds.

And 1 of the priorities when we pivoted, our operating strategy was to maximize cash flow generation and deliver to you over 160 million in free cash flow in fiscal 25.

Also trade policy landscape, not only impacted consumer demand, but it also led to a temporary pause in shipments from China into our U S businesses when the tariffs were at their highest point in.

And in fact we over-delivered this number, we delivered 170 million plus in free cash flow through discipline, capex management and better working Capital Improvements.

Jennifer Schultz: Due to that risk, Spectrum Brands encourages you to review the risk factors and cautionary statements outlined in our press release dated 13 November 2025, our most recent SEC filings, and Spectrum Brands Holdings' most recent annual report on Form 10-K and quarterly reports on Form 10-Q. We assume no obligation to update any forward-looking statements. Our statements reflect our expectations regarding tariffs, which are based on currently known and effective tariffs, and do not reflect tariffs that have been announced or delayed, or other additional tariffs which could result in additional costs. Also, please note that we will discuss certain non-GAAP financial measures in this call. Reconciliations on a GAAP basis for these measures are included in today's press release and 8-K filings, which are both available on our website in the Investor Relations section. Now, I'll turn the call over to David Maura. David.

In fact, we paused all incoming and inbound traffic from China for about six to eight weeks and that impacted our ability to fill orders throughout the second half of the fiscal year.

Overall fiscal 'twenty five net sales declined five 2% compared with fiscal 'twenty four.

We ended the year with net leverage of 1.58 times. Well, below, the stated goal of 2 to 2 and a half all while continuing to reward our shareholders with approximately 375 million in capital returns. Split between share repurchases and dividends in fiscal 25.

And this was after actually started in Europe with topline growth as you remember in the first quarter of 'twenty five.

And while our fourth quarter net sales also declined by 5%, we're actually encouraged that the consumer demand was stabilizing during throughout the quarter in our key markets and our categories as trade policy has become a little less volatile than the supply shortages, we experienced in the second half of the year are now.

During just the recently, completed fourth quarter, we were purchased an additional 700,000 shares of stock and we continue buying during our pre-earnings choir, period, through a 10B 5-1 plan put in place in June later, which was amended by our board, in September to increase the cap on that to a hundred million dollars.

In fiscal 2025, we purchased approximately 4.4 million shares, totaling roughly $326 million.

Find us.

Largely behind US I should say, we have been relentless in addressing the top line declines by initiating further cost reduction initiatives and cost savings. In addition to the fixed costs cost reductions with the elimination of permanent salary head count we have also been reducing selectively our advertising and marketing spend.

And since the close of the fiscal year, we have purchased approximately 0.4 million shares for roughly 21 and a half million in total.

David Maura: Good morning. Thank you, Jen. Good morning, everyone. I want to welcome everybody to today's fourth quarter earnings update. I appreciate everybody taking the time to join us today. For today's call, I want to begin with a few big picture opening remarks. First, I'm delighted and thankful to our teams for navigating a most difficult year. I am excited to let you all know that we believe the worst of the tariff and economic disruptions to our businesses are now behind us. We expect our two highest value businesses, Global Pet Care and Home and Garden, to return to growth in 2026. Our adjusted free cash flow of $171 million, or approximately $7 per share, beat our own expectations in fiscal 2025, and our strong free cash flow generation will continue into fiscal 2026 and beyond.

Since the close of the hhi transaction, we have returned over 1.37 billion dollars of capital to our shareholders through our various share repurchase programs and reduced our Share account by approximately 44% since the close of that deal.

In light of category softness and we have significantly reduced our office and distribution footprint as well all of these actions are mitigating some of the EBIT declines in the various macroeconomic headwinds.

So I can now have everyone turn to slide 7. I'll give you a quick overview of fiscal 25 results.

As I mentioned earlier, it was a challenging year for the businesses. We were faced with a variety of external headwinds.

We can now look to slide eight and focus now on our strategic priorities for this upcoming year fiscal 'twenty six.

The fundamentals of our business are actually strong and I am confident the decisions. We've made over the last six to nine months actually make us a stronger more focused business and that brings me to the first key element of our strategic focus we will continue to be good financial stewards of the businesses as we navigate the current macroeconomic landscape.

The volatile trade policy landscape, not only impacted consumer demand, but also led to a temporary pause in shipments uh, from China into our us businesses, when the tariffs were at their highest point.

In fact, we paused all incoming and inbound traffic for from China, for about 6, to 8 weeks, and that impacted our ability to fill orders throughout the second half of the fiscal year.

The actions we took in fiscal 'twenty five while difficult they were quite necessary to address the external headwinds we are faced with.

David Maura: Fourth, our balance sheet is strong with $124 million in cash at the end of the year, zero drawn on our revolver, and we ended the year with just 1.58x net leverage after returning approximately $375 million to shareholders throughout the year through buybacks and dividends in fiscal 2025. Last, but certainly not least, we are hellbent on improving the profitability and competitive positioning of our HBC appliance business, and as the headwinds dissipate, we are excited to work towards a strategic solution for this business once again. We are also highly confident that we are well positioned within our industry to be the consolidator of choice within the pet and home and garden industries. As we wrap up a very challenging year, navigating through headwinds largely outside of our control, I again want to start this call by simply saying thanks.

Overall fiscal 25, net sales declined 5.2% compared with fiscal 24, actually. And this was after actually starting the year off with Topline growth as you remember in the first quarter of 25.

And with that said the hard work is not over we have to continue to be diligent and we actually need to be more efficient with our spending and investing profile, we need to demand and we will demand better returns on our investments while continuing to reduce the overall complexity of our businesses.

The teams are now focused on fewer bigger better initiatives to maximize the impact of our investments as you've heard me say before we believe that the strength of our balance sheet sets us apart from our peers. We will continue to remain disciplined in managing working capital while at the same time, maintaining high fill rates supported by our <unk>.

And while our fourth quarter in net sales also declined by 5%, we're actually encouraged that consumer demanded was stabilizing during the throughout the quarter in our key markets and our categories. As trade policy, has become a little less volatile. And the supply shortages, we experienced in the second half of the year are now behind us.

Largely behind us. I should say we have been Relentless in addressing the Topline declines by initiating further cost reduction initiatives and cost savings.

In class supply chain team.

The second element here is continued focus on operational excellence by leveraging technological advances that we're building for the future.

You know we've been on a multiyear journey to upgrade and implement a new ERP system SAP four Hana. This is a project that's been underway for the last several years and it started off with the successful implementation and our global Pet care in North America business at the end of fiscal 'twenty four and there was shortly therefore followed up.

In addition to the fixed cost cost reductions with the elimination of permanent salary. Headcount, we have also been reducing selectively or advertising and marketing spend in light of category softness. And we have significantly reduced our office and distribution, uh, footprint as well. All these actions are mitigating some of the evidences from the various macroeconomic headlines.

David Maura: Thanks to every one of our global team members for battling through tough times. Thank you to our vendors and retailers for your partnership in addressing the macroeconomic conditions that we collectively continue to face. Lastly, thank you to our investor base for your continued trust. I know this year has been tough, but I am proud of how we have proactively and decisively reacted to these outside forces, and I believe that actually it's creating a competitive advantage for us as we look forward to the future. If I could have everyone now turn your attention to slide six. During the year, we saw a significant decline in the macroeconomic environment, which impacted overall consumer sentiment, not just here in the US, but globally.

If we can now look to slide 8 and focus on our strategic priorities for the upcoming fiscal year 2026.

By a successful go live in our home and Garden business, which is mostly a north American business over the last few months. We've also started and how to move portions of our international business over to the new platform.

No new ERP inflammation implementation program is flawless, we have been incredibly pleased so far with the progress we've made.

Implementing this without without any are trying to minimize any sort of disruption to our customer base.

We've also made the decision to extend the implementation invest for Hana to our home and personal care business. Our third key element is centered around our people and while we've had a challenging year and made a lot of difficult decisions, particularly around human capital Thats impacted our employees I am proud of our team and I believe that their focus on resilience are critical.

David Maura: Trade policy uncertainty and volatility led to softening demand in the US starting in the second quarter and impacted global markets more noticeably in the second half of fiscal 2025. When tariffs were at their highest point earlier this calendar year, we were looking at an annualized tariff exposure of approximately $450 million. This exposure is now approximately $70 to $80 million on an annualized basis. The good news is, thanks to the diligence and the incredible efforts of our global supply chain team, we are extremely happy to report to you that we have offset substantially all of this exposure through a combination of vendor concessions, painful internal cost reductions, supply-based reconfiguration and diversification, and, lastly, pricing actions.

The current macroeconomic landscape. The actions, we took in fiscal 25 while difficult. They were quite necessary to address the external headwinds. We're faced with. And with that said, the hard work is not over. We have to continue to be diligent and we actually need to be more efficient with our spending and investing profile. We need to demand and we will demand better returns in our investments. While continuing to reduce the overall complexity of our businesses, the teams are now focused on fewer bigger, better initiatives to maximize the impact of our investments.

Components of driving the next chapter of growth.

Our last key element is around transformation and our continued plans to focus on becoming a pure play global pet care and home and garden business that we've set out a few years ago, starting with global Tech here under <unk> New leadership. The team is embracing a new data driven approach that has already yielded small wins.

As you've heard me say before, we believe that the strength of our balance sheet sets us apart from our peers, we will continue to remain disciplined in managing working capital. While at the same time, maintaining 5, fill rates supported by our best-in-class supply chain team.

The second element here is continued focused on operational excellence by leveraging technological advances that we're building for the future.

And is resulting in improved operational trends the innovation pipeline is strong with fewer bigger better new product launches on the horizon that are grounded in consumer insights.

I will continue to push this team to go faster because I believe in the strategy and I'm excited about the future of cut.

Moving to the home and Garden business as you May recall me, saying before we've been on a bit of a turnaround over the last couple of years since half year joined the team.

As you know, uh, we've been on a multi-year journey to upgrade and implement the new Erp system saps. S4hana. This is a project that's been underway for the last several years and it started off with a successful implementation in our Global PEC here in North America business at the end of fiscal 24 and it was shortly therefore followed up by a successful. Go live in our Home and Garden business which is mostly in North American Business.

David Maura: I shared this with you last quarter that we had implemented a number of cost reduction initiatives that would result in over $50 million of savings in fiscal 2025. This included a reduction in force that spanned all three of our business lines, and our corporate functions. While it's never easy to take these kinds of actions, we know that the impact has been tough on our employees. We also know, however, that it was necessary to right-size our cost structure, and to protect the health of the businesses. We have also made significant progress in diversifying our supply chain to increase both its resiliency and its flexibility. Heading into fiscal 2025, we had approximately $300 million of source product coming into the United States from China. We have since reduced these Chinese source products to the US markets by nearly 50%.

<unk> has set the right tone for a high performing team with a culture anchored around growth development and employee engagement we.

Over the last few months. We've also started now to move portions of our international business over to the new platform.

We have had some highly successful innovation innovation launches and I'm really pleased with the progress that R&D R&D team has made here and at these.

These new products have landed well with the consumer and we're expecting this momentum to actually continue and build with exciting new product launches planned for fiscal 'twenty six.

While no new Erp Implement, implementation program is Flawless. We have been incredibly pleased so far with the progress we've made, but by implementing this without ma without any or Trying to minimize any sort of disruption to our customer base.

We've also made the decision to extend the implementation of S4HANA to our Home and Personal Care business.

I remain optimistic about the evolving M&A landscape, we expect to continue to pursue acquisition opportunities in both our global Pet care Division and our home and garden businesses as additional assets become available at better price points.

Our third key element is centered around our people, and while we've had a challenging year and made a lot of difficult decisions—particularly around human capital—that's impacted our employees. I am proud of our team, and I believe that their focus and resilience are critical components of driving the next chapter of growth.

Lastly, on home and personal care, the most impacted of our three businesses by the latest trade pulse policy volatility. The team has stepped up to the challenge they've made meaningful changes to address our current reality and while we had a tough fiscal 'twenty five we are committed to maximizing the business has value.

David Maura: Further diversification will remain a priority for us going forward, and we expect to only have approximately $15 to maybe $20 million of direct spend in China for our two most highly valued businesses, Global Pet Care and Home and Garden, by the end of fiscal 2026. We will also continue to move product out of China within our home and personal care businesses when it's the right financial decision to do so, and when it does not sacrifice the standards that we have for our quality. I would also like to take the opportunity now to thank our agile global supply chain team, who have worked tirelessly to navigate this volatile environment and to make sure that our supply chain going forward is much more resilient and flexible to whatever challenges may arise.

Our last key element is around transformation and our continued plans to focus on becoming the Pure Play, Global Pet Care and Home and Garden business that we've set out a few years ago.

And we expect an improvement overall profitability in fiscal 'twenty six.

Starting with global peek here under ory's new leadership. The team is embracing a new data driven approach that has already yielded small wins and is resulting in improved operational trends.

We remain committed to the vision of finding a strategic solution for our HBC business.

The Innovation pipeline is strong with fewer bigger better, new product, Launches, on the horizon that are grounded in consumer insights.

By now everyone turn to slide nine I'm going to give an overview of our high level 2006 earnings framework.

I'll continue to push this team to go faster because I believe in the strategy and I'm excited about the future of Pep.

We expect net sales to be flat to up low single digits versus the prior year, the external headwinds that suppressed consumer demand for the vast majority of fiscal 'twenty five are expected to continue particularly in the first half of our fiscal year.

Moving to the Home and Garden business. As you may recall, me saying before we've been on a bit of a turnaround, over the last couple of years since have year, joined the team.

Have your has set the right tone for a high-performing team, with a culture, anchored around growth development and employee engagement.

Despite these external pressures, we believe home and garden and global Pet care are both positioned to resume growth in fiscal 'twenty six offsetting an expected decline in our home.

David Maura: Earlier in the year, I emphasized that with all of this uncertainty, we would control what we could control. One of the priorities when we pivoted our operating strategy was to maximize cash flow generation and deliver to you over $160 million of free cash flow in fiscal 2025. In fact, we over-delivered this number. We delivered $170 million plus in free cash flow through disciplined CapEx management and better working capital improvements. We ended the year with net leverage of 1.58x, well below the stated goal of 2 to 2.5x, all while continuing to reward our shareholders with approximately $375 million of capital returns, split between share repurchases and dividends in fiscal 2025.

And personal care business as we navigate through category softness and supply chain simplification initiatives that will reduce the product portfolio in North America.

We have had some highly successful Innovation, Innovation launches and I'm really pleased with the progress. The r&t R&D team has made here. And if these Pro this, these new products have landed well with the consumer. And we're expecting this momentum to actually continue and build with exciting. New product launches planned for fiscal 26.

From an adjusted EBITDA perspective, we are targeting low single digit growth, primarily driven by continued expense management cost improvement initiatives and favorable FX offsetting lower volumes. The additional cost of tariffs are largely mitigated through a variety of actions including pricing.

I remain optimistic about the evolving m&a landscape. We expect to continue to pursue acquisition opportunities. In both our Global peccare Division and our home and garden businesses. As additional assets become available at better price points.

And lastly for adjusted free cash flow, we expect another strong year ahead at approximately 50% conversion of adjusted EBITDA.

David Maura: During just the recently completed fourth quarter, we repurchased an additional 700,000 shares of stock, and we continue buying during our pre-earnings quiet period through a 10B5-1 plan put in place in June, which was amended by our board in September to increase the cap on that to $100 million. In fiscal 2025, we repurchased approximately 4.4 million shares for roughly $326 million. Since the close of the fiscal year, we have purchased approximately 0.4 million shares for roughly $21.5 million in total. Since the close of the HHI transaction, we have returned over $1.37 billion of capital to our shareholders through our various share repurchase programs and reduced our share count by approximately 44% since the close of that deal. If I could now have everyone turn to slide seven, I'll give you a quick overview of fiscal 25 results.

Lastly on home and personal care. The most impacted of our 3 businesses by the latest trade policy volatility, the team has stepped up to the challenge. They've made meaningful changes to address our current reality.

Heading into the fiscal year, we are seeing signs of improved predictability in the macroeconomic environment, giving us the confidence to reinstate our earnings framework. We are focused on delivering on our goals to our investors. We believe this framework provides a challenging but achievable financial goal to the team.

And while we had a tough fiscal, 25, we are committed to maximizing the business's value and we expect an improvement to overall profitability in fiscal 26.

We remain committed to the vision of finding a strategic solution for our HBC business.

If I can, now everyone turn to slide 9, I'm going to give an overview of our high-level 26 earnings framework.

As we look forward to a stronger fiscal 'twenty six before I turn the call over to Faisel I'd like to sincerely. Thank our outgoing Chief financial Officer, Jeremy Smelser, He's been a tremendous asset to the company and helped us navigate through some really challenging times I am confident that vessel will continue to drive strong execution.

we expect net sales to be flat to up low, single digits versus the prior year, the external headwinds, that suppress consumer demand for the vast majority of fiscal, 25 are expected to continue particularly in the first half of our

fiscal year.

And financial discipline in the years ahead, and I am already enjoying my new partnership with him as my CFO with that I'll turn the call over to vessel to share more on the financials and additional business insights. The call is now yours for us.

Despite these external pressures, We Believe home and garden and Global PEC, here are both positioned to resume growth in fiscal 26 offsetting and expected decline in.

David Maura: As I mentioned earlier, it was a challenging year for the businesses, and we were faced with a variety of external headwinds. The volatile trade policy landscape not only impacted consumer demand, but it also led to a temporary pause in shipments from China into our US businesses when the tariffs were at their highest point. In fact, we paused all incoming and inbound traffic from China for about six to eight weeks, and that impacted our ability to fill orders throughout the second half of the fiscal year. Overall, fiscal 2025 net sales declined 5.2% compared with fiscal 2024, and this was after actually starting the year off with top-line growth, as you remember, in the first quarter of 2025.

Thank you David.

Turning to slide 11.

A review of our Q4 results from continuing operations, beginning with our net sale.

And personal care business as we navigate, through category softness and supply chain, simplification initiatives, that will reduce the product portfolio in North America.

Net sales decreased five 2%, excluding the impact of $10 5 million of favorable foreign exchange organic net sales decreased six 6%, primarily driven by supply constraints as a result of our decision to pause purchases from China for the U S market during the third quarter and continued category softness.

From an adjusted ebit perspective, we are targeting low single-digit growth primarily driven by continued expense management.

Cost improvement initiatives and favorable FX are offsetting lower volumes.

The additional cost of tariffs are largely mitigated through a variety of actions, including pricing.

And our global pet care and home and personal care business.

These headwinds were partially offset by a delayed start to the season for our home and garden business that benefited current quarter results.

And lastly, for adjusted free cash flow. We expect another strong year ahead at approximately 50% conversion of adjusted evida

Gross profit decreased $31 4 million and gross margins of 35% decreased 220 basis points, largely driven by lower volume unfavorable mix inflation and higher tariffs, partially offset by pricing cost improvement actions and favorable FX.

Heading into the fiscal year, we are seeing signs of improved predictability in the macroeconomic environment.

David Maura: While our fourth quarter net sales also declined by 5%, we're actually encouraged that consumer demand was stabilizing throughout the quarter in our key markets and our categories as trade policy has become a little less volatile, and the supply shortages we experienced in the second half of the year are now behind us, largely behind us, I should say. We have been relentless in addressing the top-line declines by initiating further cost reduction initiatives and cost savings. In addition to the fixed cost reductions with the elimination of permanent salary headcount, we have also been reducing selectively our advertising and marketing spend in light of category softness, and we have significantly reduced our office and distribution footprint as well. All these actions are mitigating some of the EBITDA declines from the various macroeconomic headwinds.

Giving us the confidence to reinstate our earnings framework. We are focused on delivering on our goals to our investors. We believe this framework provides the challenging but achievable financial goals of the team as we look forward to a stronger fiscal 26.

Operating expenses of just over $227 million decreased 14, 6% due to lower spend in advertising and marketing and general expense management in light of category softness as well as lower restructuring related project spend.

Operating income of $29 4 million increased by $7 5 million.

Due to the lower operating expenses, partially offset by a decline in gross profit.

Before I turn the call over to fessel I'd like to sincerely. Thank our outgoing Chief Financial Officer, Jeremy Smeltzer. He's been a tremendous asset to me and the company and helped us navigate through. Some really challenging times, I'm confident that Festival will continue to drive strong execution and financial discipline in the years ahead. And I'm already enjoying my new partnership with him as my CFO with that. I'll turn

GAAP net income and diluted earnings per share both increased primarily driven by a onetime tax benefit for the quarter, resulting from a tax entity realignment initiative.

On the call over to vessel to share more on the financials and additional business. Use insights, the call is now yours vessel.

Thank you, David.

Turning to cite 11.

David Maura: If we can now look to slide eight and focus now on our strategic priorities for this upcoming year, fiscal 2026. The fundamentals of our business are actually strong, and I'm confident the decisions we've made over the last six to nine months actually make us a stronger, more focused business. That brings me to the first key element of our strategic focus. We will continue to be good financial stewards of the businesses as we navigate the current macroeconomic landscape. The actions we took in fiscal 2025, while difficult, were quite necessary to address the external headwinds we were faced with. With that said, the hard work is not over. We have to continue to be diligent, and we actually need to be more efficient with our spending and investing profile.

And a review of our Q4 results from continuing operations, beginning with our net sales.

Our share count and higher operating income.

Adjusted EBITDA was $63 4 million.

A decrease of $5 $5 million, driven by lower volume and reduced gross margin, partially offset by lower operating expenses.

Adjusted diluted EPS increased to 261 dollar.

Driven by a onetime tax benefit that I referenced earlier and the reduction in shares outstanding.

Net sales decreased 5.2%, excluding the impact of 10.5 million of favorable, foreign exchange organic. Net sales. Decreased 6.6%, primarily driven by Supply constraints, as a result of our decision to pause purchases from China for the US market. During the third quarter and continued category softness in our Global Pet Care and home and personal care business.

Shares outstanding partially offset by lower adjusted EBITDA.

These headwinds were partially offset by a delayed start to the season for our Home and Garden business, that benefited current quarter results.

Turning to slide 12, Q4 interest expense from continuing operations of $7 $9 million increase.

<unk> increased $1 2 million.

Due to higher average borrowings on our cash flow revolver and.

David Maura: We need to demand, and we will demand, better returns on our investments while continuing to reduce the overall complexity of our businesses. The teams are now focused on fewer, bigger, better initiatives to maximize the impact of our investments. As you've heard me say before, we believe that the strength of our balance sheet sets us apart from our peers. We will continue to remain disciplined in managing working capital, while at the same time maintaining high fill rates, supported by our best-in-class supply chain team. The second element here is continued focus on operational excellence by leveraging technological advances that we're building for the future. As you know, we've been on a multi-year journey to upgrade and implement the new ERP system, SAP's S/4HANA.

In the current quarter.

Cash taxes during the quarter decreased $10 $2 million from the prior year.

Gross profit decreased 31.4 million and gross. Margins of 35% decrease, 220 basis points is largely driven by lower volume unfavorable mix inflation and higher tariffs, partially offset by pricing cost Improvement actions, and favorable FX,

<unk> and amortization of $23 9 million decreased $1 $7 million from last year.

And separately share based compensation increased to $5 8 million from $4 6 million in the prior year.

Operating expenses of just over 227 million decreased 14.6%, due to lower spend in advertising and marketing, and general expense Management in light of category softness, as well as lower restructuring related projects. Spend

Capital expenditures were $13 2 million in Q4, essentially flat to last year.

Cash payments to our strategic transactions restructuring related projects and other unusual or nonrecurring adjustments by $7 3 million.

Operating income of 29.4 million increased by 7.5 million due to the lower operating expenses partially offset by a decline in gross profit.

Versus $10 million last year.

Moving to the balance sheet, we had a quarter end cash balance of $123 $6 million and $492 $3 million available on our $500 million cash flow revolver.

David Maura: This is a project that's been underway for the last several years, and it started off with a successful implementation in our Global Pet Care North America business at the end of fiscal 2024. It was shortly thereafter followed up by a successful go-live in our home and garden business, which is mostly a North American business. Over the last few months, we've also started now to move portions of our international business over to the new platform. While no new ERP implementation program is flawless, we have been incredibly pleased so far with the progress we've made by implementing this without any, or trying to minimize any, sort of disruption to our customer base. We've also made the decision to extend the implementation of S/4HANA to our home and personal care business. Our third key element is centered around our people.

GAAP net income and diluted earnings per share both increased, primarily driven by a one-time tax benefit for the quarter resulting from a tax entity realignment initiative, lower share count, and higher operating income.

Total debt outstanding was approximately 581 4 million consisting of $496 million.

Adjusted ibida was 63.4 million. A decrease of 5.5 million driven by lower volume and reduced gross. Margins, partially offset by lower operating expenses.

Your unsecured notes and $85 3 million of finance leases.

Adjusted diluted EPS increased to 2.61.

We ended the quarter with $457 8 million of net debt.

Turning to slide 13, and an overview of our full year results.

Driven by a 1-time tax benefit that a reference earlier and the reduction in shares outstanding uh shares outstanding partially offset by lower adjusted. Evida

Net sales decreased five 2% and organic net sales decreased five 3%.

Sales performance was driven by category softness in light of macroeconomic conditions and supply shortages from the six to eight weeks.

turning to slide 12 Q4 interest expense from continuing operations of 7.9 million increased 1.2 million due to higher average borrowing on our cash flow revolver in the current quarter.

As previously mentioned.

David Maura: While we've had a challenging year and made a lot of difficult decisions, particularly around human capital that's impacted our employees, I am proud of our team, and I believe that their focus and resilience are critical components of driving the next chapter of growth. Our last key element is around transformation and our continued plans to focus on becoming the pure play Global Pet Care and Home and Garden business that we've set out a few years ago. Starting with Global Pet Care under Ori's new leadership, the team is embracing a new data-driven approach that has already yielded small wins and is resulting in improved operational trends. The innovation pipeline is strong, with fewer, bigger, better new product launches on the horizon that are grounded in consumer insights.

These had been significantly impacted results both in our global pet care and home and personal care businesses.

Despite strong performance by our key brands sales in home and garden business.

Cash taxes. During the quarter decreased 10.2 million from the prior year, depreciation and amortization of 23.9 million decreased 1.7 million from last year.

We're modestly down driven by unfavorable weather conditions.

Full year gross profit decreased by $77 4 million and gross margin of 36, 7% decreased 70 basis points, driven by lower volume higher inflation increased tariff costs and unfavorable mix. This was partially offset by cost improvement initiatives pricing and favorable FX.

And separately share-based compensation increased to 5.8 million from 4.6 million in the prior year.

Capital expenditures were 13.2 million in Q4 essentially flat to last year.

Adjusted EBITDA decreased to $289 1 million.

Cash payments towards strategic transactions, restructuring related projects and other unusual. Non-recurring adjustments were 7.3 million versus 10 million dollars last year.

Excluding investment income of $52 7 million in the prior year, adjusted EBIT decreased $30 million or nine 4%, primarily driven by lower volume and a decline in gross profit partially offset by a reduction in operating expenses.

David Maura: I'll continue to push this team to go faster because I believe in the strategy, and I'm excited about the future of PEC. Moving to the home and garden business, as you may recall me saying before, we've been on a bit of a turnaround over the last couple of years since Javier joined the team. Javier has set the right tone for a high-performing team, with a culture anchored around growth, development, and employee engagement. We have had some highly successful innovation launches, and I'm really pleased with the progress the R&D team has made here. These new products have landed well with the consumer, and we're expecting this momentum to actually continue and build with exciting new product launches planned for fiscal 2026. I remain optimistic about the evolving M&A landscape.

And 492.3 million available on our 500 million cash flow revolver.

Adjusted free cash flow was $177 million or approximately $7 per share.

Total debt outstanding was approximately $581.4 million, consisting of $496 million of senior unsecured notes and $85.3 million of finance leases.

$7 cash per share exceeding the 160 million free cash flow framework previously provided.

We ended the quarter with 457.8 million of net debt.

During the year, we prioritize the health of our balance sheet through active management of Capex investments and improved working capital.

Turning to slide 13 and an overview of our full year results. Net sales decreased 5.2% and organic net sales is 5.3%.

Now, let's get into a review of each business unit, where I will provide you more details on the underlying performance drivers of our operational results.

I'll start with our global Pet care business, which is slide 14.

The sales performance was driven by category softness in light of macroeconomic conditions and supply shortages from the 6 to 8 weeks pause previously mentioned.

Reported net sales decreased one 5% and excluding favorable foreign currency impact organic net sales decreased three 3%.

David Maura: We expect to continue to pursue acquisition opportunities in both our Global Pet Care division and our home and garden businesses as additional assets become available at better price points. Lastly, on home and personal care, the most impacted of our three businesses by the latest trade policy volatility, the team has stepped up to the challenge. They've made meaningful changes to address our current reality. While we had a tough fiscal 2025, we are committed to maximizing the business's value, and we expect an improvement to overall profitability in fiscal 2026. We remain committed to the vision of finding a strategic solution for our HBC business. If I can now have everyone turn to slide nine, I'm going to give an overview of our high-level 2026 earnings framework. We expect net sales to be flat to up low single digits versus the prior year.

These had been significantly impacted results, both in our Global Pet Care and home and personal care businesses.

Sales in Aquatics increased high single digits offset by mid single digit decline in companion animal.

Despite strong performance by our key Brands sales and Home and Garden. Business was were modestly down driven by unfavorable weather conditions.

In North America, our companion animal brands continue to trend favorably.

Our brands maintained or gained market share driven by innovation and successful commercial activation, but our retail partners in spite of category softness.

In Aquatics, we successfully mitigated category declines and delivered improved results driven by distribution gains in pet specialty and mass channel.

For your gross. Profit decreased by 77.4 million and gross margin of 36.7%, decrease 70 basis points driven by lower volume higher inflation, increased tariff costs and unfavorable mix. This was partially offset by cost Improvement initiative pricing and favorable FX.

Comparisons for the quarter in both companion animal and Aquatics were impacted by our strategic pull forward of orders by retailers in the prior year in preparation for our S. Four Honda ERP implementation.

Resulting in an approximately $10 million headwind for the quarter.

Adjusted IBA decreased to 289.1% income of 52.7 million in the prior year, adjusted IBA, decreased $30 million or 9.4% primarily driven by lower volume, and a decline in gross profit partially offset by a reduction in operating expenses.

Also as expected our decisions to pass shipments for a six to eight week period when tariffs were at their highest point during the third quarter led to continued supply shortages during the current quarter.

David Maura: The external headwinds that suppressed consumer demand for the vast majority of fiscal 2025 are expected to continue, particularly in the first half of our fiscal year. Despite these external pressures, we believe Home and Garden and Global Pet Care are both positioned to resume growth in fiscal 2026, offsetting an expected decline in our Home and Personal Care business as we navigate through category softness and supply chain simplification initiatives that will reduce the product portfolio in North America. From an adjusted EBITDA perspective, we are targeting low single-digit growth, primarily driven by continued expense management, cost-improvement initiatives, and favorable FX offsetting lower volumes. The additional cost of tariffs are largely mitigated through a variety of actions, including pricing. Lastly, for adjusted free cash flow, we expect another strong year ahead at approximately 50% conversion of adjusted EBITDA.

Adjusted free cash flow was $170.7 million or approximately $7 per share.

$7 cash per share, exceeding the $160 million free cash flow framework previously provided.

Our inventory levels are now generally healthy and shortages are not expected to be a significant headwind heading into the fiscal 'twenty six.

During the year, we prioritize the health of our balance sheet through active management of capex, Investments and improved working capital.

Conversely results were favorable impacted by our decisions in the third quarter to stop shipment to a key retailer as tariff pricing negotiations stalled.

Now let's get into a review of each business unit. What? I'll provide you with more details on the underlying performance drivers of our operational results.

By the end of third quarter negotiations are complete but it did result in shipment delays benefiting our fourth quarter results.

I'll start with our Global Pet Care business, which is slide 14.

EMEA companion animal sales increased.

Reported net sales decreased 1.5%, and excluding favorable foreign currency impact, organic net sales decreased 3.3%.

Increased driven by the continued strength of our Goodbye brand.

Market share gains in the UK and expanding further in continental Europe.

Sales in Aquatics increased high single digits, offset by a mid single digit decline in companion animals.

In North America, our Companion Animal Brands, continue to Trend favorably.

Net sales also increased in our dog and cat food led by Eukanuba brand.

<unk> sales also increased in the Tetra brand gaining shares in key markets mitigating category softness.

Our Brands maintain or gain market, share driven by Innovation and successful commercial activations with our Retail Partners In Spite of category softness,

David Maura: Heading into the fiscal year, we are seeing signs of improved predictability in the macroeconomic environment, giving us the confidence to reinstate our earnings framework. We are focused on delivering on our goals to our investors. We believe this framework provides a challenging, but achievable, financial goal to the team as we look forward to a stronger fiscal 2026. Before I turn the call over to Faisal, I'd like to sincerely thank our outgoing Chief Financial Officer, Jeremy Smeltser. He's been a tremendous asset to me and the company, and helped us navigate through some really challenging times. I'm confident that Faisal will continue to drive strong execution and financial discipline in the years ahead, and I'm already enjoying my new partnership with him as my CFO. With that, I'll turn the call over to Faisal to share more on the financials and additional business unit insights.

Our innovation continues to resonate with the consumer and it's largely focused on further expansion into adjacent categories.

In Aquatics, we successfully mitigated category declines and delivered improved results driven by distribution gains in the pet specialty and mass channel.

You May recall, we recently launched Rainbow and calling them.

A product that focuses on health and wellness benefits for pets.

We also continue to launch new innovations in the treats categories.

Comparisons for the quarter in both Companion, Animal and Aquatics were impacted by a strategic pull forward of order by retailers in the prior year in preparation. For our S4 Hana Erp implementation,

As a good and tasty product launches continue to perform well, but are there plans of expansion and more unique innovations coming in in the coming months.

Resulting in an approximately 10 million headwind for the quarter.

Our investments in nature as medical.

Also continued to yield results.

The brand is gaining share and new points of distributions.

Also as expected our decisions to pass shipments for a 6 to 8 weeks period, when tariffs were at their highest point during the third quarter, led to continued supply shortages during the current quarter.

Our inventory levels are now.

In the fourth quarter nature of its medical grew across pure play online math food dollar and drug channels.

Ages are not expected to be.

Heading into the fiscal 26.

Goodbye brand is the number one brand in dock shoes in the U K and it's the fourth largest brand and overall pet and continues to grow market share driven by consistent innovation.

David Maura: The call is now yours, Faisal. Thank you, David. Turning to slide 11 and a review of our Q4 results from continuing operations, beginning with our net sales. Net sales decreased 5.2%, excluding the impact of $10.5 million of favorable foreign exchange. Organic net sales decreased 6.6%, primarily driven by supply constraints as a result of our decision to pause purchases from China for the US market during the third quarter, and continued category softness in our Global Pet Care and home and personal care business. These headwinds were partially offset by a delayed start to the season for our home and garden business that benefited current quarter results. Gross profit decreased $31.4 million, and gross margins of 35% decreased 220 basis points, largely driven by lower volume, unfavorable mix, inflation, and higher tariffs, partially offset by pricing, cost improvement actions, and favorable FX.

Conversely, results were favorably impacted by our decisions in the third quarter to stop shipment to a key retailer, as tariff pricing negotiations stalled.

The brand's expansion across Continental Europe continues to perform really well.

Most recently, becoming one of the top five treat brands in the Netherlands.

by the end of third quarter, negotiations were complete, but it did result in shipment delays benefiting our fourth quarter results,

And EMA, companion animal sales increased.

And Doug in Cat food, we're continuing to expand <unk> into more markets and recently launched a refreshed portfolio on eukanuba.

D increased driven by the continued strength of our good boy brand.

This quarter's adjusted EBITDA of $49 6 million or $5 3 million higher than the previous year and adjusted EBITDA margin of 16, 6% compared to 14, 6% last year.

Market share gains in the UK and expanding further in Continental Europe.

Net sales also increased in our dog and cat food led by Eukanuba brand.

Aquatic sales also increased with the Tetra brand gaining shares in key markets mitigating categories softness.

The improvement to adjusted EBITDA was primarily driven by expense management through cost savings initiatives announced earlier in the year lower investment spend due to category softness and pricing.

Our innovation continues to resonate with the consumer, and it's largely focused on further expansion into adjacent categories.

These actions more than offset the lower sales volume higher tariff costs and inflation experienced in the quarter.

You may recall. We recently launched stream bone Kam

Pro a product that focuses on health and wellness benefits for pets.

While the GPC fiscal 'twenty five sales fell short of the prior year due to macroeconomic and category headwinds. We believe the business is well positioned heading into fiscal 'twenty six and we expect to return to modest growth as underlying category fundamentals and macroeconomic trends begin to stabilize.

We also continue to launch new Innovations in the treats categories.

David Maura: Operating expenses of just over $227 million decreased 14.6% due to lower spend in advertising and marketing, and general expense management in light of category softness, as well as lower restructuring-related project spend. Operating income of $29.4 million increased by $7.5 million due to the lower operating expenses, partially offset by a decline in gross profit. GAAP net income and diluted earnings per share both increased, primarily driven by a one-time tax benefit for the quarter resulting from a tax entity realignment initiative, lower share count, and higher operating income. Adjusted EBITDA was $63.4 million, a decrease of $5.5 million driven by lower volume and reduced gross margins, partially offset by lower operating expenses. Adjusted diluted EPS increased to $2.61, driven by a one-time tax benefit that I referenced earlier, and the reduction in shares outstanding, partially offset by lower adjusted EBITDA.

In the coming months.

Our investments in Nature's miracles.

With generally healthy levels of inventory, we continue to be optimistic about our performance in the category.

Also, we continue to yield results as the brand is gaining share and new points of distribution.

With the recent wins and product distribution and placement together with the positive pace of sales and consumer acceptance of our innovation. We believe we will continue to outperform the category.

In the fourth quarter, Nature's Miracle grew across pure play online, Mass food dollar and Drug channels.

While consumers continue to be challenged we are encouraged by the overall resilience and strength of our brands.

A good boy. Brand is the number 1 brand in Doc shoes in the UK and it's the fourth. Largest brand in overall pet and continues to grow market. Share driven by consistent innovation.

The brands expansion across Continental Europe, continues to perform really well.

I'll now move to our home <unk> Garden business, which is on slide 15.

Most recently, becoming 1 of the top 5 treat brands in the Netherlands.

Net sales increased three 2% in the quarter, reflecting a delayed start to the season that pushed volume from the third quarter into the fourth quarter.

In dog and cat food, We are continuing to expand IMS into more markets and recently launched a refresh portfolio on Yukon nooba.

While July experienced favorable weather weather conditions, leading to an improved Pos and strong retailers reorder patterns unfavorable weather conditions across key regions in the latter half of the quarter negatively impact impacted Pos and shipments.

This quarter is adjusted. Ibida of 49.6 million is 5.3 million higher than the previous year and adjusted a bit of margin was 16.6% compared to 14.6% last year.

Net sales in control, which is our largest category in home and garden.

David Maura: Turning to slide 12, Q4 interest expense from continuing operations of $7.9 million increased $1.2 million due to higher average borrowing on our cash flow revolver in the current quarter. Cash taxes during the quarter decreased $10.2 million from the prior year. Depreciation and amortization of $23.9 million decreased $1.7 million from last year. Separately, share-based compensation increased to $5.8 million from $4.6 million in the prior year. Capital expenditures were $13.2 million in Q4, essentially flat to last year. Cash payment towards strategic transactions, restructuring-related projects, and other unusual non-recurring adjustments were $7.3 million versus $10 million last year. Moving to the balance sheet, we had a quarter-end cash balance of $123.6 million and $492.3 million available on our $500 million cash flow revolver. Total debt outstanding was approximately $581.4 million, consisting of $496 million of senior unsecured notes and $85.3 million of finance leases.

<unk>.

High teens as Petrofac continues to outperform the category with a strong finish to the quarter and home insect control and herbicides.

The Improvement to adjusted was primarily driven by expense management through cost savings initiatives. Announced earlier in the year lower investment spend due to category softness and pricing.

And household pet hotshot also gained share, but the share but the positive Pos while the overall category was flat.

These actions more than offset, the lower sales, volume higher tariff cost and inflation experience in the quarter.

We are particularly pleased with the recent innovation launch of our flying insect traps that continues to outperform the rest of the category.

<unk> sales were down mid single digits with soft net softness at key retailers driven by unfavorable weather conditions net sales and cleaning were also down for the quarter.

While GPC is still 25 sales, fell short of the prior year due to macroeconomic and category headwinds. We believe the business is well, positioned heading into fiscal 26 and we expect to return to modest growth as underlying category, fundamentals and macroeconomic Trends, begin to stabilize.

With generally healthy levels of inventory, we continue to be optimistic about our performance in the category.

As weather patterns evolve and shift Pos into the fall or late season program continue to gain incremental support from our key account partners with Activations for the quarter at four times, the number of stores as compared to last year.

With the recent wins in product distribution and placement together with the Positive pace of sales and consumer acceptance of our Innovation, we believe we will continue to outperform the category.

While consumers continue to be challenged, we are encouraged by the overall resilience and strength of our brands.

Our big bet innovations are gaining support from our retailers and resonating with consumers exceeding our expectation.

I'll now move to our Home and Garden business, which is on slide 15.

This year's innovation launch the spectrum side Wasp Hornet, and yellow jacket trap was a hit with consumers and quickly gained penetration within the category.

Net sales, increased 3.2% in the quarter, reflecting a delayed start to the season that pushed volume from the third quarter into the fourth quarter while July experienced favorable weather.

Earning one of the highest penetration of any new item and overall pest control.

<unk> performance was above expectations with additional paths to expand distribution and capacity heading into fiscal 'twenty six.

David Maura: We ended the quarter with $457.8 million of net debt. Turning to slide 13 and an overview of our full year results, net sales decreased 5.2% and organic net sales decreased 5.3%. The sales performance was driven by category softness in light of macroeconomic conditions and supply shortages from the six to eight weeks pause previously mentioned. These had significantly impacted results both in our Global Pet Care and home and personal care businesses. Despite strong performance by our key brands, sales in the home and garden business were modestly down, driven by unfavorable weather conditions. Full year gross profit decreased by $77.4 million, and gross margin of 36.7% decreased 70 basis points, driven by lower volume, higher inflation, increased tariff costs, and unfavorable mix. This was partially offset by cost improvement initiatives, pricing, and favorable FX.

Weather weather conditions leading to an improved PS and strong retailer reorder, patterns unfavorable weather conditions across key regions in the latter half of the quarter, negatively impact impacted PS and shipments.

The hotshot flying insect traps launch also performed very well with its strong value proposition.

net sales and controls which is our largest category in home and garden were

We're excited to see expanded distribution on this new product as well in fiscal 2006.

Up High Teens as Spectra site, continues to outperform the category with a strong finish to the quarter in home, insect control, and herbicides.

Adjusted EBITDA was $16 9 million compared to $19 million last year.

And the adjusted EBITDA margin was 12, 1% 200 basis points lower than the prior year.

In household pets, Hotshot also gain shared with the share with the Positive POS while the overall category was flat.

The decrease in adjusted EBITDA was driven by unfavorable mix inflation tariffs and incremental brand focused investments, partially offset by pricing productivity improvements and higher sales volume as our innovation continues to resonate with consumers.

We are particularly pleased with the recent innovation: the launch of our flying insect traps that continue to outperform the rest of the category.

Repellent sales were down mid single digits with softnet softness at Key retailers driven by unfavorable weather conditions.

Net sales and cleaning were also down for the quarter.

As we look forward to fiscal 2006, we believe retailer inventory levels are generally healthy.

We expect reorder patterns to closely align with Pos.

Our sales team will continue to work closely with our retail partners to understand consumer demand expectations and what it means to our production and shipment plan.

David Maura: Adjusted EBITDA decreased to $289.1 million, excluding investment income of $52.7 million in the prior year. Adjusted EBITDA decreased $30 million, or 9.4%, primarily driven by lower volume and a decline in gross profit, partially offset by a reduction in operating expenses. Adjusted free cash flow was $170.7 million, or approximately $7 per share, $7 cash per share, exceeding the $160 million free cash flow framework previously provided. During the year, we prioritized the health of our balance sheet through active management of CapEx investments and improved working capital. Now let's get into a review of each business unit where I'll provide you more details on the underlying performance drivers of our operational results. I'll start with our Global Pet Care business, which is slide 14. Reported net sales decreased 1.5%, and excluding favorable foreign currency impact, organic net sales decreased 3.3%.

As weather patterns evolve and shift into the fall, our late season programs continue to gain incremental support from our key account partners with activations. For the quarter, we are at four times the number of stores compared to last year.

We expect our category will continue to be well supported by our retail partners and the strength of our brands will continue to drive share growth.

Our big bet Innovations are getting support from our retailers and resonating with consumers. Exceeding. Our expectations

While weather is unpredictable early indications are that our retail partners expect a normal weather pattern for fiscal 'twenty six.

This year's Innovation launched the Spectre side, wasp Hornet and yellow jacket. Trap was a hit with consumers and quickly gained penetration within the category.

With precipitation and temperature is expected to go back to historical levels.

earning 1 of the highest penetrations of any new item in overall Pest Control,

Most of the Pos for our home <unk> Garden business comes in the second half of our fiscal year with the first half largely focused on preparation and staging for the seasonal business.

POS performance was above expectations, with additional PAMS to expand distribution and capacity heading into fiscal 26.

As a result timing of inventory builds can vary and impact quarterly results.

Our fiscal 'twenty five first quarter benefited from an earlier than normal seasonal inventory build as well as a pull forward of orders in advance of our S. Four go lives by certain retailers that we would not expect to repeat in fiscal 'twenty six.

The Hot Shot flying insect trap. Launch also performed very well with a strong value proposition. We're excited to see expanded Distribution on this new product as well in fiscal 26.

Adjusted IBA was 16.9 million compared to 19 million last year and the adjusted, even a margin was 12.1%, 200 basis points lower than the prior year.

Overall phasings of net overall phasing of net sales in home and garden are therefore expected to be similar to fiscal 'twenty four.

David Maura: Sales in aquatics increased high single digits, offset by mid-single digits decline in companion animals. In North America, our companion animal brands continue to trend favorably. Our brands maintained or gained market share, driven by innovation and successful commercial activations with our retail partners, in spite of category softness. In aquatics, we successfully mitigated category declines and delivered improved results, driven by distribution gains in pet specialty and mass channel. Comparisons for the quarter in both companion animal and aquatics were impacted by a strategic pull forward of orders by retailers in the prior year in preparation for our S/4HANA ERP implementation, resulting in an approximately $10 million headwind for the quarter. Also, as expected, our decisions to pause shipments for a six to eight weeks period when tariffs were at their highest point during the third quarter led to continued supply shortages during the current quarter.

And finally, moving to home <unk> personal care, which is slide 16.

Ported net sales decreased 11, 9%, excluding favorable foreign exchange organic net sales decreased 13, 4%.

Net sales in the personal care category were down low single digits. This quarter, while sales in home appliances were down double digits.

As we look forward to fiscal, 26, We Believe retailer inventory levels are generally healthy and we expect reorder patterns to quote the aligned with POS.

Organic net sales in EMEA were down double digits, but softness in both home appliances and personal care.

Our sales team will continue to work closely with our Retail Partners to understand consumer demand expectations and what it means to our production and shipment plans.

Lower consumer confidence continues to be a headwind in European markets impacting both personal care and home appliances categories. We have also seen an influx of Chinese competitors targeting the region in response to the higher tariffs in the U S. We continue to be nimble and evaluate new strategies to ensure our brands remain relevant to our consumers.

We expect our category will continue to be well supported by our Retail Partners, and the strength of Our Brands will continue to drive. Share growth

while whether it's unpredictable, early indications are that our Retail Partners, expect a normal weather pattern for fiscal 26,

With precipitation and temperatures expected to go back to historical levels.

In the current environment.

As the consumer moves increasingly to digital markets. Our near term focus is increasing our digital shelf space and ensuring our presence in all relevant channels.

David Maura: Our inventory levels are now generally healthy, and shortages are not expected to be a significant headwind heading into fiscal 2026. Conversely, results were favorable, impacted by our decisions in the third quarter to stop shipment to a key retailer as tariff pricing negotiations stalled. By the end of the third quarter, negotiations were complete, but it did result in shipment delays benefiting our fourth quarter results. In EMEA, companion animal sales increased, driven by the continued strength of our Good Boy brand, market share gains in the UK, and expanding further in continental Europe. Net sales also increased in our dog and cat food, led by a Yucanuba brand. Aquatic sales also increased with the Tetra brand gaining shares in key markets, mitigating category softness. Our innovation continues to resonate with the consumer, and is largely focused on further expansion into adjacent categories.

Most of the POS for our Home and Garden business comes in the second half of our fiscal year with the first half largely focused on Preparation and staging for the seasonal business.

In addition, one of our retailers experienced high inventory levels. Following a major sales event that negatively impacted replenishment orders, but in the quarter.

As a result timing of inventory, builds can vary and impact quarterly results.

North American sales decrease around 25% driven by lower sales from appliances.

Much like GPC Hbc's fourth quarter results were impacted by inventory availability constraints from the six to eight weeks pause on Chinese source products to the U S. When tariffs were at their highest point.

Our fiscal 25 first quarter benefited from an earlier than normal seasonal, inventory, build, as well as a pull forward of orders in advance of our S4 go live by certain retailers that we would not expect to repeat in fiscal 26.

Overall phasing of net overall, phasing of net sales in home and garden are therefore expected to be similar to fiscal 24.

Inventory levels are now generally healthy and shortages are not expected to be a significant headwind heading into fiscal 2026.

And finally, moving to Home and Personal Care, which is Slide 16.

Overall share was also impacted by pricing taken to offset cost of tariffs.

Reported net sales decreased 11.9% excluding favorable foreign exchange organic. Net sales decreased 13.4%.

You may recall last quarter that we were one of the first to negotiate pricing with our retail partners and Thats and thus our product were among the first to see tariff related price increase hit the shelves.

Net sales in the personal care category were down low single digits this quarter, while sales in home appliances were down double digits.

David Maura: You may recall we recently launched Greenbone Collium, a product that focuses on health and wellness benefits for pets. We also continue to launch new innovations in the treats categories, as our good and tasty product launches continue to perform well, with further plans of expansion and more unique innovations coming in the coming months. Our investments in Nature's Miracle also continue to yield results, as the brand is gaining share and new points of distributions. In the fourth quarter, Nature's Miracle grew across pure play online, mass, food, dollar, and drug channels. Our Good Boy brand is the number one brand in dog shoes in the UK, and is the fourth largest brand in overall pet and continues to grow market share, driven by consistent innovation.

We expect that this will normalize in the coming months as pricing goes into effect across the categories.

Or organic. Net sales in EMA were down double digits with softness. In both home appliances and personal care.

Personal care appliances sales increase in both brick and mortar and ecommerce channels benefiting from a softer prior year comparison.

Lower consumer confidence continues to be a headwind in European markets, impacting both the personal care and home appliances categories. We have also seen an influx of Chinese competitors targeting the region in response to the higher tariffs in the U.S.

Organic net sales in Latam grew high single digits.

With growth in both categories, driven by new product launches in personal care and distribution gains in the cookie category, but then home appliances.

We continue to be nimble and evaluate new strategies to ensure Our Brands remain relevant to our consumers in the current environment.

On the commercial side you May recall, we recently launched the <unk> XL Air Max at Walmart and our AD campaign is seeing strong consumer engagement. We also recently launched the Remington gloss collection exclusively at target stores and target Dot com.

As the consumer moves increasingly to digital markets are near-term. Focus is increasing our digital shelf space and ensuring our presence in all relevant channels.

In addition 1 of our retailers experienced, high inventory levels following a major Sales Event, the negatively impacted replenishment orders within the quarter.

The new line of filing tools is designed to deliver high gloss results and offer a wide variety of styling tools and.

David Maura: The brand's expansion across continental Europe continues to perform really well, most recently becoming one of the top five treat brands in the Netherlands. In dog and cat food, we are continuing to expand IAMS into more markets and recently launched a refreshed portfolio on EUKANUBA. This quarter's adjusted EBITDA of $49.6 million is $5.3 million higher than the previous year. Adjusted EBITDA margin was 16.6% compared to 14.6% last year. The improvement to adjusted EBITDA was primarily driven by expense management through cost savings initiatives announced earlier in the year, lower investment spend due to category softness, and pricing. These actions more than offset the lower sales volume, higher tariff cost, and inflation experienced in the quarter.

North American sales decreased around 25%, driven by lower sales in home appliances.

In Latam, our Remington brand saw a record quarterly sales in the fourth quarter after brand refresh initiatives, resulting in distribution gains.

<unk> continues to be a compelling market for our APC business and we are excited about our plans to introduce a rest of the hub brands to the market in the coming months.

Much like GPC, hpc's. Fourth quarter results were impacted by inventory, availability, constraints from the 6 to 8 weeks, pause on Chinese Source Products to the US when tariffs were at their highest point.

We continue to be pleased with our launch on Tictoc and U K.

our inventory levels are now generally healthy and shortages are not expected to be a significant headwind heading into fiscal 2026,

Where our products are resonating with consumers closing closing the year with another record month.

Overall share was also impacted by pricing taken to offset the cost of tariffs.

We plan to build upon the success, we're seeing in the U K and take these best practices to other markets in the near future.

This quarter's adjusted EBITDA was $15 7 million compared to $19 million in the prior year.

You may recall last quarter that we were 1 of the first to negotiate pricing with our Retail Partners and thus and thus our product were among the first to see tariff related price increase, hit the shelves.

Adjusted EBITDA margin was five 3% the decline in adjusted EBITDA was driven by lower volumes unfavorable mix and cash. These significant headwinds were largely offset by pricing lower brand focused investments in light of tariff supply issues reduced distribution costs and expense management as we actively address.

We expect that this will normalize in the coming months as pricing goes into effect across the categories.

David Maura: While GPC's fiscal 2025 sales fell short of the prior year due to macroeconomic and category headwinds, we believe the business is well positioned heading into fiscal 2026, and we expect to return to modest growth as underlying category fundamentals and macroeconomic trends begin to stabilize. With generally healthy levels of inventory, we continue to be optimistic about our performance in the category. With the recent wins in product distribution and placement, together with the positive pace of sales and consumer acceptance of our innovation, we believe we will continue to outperform the category. While consumers continue to be challenged, we are encouraged by the overall resilience and strengths of our brands. I'll now move to our home and garden business, which is on slide 15.

Personal Care, appliances sales increase in both brick and mortar and e-commerce channels benefiting from a softer prior year comparison.

<unk>, our fixed cost structure.

Organic net sales in LATAM grew high single digits, with growth in both categories driven by new product launches and personal care, as well as distribution gains in the cooking category within home appliances.

As we look forward to fiscal 'twenty, we expect softness in global consumer demand for durables to continue.

<unk> to the prior year. This is expected to be most impactful to our first quarter results.

In North America tariff related disruptions are expected to reduce sales volume as we prioritize our overall financial health and rightsize the business.

On the commercial side, you may recall. We recently launched the power XL Air Max at Walmart and our ad campaign is seeing strong consumer engagement. We also recently launched a Remington gloss collection exclusively at Target stores and target.com.

The new line of siling tools is designed to deliver high gloss results and offer a wide variety of styling tools.

HBC, we will continue to evolve as we reduce our U S SKU count to simplify our supply chain and diversify our supply base, while maintaining overall profitability through increased scale on a smaller subset of product offerings in EMEA in EMEA, our largest market, we expect category softness and increased <unk>.

David Maura: Net sales increased 3.2% in the quarter, reflecting a delayed start to the season that pushed volume from the third quarter into the fourth quarter. While July experienced favorable weather conditions, leading to an improved POS and strong retailer reorder patterns, unfavorable weather conditions across key regions in the latter half of the quarter negatively impacted POS and shipments. Net sales in controls, which is our largest category in home and garden, were up high teens as Spectracide continues to outperform the category with a strong finish to the quarter in home insect control and herbicides. In household pet, Hot Shot also gained share with the positive POS, while the overall category was flat. We are particularly pleased with the recent innovation launch of our flying insect traps that continues to outperform the rest of the category.

In latam, or Remington brand saw a record quarterly sales in the fourth quarter after brand, refresh initiatives resulting in distribution gains.

the time continues to be a compelling market for our HPC business and we are excited about our plans to introduce our Russell Hub Brands to the market, in the coming months,

Competition to continue while we expand our presence in the direct to consumer channel, helping to partially offset consumer confidence headwinds.

We continue to be pleased with our launch on Tik, Tok and UK.

Now turning to slide 17, and our expectations are.

Where our products are resonating with consumers, closing closing the year, with another record month.

Fiscal 2006.

We expect net sales to be flat to up low single digits compared to the prior year.

While we expect growth in both our home personal bye.

This quarter is adjusted. I was 15.7 Million compared to 19 million in the prior year.

And our global pet care and home and garden business, our home <unk> personal care business is expected to decline due to continued category softness.

And our supply chain simplification initiatives in the North American market adjust.

Adjusted EBITDA is expected to grow low single digits driven by the return.

Sales growth in our global pet care and home and Garden business continued expense management continuous improvement initiatives and FX favorability offsetting lower volumes and home and personal care tariffs.

David Maura: Repellent sales were down mid-single digits, with softness at key retailers driven by unfavorable weather conditions. Net sales and cleaning were also down for the quarter. As weather patterns evolve and shift POS into the fall, our late-season program continued to gain incremental support from our key account partners, with activations for the quarter at four times the number of stores as compared to last year. Our big bet innovations are gaining support from our retailers and resonating with consumers, exceeding our expectations. This year's innovation launch, the Spectracide Wasp Hornet and Yellow Jacket Trap, was a hit with consumers and quickly gained penetration within the category, earning one of the highest penetrations of any new item in overall pest control. POS performance was above expectations, with additional plans to expand distribution and capacity heading into fiscal 2026.

The adjusted, even the margin was 5.3%, the decline in adjusted Eva was driven by lower volumes unfavorable makes and tariffs. These significant headwinds were largely offset by pricing lower brand focused investments in light of tariff, supply issues, reduced distribution costs and expense management as as we actively address our fixed cost structure.

As we look forward to fiscal 26, we expect softness and Global consumer demand for durables to continue.

Tariffs are expected to be largely offset through through the various mitigation actions, which we have taken including pricing.

Compared to the prior year, this is expected to be most impactful to our first quarter results.

I do want to point out that in our model, we have fiscal 2026 corporate costs at approximately $66 million up from $54 million in fiscal 'twenty five.

In North America, care of related disruptions are expected to reduce sales volume. As we prioritize our overall financial health and right-size the business.

As you will recall in fiscal 'twenty, five we had a little over $20 million in TSA cost reimbursements from our sale of <unk> that do not repeat in fiscal 2006.

We have mitigated approximately half of the cost had been thus far and intend to address the remaining $10 million during the coming quarters.

HBC will continue to evolve as we reduce. Our us CQ count to simplify our supply chain and diversify our supply base while maintaining overall profitability through increased scale on a smaller subset of product offerings.

From a phasing perspective, we expect the first quarter to be the most challenged primarily due to the shift in consumer sentiment in the middle of the prior year prior fiscal year.

In any in emea, our largest market, we expect category softness and increase competition to continue. While we expand our presence, the direct to Consumer Channel, helping to partially offset consumer confidence. Headwinds

We also expect retailers to reorder patterns will generally more class a closely aligned with Pos which is which is expected to be most impactful to our home and garden business given the earlier buying of inventory in fiscal 'twenty five.

David Maura: The Hot Shot Flying Insect Trap launch also performed very well with its strong value proposition. We're excited to see expanded distribution on this new product as well in fiscal 2026. Adjusted EBITDA was $16.9 million compared to $19 million last year, and the adjusted EBITDA margin was 12.1%, 200 basis points lower than the prior year. The decrease in adjusted EBITDA was driven by unfavorable mix, inflation, tariffs, and incremental brand-focused investments, partially offset by pricing, productivity improvements, and higher sales volume as our innovation continues to resonate with consumers. As we look forward to fiscal 2026, we believe retailer inventory levels are generally healthy, and we expect reorder patterns to closely align with POS. Our sales team will continue to work closely with our retail partners to understand consumer demand expectations and what it means to our production and shipment plans.

Now, turning to slide 17 and our expectations are of fiscal 26.

We expect net sales to be flat to up low single digits, compared to the prior year.

And lastly, adjusted free cash flow conversion as a percentage of adjusted EBITDA is expected to be around 50% as we continue to prioritize the strength of our balance sheet.

While we expect growth in both, our home, uh, personal uh, by uh, in our Global Pet Care and Home and Garden business, our home and personal care. Business is expected to decline, due to continued category softness,

And our supply chain simplification initiative in the North American Market.

Depreciation and amortization is expected to be between $115 million or 102120 $5 million.

Including stock based compensation of approximately 20% to $25 million cash payments to various restructuring optimization and strategic transaction cost are expected to be between 25 and $35 million.

Adjusted to grow low single digits, driven by the return to sales growth in our Global Pet Care and Home and Garden businesses, continuous expense management, continuous improvement initiatives, and FX favorability, offsetting the lower volumes in Home and Personal Care.

Capital expenditures are expected.

Tariffs are expected to be, largely offset through through the various mitigation actions, which we have taken including pricing.

To be between $50 million $60 million.

Cash taxes are expected to be between 40 and $50 million for adjusted EPS, We use an effective tax rate of 28% including state taxes.

I do want to point out that in our model we have fiscal 2026 corporate costs at at approximately 66 million up from 54 million in fiscal 2525.

When my section I want to Echo David and thank all of our global employees for their hard work. During these very challenging times back to you David.

David Maura: We expect our category will continue to be well supported by our retail partners, and the strength of our brands will continue to drive share growth. While weather is unpredictable, early indications are that our retail partners expect a normal weather pattern for fiscal 2026, with precipitation and temperatures expected to go back to historical levels. Most of the POS for our home and garden business comes in the second half of our fiscal year, with the first half largely focused on preparation and staging for the seasonal business. As a result, timing of inventory builds can vary and impact quarterly results. Our fiscal 2025 first quarter benefited from an earlier than normal seasonal inventory build, as well as a pull forward of orders in advance of our S/4HANA go-live by certain retailers that we would not expect to repeat in fiscal 2026.

As you will recall, in fiscal 2025, we had a little over $20 million in TSA cost reimbursements from our sale of HHI that do not repeat in fiscal 2026.

Hey, Thanks Russell.

Slide 19.

We have mitigated approximately half of the cost had been thus far and intend to address the remaining 10 million during the coming quarters.

Thanks to everybody for joining us today on our call.

From a phasing perspective.

I will take a few minutes just to recap the key takeaways finding so on slide 20.

Fourth quarter financial results conclude a very challenging year for us we took decisive actions as I've mentioned they were necessary to protect the company and the balance sheet.

We expect the first quarter to be the most challenged primarily due to the shifts in consumer sentiment in the middle of the prior year, prior fiscal year.

It did have short term impacts on the P&L and that's reflected in the numbers we reported today.

we also expect retail early order patterns, will generally more closely aligned with PS, which is a which is expected to be most impactful to our Home and Garden business given the earlier buying of inventory in fiscal 25

We will continue to be good stewards of the business is going forward, we will be disciplined in our auctions, while utilizing our strong balance sheet.

As you know earlier in the year with all the macroeconomic uncertainty we made the strategic pivot and started running this business to maximize free cash flow I'm proud that this decision paid off we were able to deliver over $170 million of roughly $7 per share and free cash flow to our investors on.

Lastly, adjusted free cash flow conversion as a percentage of adjusted EBITDA is expected to be around 50% as we continue to prioritize the strength of our balance sheet.

Appreciation and memorization.

Is expected to be.

David Maura: Overall phasing of net sales in home and garden are therefore expected to be similar to fiscal 2024. Finally, moving to home and personal care, which is slide 16, reported net sales decreased 11.9%. Excluding favorable foreign exchange, organic net sales decreased 13.4%. Net sales in the personal care category were down low single digits this quarter, while sales in home appliances were down double digits. Organic net sales in EMEA were down double digits, with softness in both home appliances and personal care. Lower consumer confidence continues to be a headwind in European markets, impacting both personal care and home appliances categories. We have also seen an influx of Chinese competitors targeting the region in response to the higher tariffs in the US. We continue to be nimble and evaluate new strategies to ensure our brands remain relevant to our consumers in the current environment.

115 million and 120 125 million dollars.

These actions are now embedded quite frankly in our DNA.

We continue to focus on this going forward.

We're really excited to report quite frankly that both the global pet care and home and garden businesses, which are two most highly valued businesses, they're going to they're going to return we're expecting them to return to growth in fiscal 'twenty six.

Including stock based compensation of approximately 20 to 25 million dollars, cash payments towards restructuring, optimization and strategic. Transaction costs are expected to be between 25 and 35 million.

Capital expenditures are expected.

To be between 50 and 60 million dollars.

We're excited about that we believe in the categories and we believe in our teams in these businesses or new product development pipeline is strong and we continue to focus on launching fewer bigger better initiatives for successful commercialization as we move this company forward.

Cash, taxes are expected to be between 40 and 50 million.

For adjusted EPS, we use an effective tax rate of 28%, including state taxes.

I also continue to be optimistic about the evolving M&A landscape, we expect additional assets to become available at better price points and with that said, we will remain disciplined in our process as we look for highly synergistic assets, while being mindful of maintaining our lower leverage we are confident that despite the current headwinds that were largely us.

To end my SE section, I want to echo David and thank all of our global employees for their hard work. During these very challenging times, back to you, David.

Hey, thanks vessel. Uh, let's look at slide, 19. Uh, thanks everybody for joining us today on the call. Uh again I'll take a few minutes just to recap, the key takeaways, you can find the ins on slide 20.

David Maura: As the consumer moves increasingly to digital markets, our near-term focus is increasing our digital shelf space and ensuring our presence in all relevant channels. In addition, one of our retailers experienced high inventory levels following a major sales event that negatively impacted replenishment orders within the quarter. North American sales decreased around 25%, driven by lower sales in home appliances. Much like GPC, HPC's fourth quarter results were impacted by inventory availability constraints from the six to eight weeks pause on Chinese-sourced products to the US when tariffs were at their highest point. Our inventory levels are now generally healthy, and shortages are not expected to be a significant headwind heading into fiscal 2026. Overall share was also impacted by pricing taken to offset cost of tariffs.

Out of our control we are a stronger more focused company as we move the business forward in its strategic transformation.

We will continue to be good stewards of this appliance business focused on overall profitability improvement as we navigate a challenging environment and we remain committed to finding a strategic solution for this asset.

Uh, fourth quarter Financial results. Concluded, a very challenging year for us. Uh, we took decisive actions. As I've mentioned, they were necessary to protect the company and the balance sheet, but it did have short-term impacts on the p&l. And that's uh, reflected in the numbers we reported today.

Uh, we will continue to be good stewards of the businesses going forward. Uh, we'll be disciplined in our actions while utilizing a strong balance sheet.

S trade policy stabilizes and consumer sentiment improves we believe synergistic growth opportunities are on the horizon with a higher probability of consolidations in this space, which we believe frankly is long overdue. We are committed to executing on our operational goals delivering improved business performance and driving value to our stakeholders.

Again, I think the good news today with today's call, we believe that the worst of the tariff and economic disruptions to our business are behind US we expect our two highest value businesses global picture and global Hawk home and garden to return to growth in fiscal 'twenty six we're going to continue generating a lot of free cash flow as we go forward.

David Maura: You may recall last quarter that we were one of the first to negotiate pricing with our retail partners, and thus our products were among the first to see tariff-related price increases hit the shelves. We expect that this will normalize in the coming months as pricing goes into effect across the categories. Personal care appliances sales increased in both brick-and-mortar and e-commerce channels, benefiting from a softer prior year comparison. Organic net sales in Latam grew high single digits, with growth in both categories driven by new product launches in personal care, and distribution gains in the cooking category within home appliances. On the commercial side, you may recall we recently launched the PowerXL Air Max at Walmart, and our ad campaign is seeing strong consumer engagement. We also recently launched a Remington gloss collection exclusively at Target stores and target.com.

Balance sheet is strong and we continue returning lots of capital to shareholders through buybacks and dividends as we move this business forward.

I will turn the call back over to Jen and we'll be very happy to take your questions.

Business to maximize free cash flow. I'm proud that this decision paid off. We were able to deliver over 170 million or roughly $7 per share in free cash flow, uh, to our investors. Uh, and these actions are now embedded, quite frankly in our DNA, and we're going to continue to focus on this going forward. Uh, we're really excited to report quite frankly that both the global PEC here and home and garden businesses, which are 2, most high, highly value businesses. They're going to, they're going to return and we're expecting them to return to growth in fiscal 26. Uh, we're excited about that, we believe in the categories and we believe in our teams. In these businesses, our new product development pipeline is strong. And we're going to continue to focus on launching fewer bigger better initiatives for successful commercialization as we move this company forward,

Thank you David operator, we can go to the question.

Ladies and gentlemen, as a reminder to ask a question at this time you will need to press star one on your telephone.

Planning to be announced until a question simply press star one again, please standby, while we compile the Q&A roster.

I also continue to be optimistic about the evolving M&A landscape. We expect additional assets to become available at better price points. With that said, we will remain disciplined in our process as we look for highly synergistic assets, while being mindful of maintaining our lower leverage.

Yes.

No first question coming from the line of Chris <unk> with Wells Fargo Securities. Your line is now open.

We are confident that despite the current headwinds that we that were largely outside of our control. We are a stronger more focused company as we move the business forward and its strategic transformation.

Hi, everyone.

Hello.

Morning.

Ken.

Can we just get updated.

David Maura: The new line of styling tools is designed to deliver high gloss results and offer a wide variety of styling tools. In Latam, our Remington brand saw record quarterly sales in the fourth quarter after brand refresh initiatives, resulting in distribution gains. Latam continues to be a compelling market for our HPC business, and we are excited about our plans to introduce our Russell Hobbs brands to the market in the coming month. We continue to be pleased with our launch on TikTok in the UK, where our products are resonating with consumers, closing the year with another record month. We plan to build upon the success we're seeing in the UK, and take these best practices to other markets in the near future. This quarter's adjusted EBITDA was $15.7 million compared to $19 million in the prior year. The adjusted EBITDA margin was 5.3%.

We will continue to be good stewards of this appliance business, focused on overall profitability improvement as we navigate a challenging environment. We remain committed to finding a strategic solution for this asset.

Thought process around the various options for the.

HBC business, both strategic but also.

As trade policy, stabilizes and consumer sentiment improves. We Believe synergistic growth opportunities are on the horizon with a higher probability of consolidations in this space, which we believe frankly is long overdue.

Fundamental as you as you continue to run the business I realize you.

You've had comments in the press release.

We are committed to executing on our operational goals, delivering improved, business performance, and driving value to our stakeholders.

In the prepared remarks around and still looking for strategic alternatives, but so.

Can we just dig a bit deeper into the potential outcomes that you're seeing.

Weather changing tariff backdrop.

Evolves those potential outcomes.

Any any sort of update on how you see the trough year.

The short answer is no because im not going to discuss M&A opportunities on a lot of public call.

A more broad response to your question would be.

Again, I think the good news, uh, today. With today's call, we believe that the worst of the Tariff and economic disruptions to our business are behind us. We expect our 2, highest value, businesses, Global peek here, and Global Home, and Garden to return to growth in fiscal 26. We're going to continue generating a lot of free cash flow as we go forward. The balance sheet is strong and we're going to continue returning, lots of capital to shareholders through BuyBacks and dividends as we move this business forward,

It's pretty obvious when youre dealing with $450 million of tariff headwinds that it will sideline a process with the strategic.

I'll turn the call back over to Jen and we'll be very happy to take your questions.

David Maura: The decline in adjusted EBITDA was driven by lower volumes, unfavorable mix, and tariffs. These significant headwinds were largely offset by pricing, lower brand-focused investments in light of tariff supply issues, reduced distribution costs, and expense management, as we actively address our fixed cost structure. As we look forward to fiscal 2026, we expect softness in global consumer demand for durables to continue. Compared to the prior year, this is expected to be most impactful to our first quarter results. In North America, tariff-related disruptions are expected to reduce sales volume as we prioritize our overall financial health and right-size the business. HPC will continue to evolve as we reduce our US queue count to simplify our supply chain and diversify our supply base, while maintaining overall profitability through increased scale on a smaller subset of product offerings.

Thank you, David Operator. We can go to the question queue now.

Parties for completing a synergistic.

Merger, if you will.

And so we've got a very robust process about a year ago. At this time that got derailed by trade policy or the United States.

Certainly, ladies and gentlemen, as a reminder, to ask a question at this time, you will need to press star 1, 1 on your telephone and wait for your name to be announced to withdraw your question. Simply press star 1 1. Again please, stand by while we compile the Q&A roster.

Pivoted to run the business to maximize cash we're taking the fixed expense base of that business down.

Now, first question, coming from the line of Chris Gary with Wells, Fargo security, see your line is now open.

Basically deal with the realities of the current economic situation, we have materially diversified supply chain and they're made it more resilient and less reliant on China.

Hi everyone. Hello.

Morning.

We're going to improve the profitability of appliances in fiscal 'twenty six as we move the company forward and we're telling you that as the trade situation becomes less volatile moving forward and macroeconomic headwinds subside.

Can, um, can I can we just get updated?

We're excited to resume our strategic distrust discussions around finding a strategic solution for the business, which we believe there are many frankly this industry is littered with small competitors that are subscale and barely profitable and most of them over levered and some of them will go bankrupt, we intend to capitalize on that because we're the strongest player in the space.

David Maura: In EMEA, our largest market, we expect category softness and increased competition to continue while we expand our presence in the direct-to-consumer channel, helping to partially offset consumer confidence headwinds. Now turning to slide 17 and our expectations of fiscal 2026, we expect net sales to be flat to up low single digits compared to the prior year. While we expect growth in both our home and personal care, in our global pet care and home and garden business, our home and personal care business is expected to decline due to continued category softness and our supply chain simplification initiative in the North American market. Adjusted EBITDA is expected to grow low single digits, driven by the return to sales growth in our global pet care and home and garden business, continued expense management, continuous improvement initiatives, and FX favorability, offsetting the lower volumes in home and personal care.

Yes.

Helpful. Thank you just on a.

Follow up on the pet category.

Thought process around, you know, the various options for, uh, the HPC business both strategic. But also, uh, you know, fundamental as you as you continue to run the business, I I realize you've, you've you've had comments and the press release and the and the prepared remarks around and still looking for strategic Alternatives, but can we just dig a bit deeper into the potential outcomes that you're seeing? Um, you know whether changing and tariff backdrop give you know, evolves those potential outcomes and just you know any any sort of update on on how you see the path here.

You've worked through.

Period of <unk>.

Hence competitive activity.

Including from some large private label competitors.

Or are we in that journey.

That business and I think <unk> said, it a bit more confident about.

Shelf placement in some stabilization in the go forward potential and return to growth. So.

Can you just.

Help us understand the journey and how you see the next 12 months. Thanks.

Really happy to thank you for the question and I'll turn it over to fossil and I'm done for any additional remarks, but look we're thrilled because we've infused the business with some new talent.

David Maura: Tariffs are expected to be largely offset through the various mitigation actions which we have taken, including pricing. I do want to point out that in our model, we have fiscal 2026 corporate costs at approximately $66 million, up from $54 million in fiscal 2025. As you will recall, in fiscal 2025, we had a little over $20 million in TSA cost reimbursements from our sale of HHI that do not repeat in fiscal 2026. We have mitigated approximately half of the cost headwind thus far, and intend to address the remaining $10 million during the coming quarters. From a phasing perspective, we expect the first quarter to be the most challenged, primarily due to the shift in consumer sentiment in the middle of the prior fiscal year.

<unk> got some new direction, it's got a higher level of energy to it.

Team is embracing a more data driven consumer insight I would tell Ya geographic category specific analysis of that business.

I mean the short answer is no because I'm not going to discuss m&a opportunities on a live public call. Uh a more broad response to your question would be, uh, it's pretty obvious when you're dealing with 450 million dollars of tariff, headwinds, that it will sideline a process, uh, with strategic, uh, parties for, for completing a synergistic. Uh, you know, um, merger, uh, if you will. Uh, and so we had a very robust process, you know, about a year ago at this time that got derailed by trade policy out of the United States. Um, we pivoted to run the business to maximize cash. Uh, we're taking the fixed, uh, expense base of that business down, uh, to basically deal with the realities of the current economic situation. We've materially Diversified the supply chain there, made it more resilient and less reliant on China. Uh we are going to improve the profitability of appliances in fiscal 2026 as we move the company forward and we're telling you that as the trade situation, becomes less volatile moving forward and Mac.

In terms of your comment on private label, Yeah. We saw some competition there post COVID-19 the entire pet industry has kind of been in a recession.

Economic headwinds subside. We are excited to resume our strategic discussions around finding a strategic solution for the business, which we believe there are many.

We were able to kind of reset some modest in some shelf space with some major players just a few months ago, we're seeing much better trends now with that done in terms of takeaway Pos and frankly shipments but.

Subscale and barely profitable and most of them over levered and some of them will go bankrupt. We intend to capitalize on that because with the strongest player in space

<unk> been improving pretty consistently so that's why you hear much more bullish outlook for the business looking into 'twenty six but more importantly, there were branded ankle biters that entered into this space antibody that had access to social media and the Chinese product could kind of come in here and nibble out yet.

David Maura: We also expect retailer reorder patterns will generally more closely align with POS, which is expected to be most impactful to our home and garden business given the earlier buy-in of inventory in fiscal 2025. Lastly, adjusted free cash flow conversion as a percentage of adjusted EBITDA is expected to be around 50% as we continue to prioritize the strength of our balance sheet. Depreciation and amortization is expected to be between $115 million and $125 million, including stock-based compensation of approximately $20 to $25 million. Cash payments towards restructuring, optimization, and strategic transaction costs are expected to be between $25 and $35 million. Capital expenditure is expected to be between $50 and $60 million. Cash taxes are expected to be between $40 and $50 million. For adjusted EPS, we use an effective tax rate of 28%, including state taxes.

We are seeing people go by the wayside and we're seeing products like Nature's Miracle really take a lot of market share because the product actually works does what it says in a lot of competitive products simply does not.

So look I think it's still early early innings.

We're making incremental progress, but we are launching a lot of new product, we're getting a better response from the retail customer and consumers seem to be buying our product at a greater rate.

Helpful. Thank you, just on, um, you know, follow up on, on, on the pet category. Um, you know, you've, you've worked through, uh, a period of, uh, intense competitive activity, uh, including from, uh, some large private label. Uh, competitors. You know, where where are we, you know, in a journey of of, of the pet business and, you know, I think you've said it a bit more confident about, you know, uh, shelf placement and some stabilization and, and go forward, you know, potential and return to growth. So, um, you know, can can you just maybe help us understand the journey and, and and, and how you see the next 12 months? Thanks.

And then quite frankly, I think this is going to be a fantastic M&A platform.

My vision of getting us to $3 billion of revenue and $500 million of EBITDA and Pat is unchanged from the prior call and in fact, I am seeing more and more assets come to market at better prices. We have missed on a few of them because we simply refuse to overpay, but we will find highly synergistic businesses that complement.

Yeah, really happy. Thank you for that question. And you know, I'll turn it over to fessel when I'm done for any additional remarks. But look, we are thrilled because we've infused that business with some new Talent. Uh, it's got some new Direction. It's got a higher level of energy to it. Um, the team is embracing, a more data driven consumer Insight. I would tell you, Geographic, uh, category

<unk>.

David Maura: To end my section, I want to echo David and thank all of our global employees for their hard work during these very challenging times. Back to you, David. Hey, thanks, Faisal. Let's look at slide 19. Thanks, everybody, for joining us today on the call. Again, I'll take a few minutes just to recap the key takeaways and findings on slide 20. Fourth quarter financial results conclude a very challenging year for us. We took decisive actions, as I've mentioned. They were necessary to protect the company and the balance sheet, but it did have short-term impacts on the P&L, and that's reflected in the numbers we reported today. We will continue to be good stewards of the businesses going forward. We'll be disciplined in our actions while utilizing a strong balance sheet.

This platform from both the cost synergy and revenue synergy standpoint, and I'm really looking forward to that opportunity to capitalize on it I. Appreciate the question first of all I Miss anything.

Well I think you've covered it the only thing I'll add is just if you look at our performance through the year, you kind of see the signs of stabilization and how our Q4 certainly seem too.

Be heading in the right direction for the global Pet care business and we do feel that's the one business that returns to growth faster.

Faster.

Just based on where the category stance and to David's point, how are our products have recently done in each of the categories that we plan and we also have expansion opportunities like we referenced in our prepared remarks about expanding into adjacent categories. There. So a lot of opportunity for the global pet care business.

David Maura: As you know, earlier in the year, with all the macroeconomic uncertainty, we made the strategic pivot and started running this business to maximize free cash flow. I'm proud that this decision paid off. We were able to deliver over $170 million, or roughly $7 per share in free cash flow to our investors. These actions are now embedded, quite frankly, in our DNA, and we're going to continue to focus on this going forward. We're really excited to report, quite frankly, that both the global pet care and home and garden businesses, which are our two most highly valued businesses, are going to return. We're expecting them to return to growth in fiscal 2026. We're excited about that. We believe in the categories, and we believe in our teams in these businesses.

Okay. Thanks, guys.

Thank you. Thank you.

Thank you. Our next question coming from the line of Bob <unk> with CJS Securities. Your line is now open.

Specific, uh, analysis of that business. Um, you know, in terms of your comment on private label, we saw some competition there. You know, post-COVID, the entire pet industry has kind of been in a recession. Um, we were able to reset some mods and some shelf space with some major players. Just a few months ago, we’re seeing much better trends now with that done in terms of takeaway POS, and frankly, shipments have been improving pretty consistently. So, that’s why you hear a much more bullish outlook for the business looking into 2026. Uh, but more importantly, you know, there were branded ankle-biters that entered into this space. Uh, anybody that had access to, you know, social media and the Chinese product could kind of come in here and nibble at you. Uh, we are seeing people go by the wayside, and we are seeing products like Nature’s Miracle really take a lot of market share because the product actually works, does what it says, and a lot of competitive products simply do not. Um, so look, I think.

Good morning, Thanks for taking our questions and congratulations on solid execution in a obviously a really tough year.

Hey, Bob how are you doing man we're up.

Doing well. Thank you yeah, I know good as I said nice job, it's good to chat again.

I wanted to start I know this is a kind of a category and product basis questions. So maybe we can dig in a little and questions.

Uh, it's still early innings. Um, we're making incremental progress, but, you know, we are launching a lot of new products, we are getting a better response from the retail customer, and consumers seem to be buying our product at a greater rate. Um, and then quite frankly, I think this is going to be a fantastic M&A platform. Um, my vision of getting us to $3 billion in revenue and $500 million in EBITDA in pet is unchanged from the prior call. In fact, I'm seeing more and more assets come to market at better prices. We have missed on a few of them because we seem...

David Maura: Our new product development pipeline is strong, and we're going to continue to focus on launching fewer, bigger, better initiatives for successful commercialization as we move this company forward. I also continue to be optimistic about the evolving M&A landscape. We expect additional assets to become available at better price points. With that said, we will remain disciplined in our process as we look for highly synergistic assets while being mindful of maintaining our lower leverage. We are confident that despite the current headwinds that were largely outside of our control, we are a stronger, more focused company as we move the business forward in its strategic transformation. We will continue to be good stewards of this appliance business, focused on overall profitability improvement as we navigate a challenging environment, and we remain committed to finding a strategic solution for this asset.

Is pricing going up at retail for your categories products et cetera kind of in aggregate and and when do you expect to get clarity on consumer acceptance of that how has that been playing out so far.

Simply refused to overpay uh but we will find highly synergistic businesses that complement. This this this uh this platform from both the cost Synergy and revenue Synergy standpoint. And I'm I'm really looking forward to that opportunity to to capitalize on it. Appreciate the question, the Russell, I missed anything.

Yes, great question.

I'm kind of stunned at how little pricing mix, we have to take.

I thought February March when I was hardly sleep and staring at 450 million of challenges that we'd have to take a lot more pricing than we actually did.

No, I think you've covered it. The only thing I'll add is just if you look at our performance to the year, you kind of see the signs of stabilization and how our Q4 certainly seem to

be heading in the right direction for the global pet care business. And we do feel that someone business that returns to growth.

But that resulted in us having to take a lot of internal pain and make some very difficult decisions to remain competitive with shelf, we had to take down.

Fixed costs salary head count and that's not fun to do.

But we've done it and it's in the past.

David Maura: As trade policy stabilizes and consumer sentiment improves, we believe synergistic growth opportunities are on the horizon, with a higher probability of consolidations in this space, which we believe, frankly, is long overdue. We are committed to executing on our operational goals, delivering improved business performance, and driving value to our stakeholders. I think the good news today with today's call, we believe that the worst of the tariff and economic disruptions to our business are behind us. We expect our two highest valued businesses, global pet care and global home and garden, to return to growth in fiscal 2026. We're going to continue generating a lot of free cash flow as we go forward. The balance sheet is strong, and we're going to continue returning lots of capital to shareholders through buybacks and dividends as we move this business forward.

We will continue to address the fixed cost structure, the company going forward, particularly corporate overhead and we're going to be aggressive on that as we move through 2006 and complete the S. Four on implementation in Europe.

Faster. Um, just based on where the category stands and to David's point, how our products have recently done in each of the categories that we play in. We also have expansion opportunities, as we referenced in our prepared remarks about expanding into adjacent categories there. So, a lot of opportunity for the global pet care business.

Okay, thanks guys.

Thank you. Thank you.

Thank you.

But again in my opening remarks, I think our supply base, we've worked really hard with our suppliers to remain competitive, particularly given the consumer landscape.

Our next question, coming from the line of Baba, big with CJs Securities here. And is now open.

<unk>.

Good morning. Thanks for taking our questions, and congratulations on solid execution in, uh, obviously a really tough year.

Our retailers.

So it's really those three levers right working really hard with your vendor base.

Um, hey Bob, how you doing, man? We're, we're...

Frankly taken out internal costs and being more efficient with what you have and then taken a little bit of price at retail the greatest price increases came on the durable side on appliances. We were the first to move they are believe it or not.

Doing well. Thank you. Yeah, no, good. As I said, nice job. It's good to chat again.

And I don't think anybody in that space actually knows their numbers I think youre still figuring out the elasticity of demand, particularly in North America market.

David Maura: I'll turn the call back over to Jen, and we'll be very happy to take your questions. Thank you, David. Operator, we can go to the question queue now. Certainly. Ladies and gentlemen, as a reminder, to ask a question at this time, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, simply press star 11 again. Please stand by while we compile the Q&A roster. Now, first question coming from the line of Chris Carey with Wells Fargo Securities. Yolandis, now open. Hi, everyone. Hello. Good morning. Can we just get an updated thought process around the various options for the HPC business, both strategic, but also fundamental as you continue to run the business?

We took our paying early and frankly, I think we're going to capitalize on that going forward, but we got to we got our work cut out I. Appreciate your comments, saying that we executed pretty well.

Um, I wanted to start, I know this is a kind of a category and, and, and product basis question, so maybe we can dig in a little, and question is, you know how much um, is pricing going up at retail, you know, for your categories, products, Etc, in kind of in Aggregate. And, and when do you expect to get clarity on consumer acceptance of that? And, you know, how is that been playing out so far?

Not pleased with the performance, yet, but I'm sure looking forward to getting into 26 and how we do so appreciate the question alternative fossil if I missed anything.

You've covered everything and I think I'll just reiterate.

Reiterating the point that we took our medicine early for our APC business and Thats, where we saw a lot of the impact of price elasticity, which should play in our favor going forward as we see the rest of the market kind of come up because I think everyone will have to mentioned we take price there.

So they're not having to take a lot of internal pain and make some very difficult decisions. To remain competitive at shelf, we had to take down, you know,

Okay, Great and then just for my follow up.

What do you see as the.

Keys for you and maybe you addressed it earlier, I guess with new products, a little bit, but maybe dig into the keys returning to above category growth over the coming years, because I know thats been how you've operated in the past and generally as a goal. So maybe whats it going to take to get back there above category growth in your categories.

Fixed cost salary headcount and and that's not fun to do um you know it but we've done it and um and it's in the path. Um we'll continue to address the fixed cost structure of the company going forward, particularly corporate overhead. And we're going to be aggressive on that. As we move through 26 and complete, the S4 Han implementation in Europe.

David Maura: I realize you've had comments in the press release and the prepared remarks around still looking for strategic alternatives, but can we just dig a bit deeper into the potential outcomes that you're seeing, whether changing and tariff backdrop evolves those potential outcomes, and just any sort of update on how you see the path here? The short answer is no because I'm not going to discuss M&A opportunities on a live public call. A more broad response to your question would be it's pretty obvious when you're dealing with $450 million of tariff headwinds that it will sideline a process with strategic parties for completing a synergistic merger, if you will. We had a very robust process about a year ago at this time that got derailed by trade policy out of the United States. We pivoted to run the business to maximize cash.

No. It's a great question look we still have to do better job on the commercial side and that's what we're trying to do here and Thats quite frankly the tour in the early innings of a thinking Pat and hopefully that story can evolve to the narrative that I think it can be which is look we have phenomenal products, we need to do a better job and it's.

In process right now, it's what I'm most excited about about letting the consumer know that in the most effective way. We can do that is by making claims that resonate with the consumer and get or get better packaging and communicate that onshore and shelf was always could be our better best market and we've got to continue to drive digital we got to continue to drive social media.

And that's Omnichannel and we are seeing early success there, it's still early innings, but.

Um, but, you know, again, you know, in my opening remarks, I thanked our supply base, you know, we've worked really hard with our suppliers to remain competitive, uh, particularly given the consumer landscape, um, and, um, and our retailers. Uh, and so it's really those 3 lovers right working really hard with your vendor base. Um, frankly taking out internal costs and being more efficient with what you have and then taking a little bit of price at retail. The greatest price increases came on the durable side and appliances. Uh, we were the first to move there, believe it or not. Um, and you know, I don't think anybody in that space actually knows their numbers. I, I, I think you're still figuring out elasticity of demand, particularly the North American Market. Uh, I think we took our pain early and uh, frankly, I think we're going to capitalize on that though, going forward, but we got a, we got our work cut out. I appreciate your comments seeing that we executed pretty well. Uh I'm not pleased with the performance yet but I'm sure you're looking forward to getting into 26 and and and seeing how we do. So appreciate the the question. I'll turn it to Fossil if I missed it.

Bob.

Away from operational excellence supply chain management, working capital management fill rates, while the rest of them. We've taken three years getting right. We have still not gotten to be the level that I want to be at.

David Maura: We're taking the fixed expense base of that business down to basically deal with the realities of the current economic situation. We've materially diversified the supply chain there, made it more resilient, and less reliant on China. We're going to improve the profitability of appliances in fiscal 2026 as we move the company forward. We're telling you that as the trade situation becomes less volatile moving forward and macroeconomic headwinds subside, we are excited to resume strategic discussions around finding a strategic solution for the business, which we believe there are many. Frankly, this industry is littered with small competitors that are subscale and barely profitable, and most of them over-levered, and some of them will go bankrupt. We intend to capitalize on that because we're the strongest player in the space. Helpful. Thank you.

From a commercial standpoint.

It's innovation it's advertising.

I think you covered everything. And I think I'll just reiterate the point that we took our medicine early for our HPC business, and that's where we saw a lot of the impact of price elasticity, which should play in our favor going forward as we see the rest of the market kind of come up, because I think everyone will have to eventually take price there.

Retiring in marketing and it's really getting efficient returns on that spend we over the last couple of years, we've allocated a lot more resource to R&D marketing advertising. This year. The teams are challenged to figure out.

Okay, great. And I just, you know, for my follow-up.

Look at all of those line items, guys and get more on the spend youre, making and figure out where the deadwood is and get rid of it.

You got to do more with less in this market. So we're going to be more efficient with it we're going to get more out of it but it is exciting opportunity for us we're not there yet.

Um, you know, what do you see as the, you know, keys for you and maybe you're interested earlier, I guess with new products a little bit, but maybe dig into, um, the keys to returning to above category growth over the coming years because I know, that's, you know, been how you've operated in the past and and generally as a goal. So maybe, you know, what's it going to take to get back there. Uh, above category growth and your categories.

Got it Super Alright. Thanks.

Thank you.

David Maura: Just on follow-up on the pet category, you've worked through a period of intense competitive activity, including from some large private label competitors. Where are we in the journey of the pet business? I think you've sounded a bit more confident about shelf placement, some stabilization, and go forward potential and return to growth. Can you just maybe help us understand the journey and how you see the next 12 months? Thanks. Yeah. Really happy. Thank you for that question. I'll turn it over to Faisal when I'm done for any additional remarks. Look, we are thrilled because we've infused that business with some new talent. It's got some new direction. It's got a higher level of energy to it. The team is embracing a more data-driven consumer insight. I would tell you geographic, category-specific analysis of that business.

Our next question coming from the line of Ian Zaffino with Oppenheimer. Your line is now open.

No, it's a great question. Look, we still have to do better job on the commercial side and you know, that's what we're trying to do here, and that's quite frankly. That's what we're in the early Innings of I think in Pat and hopefully, that story can evolve to the narrative that, I think it can be, which is look, we have phenomenal products.

Alright, great. Thank you very much.

Just wanted to ask you on the tower side, and how youre thinking about it.

We move back to a no tariff for a kind of a preliminary information day tariff scenario.

Eric can you come back to price can you keep anything.

How do we think about that as far as I know you've taken a ton of different actions.

We need to do a better job and it's in process right now. It's what I'm most excited about about letting the consumer know that and the most effective way we can do that is by making claims that resonate with the consumer and get her bet, get better packaging and communicate that on on shelf is always going to be our best marketing and we've got to continue to drive digital. We got to continue to drive social media um and that's that's Omni Channel and

So high level color on.

How it would play out.

Thanks to that overtime.

Hey, Ian I can only deal with the facts in front of me.

Don't mean to be aggressive with the answer but been a super volatile year have dealt with.

16 different tariff rate solid.

Weeks apart.

We've been really aggressive in responding to all of that I have no belief that tariffs will go back to zero at all.

And if they do we'll deal with that.

I really that's how I see it.

David Maura: In terms of your comment on private label, yeah, we saw some competition there. Post-COVID, the entire pet industry has kind of been in a recession. We were able to kind of reset some mods and some shelf space with some major players just a few months ago. We're seeing much better trends now with that done in terms of takeaway, POS, and, frankly, shipments have been improving pretty consistently. That's why you hear a much more bullish outlook for the business looking into 2026. More importantly, there were branded ankle biters that entered into this space. Anybody that had access to social media and the Chinese product could kind of come in here and nibble at you.

Okay, and then just as a follow up it looks like the clinics.

Vin.

Relatively well.

And this has really been kind of a category that has just been somewhat tough for you guys, especially on the hardwood side.

Are you noticing any.

You know, we are seeing, uh, early success there. It's still earning Innings, but uh, Bob that's, you know, away from operational excellence Supply Chain management working Capital Management, fill rates, all the rest of that we've taken 3 years, getting right? We have still not gotten to the the level that I want to be at uh from a commercial standpoint and it's it's Innovation. It's it's advertising and marketing and it's really getting efficient Returns on that spend. We over the last couple of years, we've allocated a lot more resources to R&D marketing advertising. This year, the teams are challenged to figure out a look at all those line items guys and get more on on the spend you're making and figure out where the dead weight is and get rid of it. Because, you know, it's it's you got to do more with less in this market, so uh we're going to be more efficient with it. We're going to get more out of it, but it is exciting opportunity for us. We're not there yet.

Changes in the consumer maybe.

Got it. Super. All right. Thanks.

Driven that is that just coming off of a very low base, maybe any any kind of color you could give there. Thanks.

Thank you.

But we are the world's largest player and texture, we have the best brand.

Our next question, coming from the line of Sophina with Oppenheimer, your line is now open.

<unk> recognized without having to advertise it right you don't need any awareness.

We've got a great product frankly, I'm excited about the new leadership and Pat because I think we have a price pack architecture.

David Maura: We are seeing people go by the wayside, and we are seeing products like Nature's Miracle really take a lot of market share because the product actually works, does what it says, and a lot of competitive products simply do not. I think it's still early innings. We're making incremental progress, but we are launching a lot of new product. We are getting a better response from the retail customer, and consumers seem to be buying our product at a greater rate. Quite frankly, I think this is going to be a fantastic M&A platform. My vision of getting us to $3 billion of revenue and $500 million EBITDA in pet is unchanged from the prior call. In fact, I'm seeing more and more assets come to market at better prices. We have missed on a few of them because we simply refused to overpay.

I think we have a lot of opportunity there we're doing better in Europe than we have in North America kids like to live on these iphones all day long they don't like taking care fish tanks. The hobbyist community has been the installed base, we need to do a better job communicating the kids actually lower quarter Im taking care of fish teaches responsibility and it's actually very therapeutic thing to do with the <unk>.

Hi Greg. Thank you very much. Um, you know, just want to ask you on on the tower side and and how you're thinking about it, if um you know we move back to a a know Tara for a kind of a pre-liberation day. Tariff scenario. You know, is there to get back to the price, can you keep anything? Um, you know, how do we take about that? Is because I know you've taken,

A ton of different actions. Um, and so on a little color on, um, you know, how it would play out if, uh, things do get overturned. Thanks.

<unk> and its an enjoyable thing to have in your household or he's got a big task in front of him he is addressing it.

But we are the leaders and we are responsible for changing the narrative in that space and driving growth no matter what the external environment is we're doing a decent job in Europe, we've got to get a better job going here in North America, I hope to achieve that during fiscal 'twenty six.

The only deal with the facts in front of me. Um you know don't mean to be aggressive with the answer but been a super volatile year. I've dealt with

You know, 16 different tariff rates, all that, you know.

Alright, Thank you very much.

David Maura: We will find highly synergistic businesses that complement this platform from both a cost synergy and revenue synergy standpoint. I'm really looking forward to that opportunity to capitalize on it. Appreciate the question. Faisal, did I miss anything? No, I think you've covered it. The only thing I'll add is just if you look at our performance through the year, you kind of see the signs of stabilization and how our Q4 certainly seemed to be heading in the right direction for the global pet care business. We do feel that's the one business that returns to growth faster just based on where the category stands. To David's point, how our products have recently done in each of the categories that we play in, we also have expansion opportunities like we referenced in our prepared remarks about expanding into adjacent categories there.

Thank you Sir.

Thank you.

I have no belief that tariffs will go back to zero at all. Um and you know if they do I'll deal with it then um I really that's how I see it.

And our last question is coming from the line of Steve powers with Deutsche Bank. Your line is now open.

Great. Thank you David good morning.

A couple a couple of quick couple cleanups last quarter I think you exited with about 2000 25 million annualized and tariff headwinds related to the EU and south Eastern Asian markets that you haven't mitigated the time, just maybe an update on any steps.

Okay. And then um you know, just me as a follow-up looks like Aquatics um you know held in you know relatively well um and this has really been kind of a category that's just been, you know, some tough for you guys especially on the hard, good side. Um you know are are you noticing any

You've taken to address those costs and whether you feel like you have addressed them going into 'twenty six.

Changes in the consumer, or maybe is has anything D driven? That is that just coming off of a very low base? Maybe any any kind of color? You could give their thanks.

Maybe start there.

No I mean, I think we have eliminated most of them I think there's two different numbers that we're giving around we're giving you. The gross exposure was $4 50.

And that was at $1 45 out of China, plus all the other countries right and then we're giving you an updated one because the China rates lower and so apples to apples up like 70 to 80, but we're telling you we've mitigated the vast majority of it and then we're also telling you that.

David Maura: A lot of opportunity for the global pet care business. Okay. Thanks, guys. Thank you. Thank you. Thank you. Our next question coming from the line of Bob LeBig with CJS Securities. Yolandis, now open. Good morning. Thanks for taking our questions, and congratulations on solid execution in an obviously really tough year. Hey, Bob. How are you doing, man? We're doing well. Thank you. Yeah, no. As I said, nice job. It's good to chat again. I wanted to start. I know this is kind of a category and product basis question. Maybe we can dig in a little. The question is, how much is pricing going up at retail for your categories, products, etc., kind of in aggregate? When do you expect to get clarity on consumer acceptance of that, and how has that been playing out so far? Yeah, great question.

Look.

Things move around so much I used to have 120 million bucks of exposure to China, just on pet I think I've. Just told you on this call that my gross exposure on it.

Global purchases for my two most high value businesses, which is good.

Global Pat in my home and Garden business are somewhere between 15% to $20 million by the end of 2006, I mean, we've really work this thing down to nothing.

It's recognized without having to advertise it, right? You don't need any awareness. Um, we've got a great product, frankly, I'm excited about the new leadership and Pat, because I think we have a price pack architecture issue, and I think we have a lot of opportunity there. We're doing better in Europe than we have in North America. The kids like to live on these iPhones all day long. You know, they don't like taking care of fish tanks. The hobbyist community has been the install base. We need to do a better job communicating. The kids actually love aquariums; taking care of fish teaches responsibility, and it's actually a very therapeutic thing to do as a family. It's an enjoyable thing to have in your household. Or he's got a big task in front of him; he's addressing it. Um, but we are the leaders and we are responsible for changing the narrative in that space and driving growth. No matter what the external environment is, we're doing a decent job in Europe.

We will continue to fluctuate around whether it's Cambodia Nahm U S, where we can do it but.

Get a better job going here in North America. I hope to achieve that during fiscal 26.

That's where it economically makes sense for us today first of all if I Miss the messaging App. Please.

All right. Thank you very much.

Thank you.

Youre exactly right and we have for the most part we've taken most of the actions, including pricing actions everywhere. There is a little bit more to do getting into next year, but we'll do that with a combination of again cost reductions.

Now, last question is coming from the line of Steve Powers with Deutsche Bank. Your line is now open.

Great. Thank you, David C. Good morning. Um,

David Maura: Look, I'm kind of stunned at how little pricing we actually had to take. I thought February, March, when I was hardly sleeping, staring at $450 million challenges, that we'd have to take a lot more pricing than we actually did. That resulted in us having to take a lot of internal pain and make some very difficult decisions to remain competitive at shelf. We had to take down fixed cost salary headcount. That's not fun to do, but we've done it, and it's in the past. We'll continue to address the fixed cost structure of the company going forward, particularly corporate overhead. We're going to be aggressive on that as we move through 2026 and complete the S/4HANA implementation in Europe. Again, in my opening remarks, I thanked our supply base.

Supply base changes supplier concessions as well as pricing.

But the majority of the perfect vast majority of that is behind.

Perfect. Thank you.

Two other <unk>.

I could just one is just your early.

Your category growth expectations in 2006 relative to your your call your own call for low single digit topline growth.

Couple, couple, couple cleanups. Um, last quarter, I think you exited with about $20 million to $25 million annualized and tariff headwinds that, you know, really it's the EU and Southeast Asian markets that you hadn't mitigated at the time. Just maybe an update on any steps, you know, you've taken to address those costs and whether, you know, you feel like you have addressed them going into the 26th. Uh, you know, maybe start there.

How you think like end market demand compares to your top line expectations and then separately.

Do you think about rolling out us for Hanmi.

You've mentioned moving that into HTC, David just any implications there on your ability to.

To pursue strategic solutions there while that's in flight.

Does that delay.

Cause any impediment to moving strategically is that business is that project is underway and then are you able to implement it in such a way that it's sort of modular enough to.

David Maura: We've worked really hard with our suppliers to remain competitive, particularly given the consumer landscape and our retailers. It's really those three levers, right? Working really hard with your vendor base, frankly, taking out internal costs and being more efficient with what you have, and then taking a little bit of price at retail. The greatest price increases came on the durable side in appliances. We were the first to move there, believe it or not. I don't think anybody in that space actually knows their numbers. I think you're still figuring out elasticity of demand, particularly in the North America market. I think we took our pain early, and frankly, I think we're going to capitalize on that now going forward. We got our work cut out. I appreciate your comments saying that we executed pretty well.

Carve out if the separation is the ultimate <unk>.

I mean, I think we've eliminated most of them and I think there's 2 different numbers that we're giving you. Right. We're giving you the gross exposure was 450. You know if you know that was at 1 145 out of China plus all the other countries, right? And then we're giving you an updated 1 because China rates lower and so Apples to Apples. That's like 70 to 80 but we're telling you, we've mitigated the vast majority of it and then we're also telling you that, you know, look, you know, things move around so much, man. I used to have 120 million bucks of exposure, out of China, just on pet. I think, I just told you on this call that my growth exposure on it, Global purchases for my 2, most high value businesses, which is

<unk>. Thanks.

No. That's a great question I appreciate you answering I will take the second one vessel will touch on the first one.

Look the whole goal of US we're on is to get to a single source of truth and quit using 10 different systems all over the place and run the company more efficiently and then liquidate for frankly corporate costs right.

All movements be more efficient period end of story.

We're basically done with that in North America, we still have to get the synergies for.

Europe, we're rolling that out.

HBC is on a bunch of different platforms and it's been a series of acquisitions over 20 years.

David Maura: I'm not pleased with the performance yet, but I'm sure looking forward to getting into 2026 and seeing how we do. I appreciate the question. I'll turn it to Faisal if I missed anything. No, I think you covered everything. I think I'll just reiterate the point that we took our medicine early for our HPC business, and that's where we saw a lot of the impact of price elasticity, which should play in our favor going forward as we see the rest of the market kind of come up, because I think everyone will have to eventually take price there. Okay, great. For my follow-up, what do you see as the keys for you?

Global Pet. And, and my Omen Garden business or somewhere between 15 to 20 million by the end of 26. I mean, we've really worked this thing down to, to, to nothing. And, you know, we, we'll continue to flex it around whether it's Cambodia Nom us wherever we can do it. But, um, that's where economically makes sense for us today Festival. If I missed the messaging up, please quick up, clean up. What I said, you're you're exactly right. And we have for the most part we've taken most of the actions including pricing actions everywhere. There's a little bit more to do getting into next year but we'll do that with the combination of again cost reductions um Supply based changes Supply concessions as well as pricing.

Putting that on a single source of gas for Hana is actually going to create a lot of efficiencies and create a platform there that enhances the business. It will in no way slowdown anything that we have on the table now or in the future for a strategic solution, we will pursue that and if we find some great we're going to execute it and you'll hear about it then.

But majority of the vast majority of the time.

But in the interim and actually will make that business more valuable to any potential partner in the future because it will have a more flexible dynamic operating infrastructure that can actually be more plug and play which is quite frankly, what the industry needs to go there are way too many subscale players sending selling products from the same.

David Maura: Maybe you addressed it earlier, I guess, with new products a little bit, but maybe dig into the keys to returning to above category growth over the coming years because I know that's been how you've operated in the past, and generally is a goal. Maybe what's it going to take to get back there, above category growth in your categories? No, it's a great question. Look, we still have to do a better job on the commercial side. That's what we're trying to do here. Frankly, that's what we're in the early innings of, I think, in pet. Hopefully, that story can evolve to the narrative that I think it can be, which is, look, we have phenomenal products. We need to do a better job, and it's in process right now. It's what I'm most excited about, about letting the consumer know that.

Hi, Jane do way too few retailers.

That space makes no sense in its current configuration.

And again I think thats for Hana will be not only a great enhancement to the operating income and efficiency of the company that was built as an excuse in existence today, but will actually enhance it as an M&A partner for future combinations. That's my opinion vessel.

Perfect. Thank you and 2 2 other. Um if I could just 1 is just your absolutely what you got. Your your category growth expectations in 26 relative to your your call your own call for a low single to the Top Line growth. Just you know, how how you think like and market demand compares to your your Topline expectations and then separately, you know, as you think about rolling out, S4 Hana, I think you mentioned, moving that into HPC David, just any implications there on on your ability, um, to per pursue strategic Solutions there, while that's in Flight, you know, just, you know, um, does that delay, you know, or cause any impediment to to moving, strategically, as, as that business, as that is Project is underway and then are you able to implement it in such a way, that it's sort of modular enough?

To to potentially carve out if a separation is the ultimate solution. Thanks.

I'll just maybe address the category question, So I think home and garden category.

It remains strong, but it's weather dependent like we said, we expect a more normalized weather year next year and that automatically gives you growth over this year.

The global pet care categories.

David Maura: The most effective way we can do that is by making claims that resonate with the consumer, get better packaging, and communicate that on shelf. On shelf is always going to be our best market. We've got to continue to drive digital, we've got to continue to drive social media, and that's omnichannel. We are seeing early success there. It's still early innings. Bob, that's away from operational excellence, supply chain management, working capital management, fill rates, all the rest of that, which we've taken three years getting right. We have still not gotten to the level that I want to be at from a commercial standpoint. It's innovation, it's advertising and marketing, and it's really getting efficient returns on that spend. Over the last couple of years, we've allocated a lot more resource to R&D, marketing, and advertising.

<unk> I think we're seeing signs of bottoming out and it's kind of flattening and turning around.

Same with our companion animal area I think we're starting to see the category stabilized. Our growth is also dependent on just expansion in our own portfolio, including in adjacent categories, but as well as just gaining market share, where we're actually seeing our products perform and our brands performed better in the marketplace.

Home and personal care is the one category that remains under pressure it will be for both Europe and North America going into next year, we have to see what the market does from a pricing perspective, I think our competitors will come into market with the price and in the next few months, we should see all of that play out so that shift in the second half of the year play out to our advantage, but in the short term that category.

At North America, we still have to get the synergies for it. Uh, Europe are rolling that out, you know, HPC is on a bunch of different platforms. You know it's been a series of Acquisitions over 20 years um you know putting that on a single source of of S4 Hana is actually going to create a lot of efficiencies and create a platform there. That enhances the business it will, in no way slow down anything that we have.

<unk> remains very challenging for us.

Okay perfect. Thanks for all that I appreciate it.

David Maura: This year, the teams are challenged to figure out, look at all those line items, guys, and get more on the spend you're making and figure out where the dead weight is and get rid of it because you got to do more with less in this market. We're going to be more efficient with it. We're going to get more out of it, but it is an exciting opportunity for us. We're not there yet. Got it. Super. All right. Thanks. Thank you. Our next question coming from the line of Ian Sofino with Oppenheimer. Yolandis, now open. Hi, great. Thank you very much. Just wanted to ask you on the tariff side and how you're thinking about it if we move back to a no tariff or kind of a pre-liberation day tariff scenario. Is there a chance to get back to price? Can you keep anything?

Thank you.

Okay.

Thank you and that's all the time, we have our Q&A session I will now turn the call back over to John for any closing remarks.

Thank you with that we have reached the top of the hour. So we will conclude our conference call. Thank you to David and vessel and on behalf of spectrum brands. Thank you for your participation. This morning.

Uh on the table now or in the future for strategic solution. Uh we will pursue that and if we find something great, we're going to execute it and you'll hear about it then. Um, but in the interim it actually will make that business more valuable uh to any potential partner in the future because it will have a more flexible Dynamic operating uh infrastructure. Uh that can actually be more Plug and Play which is you know quite frankly with the industry needs to go. There are way too many sub-scale players sending selling products from the same supply chain. They're way too few retailers, uh, that space makes no sense and its current configuration. Um, and again I think s4hana will be, uh, not only a great enhancement to the operating income and efficiency of the company. That was, that is an excuse in existence today, but we'll actually enhance it as an m&a partner for, for future. Uh, combinations.

That's my opinion, vessel.

Thank you good day.

This concludes today's conference call. Thank you for your participation you may now disconnect.

David Maura: How do we think about that? I know you've taken a ton of different actions, and I want a little color on how it would play out if things do get overturned. Thanks. Hey, Ian, I can only deal with the facts in front of me. I don't mean to be aggressive with the answer, but it's been a super volatile year. I've dealt with 16 different tariff rates, all at weeks apart. We've been really aggressive in responding to all that. I have no belief that tariffs will go back to zero at all, and if they do, I'll deal with it then. That's how I see it. Okay, just maybe as a follow-up, it looks like Aquatics held in relatively well. This has really been kind of a category that's just been somewhat tough for you guys, especially on the hard good side.

I'll just maybe address the category questions, so I think Home and Garden category, um, remains strong, but it's weather dependent. Like we said, we expect a more normalized weather year next year and that automatically gives you growth over this year on the Global Pet Care categories. Um, Aquatics. I think we're we're seeing signs of bottoming out, and it's kind of flattening and turning around. Um, same with our Companion Animal area. I think we're, we're starting to see the category stabilized. Our growth was also dependent on just expansion in our own portfolio, including in the adjacent categories, but as well as just gaining market share. We're, we're actually seeing our products perform and Our Brands perform better in the marketplace.

Home and personal care is the 1 categories. Under Pressure, it will be for both Europe and North America going into next year. We have to see what the market does from a pricing perspective. I think our competitors will come in the market with the price and in the next few months, we should see all that play out. So that should in the second half of the Year, play out to our advantage but in the short run that category remains very challenging for us.

Perfect. Thanks for all that. Appreciate it.

Thank you.

Thank you. And that's all the time we have for Q&A session. I will now turn the call back over to Jen for any closing remarks.

David Maura: Are you noticing any changes in the consumer, or maybe has anything driven that? Is that just coming off of a very low base? Maybe any kind of color you could give there. Thanks. We're the world's largest player in Tetra. We have the best brand. It's recognized without having to advertise it, right? You don't need any awareness. We've got a great product. Frankly, I'm excited about the new leadership in pet because I think we have a price pack architecture issue, and I think we have a lot of opportunity there. We're doing better in Europe than we have in North America. Kids like to live on these iPhones all day long. They don't like taking care of fish tanks. The hobbyist community has been the install base. We need to do a better job communicating that kids actually love aquariums.

Thank you, uh, with that, we have reached the top of the hour. So, we will conclude our conference call. Thank you to David and vessel. And on behalf of Spectrum Brands. Thank you for your participation this morning.

Thank you. Have a good day.

Conference call. Thank you for participation. You may now disconnect

David Maura: Taking care of fish teaches responsibility, and it's actually a very therapeutic thing to do with the family, and it's an enjoyable thing to have in your household. Ori's got a big task in front of him. He's addressing it. We are the leaders, and we are responsible for changing the narrative in that space and driving growth no matter what the external environment is. We're doing a decent job in Europe. We got to get a better job going here in North America. I hope to achieve that during fiscal 2026. All right. Thank you very much. Thank you, sir. Thank you. Now, last question coming from the line of Steve Powers with Deutsche Bank. Yolandis, now open. Great. Thank you, David. Faisal, good morning. A couple of cleanups.

David Maura: Last quarter, I think you exited with about $20 to 25 million annualized in tariff headwinds that related to the EU and Southeastern Asian markets that you hadn't mitigated at the time. Just maybe an update on any steps you've taken to address those costs and whether you feel like you have addressed them going into 2026. Maybe start there. I mean, I think we've eliminated most of them. I think there's two different numbers that we're giving you, right? We're giving you the gross exposure was $450 million. That was at $145 million out of China plus all the other countries, right? Then we're giving you an updated one because China rates lower. Apples to apples, that's like $70 to 80 million. We're telling you we've mitigated the vast majority of it. We're also telling you that, look, things move around so much.

David Maura: I used to have $120 million of exposure out of China just on pet. I think I just told you on this call that my gross exposure on global purchases for my two most high-value businesses, which is global pet and my home and garden business, are somewhere between $15 to 20 million by the end of 2026. I mean, we've really worked this thing down to nothing. We'll continue to flex it around, whether it's Cambodia, Vietnam, US, wherever we can do it. That's where it economically makes sense for us today. Faisal, if I messed the messaging up, please clean up what I said. You're exactly right, and for the most part, we've taken most of the actions, including pricing actions everywhere.

David Maura: There's a little bit more to do getting into next year, but we'll do that with a combination of, again, cost reductions, supply-based changes, supplier concessions, as well as pricing. The vast majority of it is behind. Perfect. Thank you. Two other, if I could. One is just your, absolutely, what you got, your category growth expectations in 2026 relative to your own call for low single-digit top-line growth, just how you think end-market demand compares to your top-line expectations. Then separately, as you think about rolling out S/4HANA, I think you mentioned moving that into HPC, David. Just any implications there on your ability to pursue strategic solutions there while that's in flight? Just does that delay or cause any impediment to moving strategically as that project is underway?

David Maura: Are you able to implement it in such a way that it's sort of modular enough to potentially carve out if a separation is the ultimate solution? Thanks. No, that's a great question. Appreciate you answering. I'll take the second one. Faisal will touch on the first one. Look, the whole goal of S/4HANA is to get to a single source of truth and quit using 10 different systems all over the place, run the company more efficiently, and then liquidate, frankly, corporate costs, right? AI, the whole movement is to be more efficient, period, end of story. We're basically done with that in North America. We still have to get the synergies for it. Europe, we're rolling that out. Home and Personal Care is on a bunch of different platforms. It's been a series of acquisitions over 20 years.

David Maura: Putting that on a single source of S/4HANA is actually going to create a lot of efficiencies and create a platform there that enhances the business. It will in no way slow down anything that we have on the table now or in the future for a strategic solution. We will pursue that. If we find something great, we're going to execute it, and you'll hear about it then. In the interim, it actually will make that business more valuable to any potential partner in the future because it will have a more flexible, dynamic operating infrastructure that can actually be more plug-and-play, which is, quite frankly, where the industry needs to go. There are way too many subscale players selling product from the same supply chain to way too few retailers. That space makes no sense in its current configuration.

David Maura: I think S/4HANA will be not only a great enhancement to the operating income and efficiency of the company that is in existence today, but will actually enhance it as an M&A partner for future combinations. That's my opinion. Faisal, I'll just maybe address the category question. I think home and garden category remains strong, but it's weather-dependent. Like we said, we expect a more normalized weather year next year, and that automatically gives you growth over this year. On the global pet care categories, Aquatics, I think we're seeing signs of bottoming out, and it's kind of flattening and turning around. Same with our companion animal area. I think we're starting to see the category stabilize. Our growth is also dependent on just expansion in our own portfolio, including in the adjacent categories, as well as just gaining market share.

David Maura: We're actually seeing our products perform and our brands perform better in the marketplace. Home and personal care is the one category that remains under pressure. It will be for both Europe and North America going into next year. We have to see what the market does from a pricing perspective. I think our competitors will come in the market with the price, and in the next few months, we should see all that play out. That should, in the second half of the year, play out to our advantage. In the short term, that category remains very challenging for us. Okay. Perfect. Thanks for all that. Appreciate it. Thank you. Thank you. That's all the time we have for our Q&A session. I will now turn the call back over to Jen for any closing remarks. Thank you.

David Maura: With that, we have reached the top of the hour, so we will conclude our conference call. Thank you to David and Faisal. On behalf of Spectrum Brands, thank you for your participation this morning. Thank you. Have a wonderful good day. This concludes today's conference call. Thank you for participation. You may now disconnect.