Thanks, everyone. Jim, and hello,
so spring the with ended seeing engagement first pleased the the we are where early We with as of half far. we are year, as well consumer very
announced, end to the runrate of x, Springboard is of came max X.X the and savings the already x by net the in over of $XXX in fiscal at on track year. at covenant X end quarter we've As million leverage versus deliver the
are garden. provide In we're been the engaged responding as engagement most are expected, were Consumers lawn to favorable, strong promotions and and and weather value. the regions seeing clearly that in participating consumers has
remains Turning restructuring to volatile reflects the of more improve profitability. to Hawthorne industry state our Hawthorne, our actions cannabis the heightened and quickly at recent
through second with the X% billion, sales year Starting walk Consumer let's of in shy Now US for more net record. $X.XX the quarter prior detail. just our sales quarter business,
$X.XX above were sales billion. half year totaled and nearly First last
job first efforts deliver half partners in challenging environment. the our in retail these to reflection and a outstanding Our are executing SMG load results done with an has plan of team and their a for
which volumes. year. the Pricing prior impact the offset to that of lower levels, down nearly We of XX% our are retail shipment inventory reduced shipping related the units year-to-date for in X% than expectation lower volumes call more are versus
that soft the noted as California. impacted earlier, As season patterns result the of a started extreme weather
To POS strong However, significant and fertilizers April. our to seeing encouraged are our are brands. Consumers growing loyal by from remaining we not we have date, media price-sensitive to while strong a campaigns, promotions trade-down branded through are seeking value, and POS the lists we media. we've especially seen and trusted seen private-label also high-quality in
run To limited investments back and with through to our we support media the fall. promotional profitable This contrasts these year continue of the year, and volume, last driving the trends half this when made plans will season. in
units essentially largest up As and flat are are of digits mid-single POS today, dollars at retailers. our
full is now mix through this Product currently favoring we growing the trend expect media. And continue year. to
is mid-to Within the lawns overall category, volume high-single-digits through down April.
lower margin as private-label besides categories key were media Bonus flat Triple higher and positive currently outperforming we to our units Scott's continue However, units versus S Action, towards at and and branded fertilizers, margin, In lawns retailers and year. trend growing fertilizers. prior such
access to remains At challenged, and Hawthorne, an environment. costly regulatory uncertain limited top-line market the capital amid continued oversupply in
$XXX million, the and $XX consumable for the periods last and than environment million year. at large lighting continue change and same climb first investments down North durable were to growing XX% respectively the versus greater sales replenishment. America a drove rate XX% quarter segment half as Second and
expect converts half to and Lighting quarter season still in growing prospects net and Pro environment the the improvement the year quarter down XX% the when sales in of the our Hawthorne business growing year, outdoor net first America total and year-over-year. of We versus in orders. were the durable’s North Together sales were XX% Lighting with up combined, XX% hardware, prior strong XX% quarter. half the in Hort total back picks in
this the rates may to overall from of improve the half year conditions, persist. daily market the yet However, first sales have given and weak
focus of on to is the Our runrate the and by profitability intact. year end objective returning this remains
are brand will Approximately of to from to mix and our half category favorably that and Springboard recovers. rates margin overall when savings gross Hawthorne the volume spoke changes impact Jim
with volume higher gross However, pricing even costs a warehousing the decline, actions margin year-to-date in freight though saw outpaced to paired drive Hawthorne half, in the first the lower. decrease rate substantial material, has segment's and cost
total action As to fans distribution New through Hawthorne release, helps in its warehouse and Washington, million before are margin. restructuring, $XXX excluded posted noted closures this California, of to which sold GAAP taxes, income non-GAAP Jersey. These charges million Related Hawthorne gross cost an of quarter. in accelerate the income $XXX business, Oregon that branded impacted Hurricane for press savings charges from the
both year-to-date margin pricing we the for If and a the the than material resulting in costs. and look nearly quarter more rate points basis margin points Through covering of margin, closer at added rates XXX of take of trade cost the the XX.X% adjusted XX to and gross gross gross to half, company, first respectively. total half, first XX% goods basis declined higher net
to fixed driven Hawthorne we leverage, a US production largely now not percent to line cover However, volume at of increase cost conversion Consumer of declines and costs the our full-year also costs. With locked, lower reasonable was the enough steep sight have our COGS XX% greater our by to than fully in higher and business. volumes
Other than for most raw of our lower materials. resins, major we're seeing prices
remaining our hedging improvements recognize cost half we second and given high However, starting inventory, expect in of program to the these XXXX.
will on balance year, the slightly pressured, Investments. of based a revised expectations at and margins Looking trade additional the mix be
basis total changes we still pricing and of mostly mix by net moderating be and will gains, the continued The fiscal Overall offset expect points. for XXX decline to rate material gross margin strong cost costs. company productivity the XXXX, nearly
opportunity recovery, moderation, and through ‘XX restructuring to warehouse improve initiatives. other Looking cost-out our mix cost see volume to and our ample gross and fiscal commodity margins beyond, we and
the year. for We our on media line the progress show SGA continue sacrificing plans aggressive to without
up year-over-year. working fact, to media In expected spend XX% be to is
in our XX.X% year, significant last half Springboard. Project SG&A percentage As XX% year of progress this of the from reflecting first from is sales, a down to
expect these maintain XX% full and We net the yielding sales year. of XX% forward SG&A savings to for between moving
Now I'll guidance. a few highlight our adjustments to more expected
adjust fiscal While great full year year, decline about we on work our year rates, guidance headwinds and percentage our low-single-digits on operating full and prospects to the whole, our far the at year gross to the us and this EBITDA lead the to near term remain from guidance margin full percentage a enthusiastic control adjusted mid-single-digit on income pressure so XXXX. Hawthorne, cost decline
team Mike’s the revised This comfortably net keeps EBITDA to remainder x. leverage below X target meet of the and diligently the within Jim covenant guidance us be our And working year. for will
the up on balance few with the finish expense, review comments I'll interest sheet. a taxes, and
the Our the one-time adjusted through through last from executive of of rate tax the was long-term second XX.X% second largely versus benefit XXXX in quarter quarter driven by exercise XX.X%, year, and vesting fiscal compensation. certain a
expect in up expense Quarterly higher for combination at a XX% percentage is year the the rates is of increase by borrowing for year. tax a from year higher we points XX% the notes as swap end expected arrangements, our $XX The the million full nearly our an debt the year at was of of unchanged up due fixed-rate expense is rate to of to rates rate $XX mostly XX% ago, Through fall full XX% sulfur. of senior of quarter. versus average mainly driven long-term interest or to two underlying Additionally, prior of X.X%, interest borrowing interest and fixed million. and range increase
through back balance pulled inventory. inventory improving balances. making our are we strong volumes higher the sheet, production We headway on cost selling and on Continuing we're
of end than lower quarter, the the inventory year. same last was time $XXX of As million the
and in areas capital expected inventory free payable the deliver in cash the to million drive will accounts other closer flow, on working with years. targeted free ‘XX cash ‘XX. of While in significant offsets net fiscal in improving $XXX fiscal $XXX year, million favorability are cash our flow deliver operating is of to two approximately total each flow change in position $X billion track we to Together with each in over
approach. quarter, stated capital tightly last maintain I a will As disciplined allocation we
down balance cash free quarterly our debt. funding, be pay and our are dividend of used the to flow We will
early. me Let remains it Within of with up the POS wrap XX% is this. financial still expected overview our
progressing much will mid-June and at update more We will that season to by time. our how on as is we an provide know the progress
and long-term core One extremely our final build Hawthorne into Jim value note non-cash the contribute to creation SMG’s planning plans on our already diving I’m business. to team for to with that team refreshing and and longer and opportunities to work deeply and for stakeholders. excited Lawn The range Garden the is protect Jim meaningfully reconstitute strategy mentioned
back now turn And I’ll over it to Jim.
