Scotts Miracle-Gro Co (SMG) 2024 Q4 法說會逐字稿

Good morning. Welcome to Scotts Miracle-Gro's Fiscal '24 year-end earnings Webcast. I'm Amy DeLuca, Head of Investor Relations. Speaking today are Chairman, President and CEO, Jim Hagedorn; and Chief Financial and Administrative Officer, Matt Garth. Jim will provide an overall business update, followed by Matt with a review of our financial results.

早安.歡迎收看 Scotts Miracle-Gro 的 24 年財年終收益網路廣播。我是投資者關係主管艾米·德盧卡。今天發言的是董事長、總裁兼執行長吉姆‧哈格多恩 (Jim Hgedorn)；財務與行政官馬特‧加斯 (Matt Garth)。吉姆將提供整體業務最新情況，隨後馬特將回顧我們的財務表現。

During our review, we will make forward-looking statements and discuss certain non-GAAP financial measures. Please be aware that our actual results could differ materially from what we share today. Please refer to our SEC filings for details of the risk factors that could impact our results.

在我們的審查過程中，我們將做出前瞻性陳述並討論某些非公認會計準則財務指標。請注意，我們的實際結果可能與我們今天分享的結果有重大差異。請參閱我們向 SEC 提交的文件，以了解可能影響我們業績的風險因素的詳細資訊。

Following the webcast, Chief Operating Officer, Nate Baxter; and Hawthorne Division President, Chris Hagedorn will join Jim and Matt for an audio-only Q&A session.

網路廣播結束後，營運長 Nate Baxter 表示：霍桑分部總裁 Chris Hgedorn 將與 Jim 和 Matt 一起參加純音頻問答環節。

To listen to the Q&A, simply remain on this webcast. To participate, please join by the audio link shared in our press release. As always, today's session will be recorded. An archived version will be published on our website at investor.scotts.com. For further discussion after the call, please email or call me directly.

要收聽問答，只需繼續觀看此網路廣播即可。要參與，請透過我們新聞稿中共享的音訊連結加入。像往常一樣，今天的會議將被記錄。檔案版本將發佈在我們的網站 Investor.scotts.com 上。如需在通話後進一步討論，請發送電子郵件或直接致電我。

Now, let's get started with Jim's update.

現在，讓我們開始了解吉姆的最新情況。

Good morning. Before I get into our 2024 performance and guidance for fiscal '25, I want to reflect on our journey and discuss my midterm priorities.

早安.在介紹我們 2024 年的業績和 25 財年的指導之前，我想回顧一下我們的歷程並討論我的中期優先事項。

Doing so will help everyone appreciate the progress we've made and provide context for where we're headed. It was just two years ago we were strapped for cash and saddled with high debt. We were burdened by a cost structure we built up for the pandemic-era demand.

這樣做將幫助每個人欣賞我們所取得的進步，並為我們的前進方向提供背景。就在兩年前，我們現金短缺，負債累累。我們為大流行時代的需求而建立的成本結構給我們帶來了負擔。

But could no longer afford. We were managing an extremely high leverage ratio on a daily basis, and we had to go to our banks several times to navigate it. But we owned our situation.

但已經買不起了。我們每天都管理著極高的槓桿率，我們不得不多次去銀行操作。但我們擁有我們的處境。

Faced with very hard choices, we made decisions in the moment and were determined to right-size our business. We cut over $400 million in operating expenses. We dismantled Hawthorne to make it a much smaller and more profitable business.

面對非常艱難的選擇，我們立即做出了決定，並決心調整我們的業務規模。我們削減了超過 4 億美元的營運費用。我們解散了霍桑，使其規模更小、利潤更高。

And we honored our bank covenants and were accountable on every level. At the same time, we reinvested $100 million to protect what I call our superpowers; our brands, our sales force, supply chain and innovation.

我們遵守銀行契約，並在各個層面上承擔責任。同時，我們再投資1億美元來保護我所說的我們的超級大國；我們的品牌、銷售團隊、供應鏈和創新。

We got through these worst of times upholding our commitment to shareholders. Despite some doubters out there, we maintained the dividend and avoided the issuance of additional shares. This takes us where we are today.

我們堅持對股東的承諾，度過了最糟糕的時期。儘管存在一些質疑，我們還是維持了股息並避免發行額外股票。這將我們帶到了今天的位置。

Fiscal '24 was the pivotal moment in the journey. It's the year which we made the shift from crisis management to running the business with a focus on the future. We're no longer making decisions under duress.

24 財年是這歷程的關鍵時刻。今年我們從危機管理轉向專注於未來的業務運作。我們不再在脅迫下做出決定。

We've made meaningful improvements to the most important financial metrics. And we've created a foundation for the three-year growth plan that we outlined at our July investor event. That plan is grounded in my midterm priorities, which include driving consistent and sustained growth averaging 3% annually, deploying at least $200 million in advertising and marketing spend each year, improving our gross margin rate to the mid-30% range, delivering EBITDA approaching $700 million, and reducing our leverage to approximately 3 times.

我們對最重要的財務指標進行了有意義的改進。我們已經為我們在 7 月份投資者活動中概述的三年成長計劃奠定了基礎。該計劃以我的中期優先事項為基礎，其中包括推動平均每年3% 的持續持續增長、每年至少部署2 億美元的廣告和營銷支出、將我們的毛利率提高到30% 左右的範圍、使EBITDA接近7 億美元，並將我們的槓桿率降低至約 3 倍。

We'll make progress against all these priorities in '25, and I expect to achieve all of them by the end of fiscal '27. Accomplishing these priorities will maximize our ability to get the share price back where it should be and enable us to deliver outsized shareholder returns.

我們將在 25 年在所有這些優先事項上取得進展，我預計在 27 財年末將實現所有這些目標。完成這些優先事項將最大限度地提高我們讓股價回到應有水平的能力，並使我們能夠為股東帶來豐厚的回報。

My overarching goal is to ensure Scotts Miracle-Gro is a stable and dependable consumer equity in investor portfolios. In my view, our results this past year were a huge down payment on these priorities. We met or exceeded our commitments.

我的首要目標是確保 Scotts Miracle-Gro 成為投資者投資組合中穩定可靠的消費者權益。在我看來，我們去年的成果是對這些優先事項的巨額首付。我們達到或超越了我們的承諾。

In fiscal '24, we achieved adjusted EBITDA growth of 20%, finishing at $539 million, despite a lawn and garden market that was down overall. It was a rocky season with extended periods of unfavorable weather in the Northeast and Midwest. We drove 6% top-line growth in our consumer business and took significant market share, especially in gardens and controls. POS units across our portfolio were up nearly 9%.

在 24 財年，儘管草坪和花園市場總體下滑，但我們的調整後 EBITDA 成長了 20%，最終達到 5.39 億美元。這是一個多岩石的季節，東北部和中西部地區天氣長期不利。我們的消費業務實現了 6% 的營收成長，並佔據了顯著的市場份額，特別是在花園和控制領域。我們投資組合中的 POS 設備成長了近 9%。

We told you we would achieve these growth numbers through increased listings, expanded share of shelf and investments in our superpowers, and we did. We over-delivered on our commitment to drive $1 billion in free cash flow over two years.

我們告訴過您，我們將透過增加上市量、擴大貨架份額以及對我們超級大國的投資來實現這些成長數字，我們做到了。我們超額兌現了兩年內增加 10 億美元自由現金流的承諾。

We said we would reduce inventory below $600 million, and we achieved more than that. This was historic for us. Even some of us thought this couldn't be done, and I give Nate Baxter and Dave Swihart, the Head of our Supply Chain, a tremendous amount of credit.

我們曾說過要將庫存減少到 6 億美元以下，但我們所取得的成就遠不止於此。這對我們來說是歷史性的。甚至我們中的一些人也認為這是不可能完成的，我給予我們供應鏈主管內特·巴克斯特 (Nate Baxter) 和戴夫·斯維哈特 (Dave Swihart) 極大的信任。

We pledged to aggressively pay down debt and get our leverage below 5 times EBITDA. We ended the year at 4.86 times. I commend Matt Garth and his treasury team for their hard work. And we restructured Hawthorne, making a strategic pivot from third party distribution to focus on our most profitable owned brands. Hawthorne finished '24 with consecutive quarters of positive EBITDA for the first time in two years. Chris Hagedorn and Tom Crabtree did a ton of heavy lifting to make this happen.

我們承諾積極償還債務，並將槓桿率控制在 EBITDA 的 5 倍以下。年底我們的倍數為 4.86。我讚揚馬特·加斯和他的財務團隊的辛勤工作。我們重組了 Hawthorne，將策略重點從第三方分銷轉向專注於我們最賺錢的自有品牌。Hawthorne 在 24 年結束時，兩年來首次連續幾季實現正 EBITDA。為了實現這一目標，克里斯·哈格多恩和湯姆·克拉布特里做了很多繁重的工作。

When you look at our overall performance, I couldn't be more proud of the SMG team. We've enhanced our profitability without negatively impacting the things that drive our business. In fact, we put $20 million more into our brands and advertising than last year. And we kept SG&A essentially flat to '23 and 9% below 2022. I mentioned earlier that gross margin improvement was high on my list. We'd lost about 900 basis points of margin since the peak of COVID.

當你看到我們的整體表現時，我為 SMG 團隊感到無比自豪。我們提高了獲利能力，但沒有對推動我們業務發展的因素產生負面影響。事實上，我們在品牌和廣告方面的投入比去年多了 2,000 萬美元。我們將 SG&A 基本上保持在 23 年不變的水平，比 2022 年低 9%。我之前提到，毛利率的改善是我的首要任務。自新冠疫情高峰以來，我們的利潤損失了約 900 個基點。

In fiscal '24 after adjustments, we got back over 300 basis points. And we'll recapture more in '25. I expect by the end of this fiscal year, we'll recover about two-thirds of our margin loss. But that last third is going to be more challenging. You'll recall that I talked last quarter about how we'd work with our retailers to get pricing across the portfolio. This proved to be a tough proposition. And let me explain.

在調整後的 24 財年，我們恢復了超過 300 個基點。我們將在 25 年奪回更多。我預計到本財年結束時，我們將收回約三分之二的利潤損失。但最後三分之一將更具挑戰性。您可能還記得，我在上個季度談到了我們如何與零售商合作以獲得整個產品組合的定價。事實證明這是一個艱難的提議。讓我解釋一下。

Despite the easing of inflation and interest rates, consumer sentiment is below its historic average. There have been endless stories about the state of the consumer. A recent Wall Street Journal headline declared that consumers were still, seething over high prices. You see this playing out in troubles facing some of the biggest consumer brands, from Starbucks to McDonald's.

儘管通膨和利率有所緩解，但消費者信心仍低於歷史平均。關於消費者狀況的故事層出不窮。《華爾街日報》最近的一篇頭條宣稱，消費者仍然對高價感到憤怒。從星巴克到麥當勞，一些最大的消費品牌都面臨著麻煩，你可以看到這種情況的發生。

Given this environment, our retailers are highly sensitive to any price increases and potential impacts those may have on their own margins. Still, we were successful in securing north of 1% through targeted increases on key SKUs. All retail partners are participating, and we do not think this will turn off consumers. While we're pleased with the pricing we did get, it's not enough to close that margin gap. I don't think we can put any more pricing on consumers at this time.

在這種環境下，我們的零售商對任何價格上漲及其可能對其利潤產生的潛在影響高度敏感。儘管如此，我們還是透過對關鍵 SKU 進行有針對性的成長，成功確保了 1% 以上的成長。所有零售合作夥伴都參與其中，我們認為這不會讓消費者失去興趣。雖然我們對我們獲得的定價感到滿意，但這還不足以縮小利潤差距。我認為目前我們不能再對消費者定價。

There are other levers we're pulling to drive margin improvement. These include incremental volume growth and potential M&A. Our M&A pipeline is made up of small to midsize, branded lawn and garden companies that are in adjacent categories and would be easy to integrate. We'll also help recover it by being very deliberate with cost outs. To some extent, this is a familiar place for us over the last few years, as we work to balance cost reductions with investments in the company. We'll start by taking a hard look at our business and product lines.

我們也利用其他手段來推動利潤率的提高。其中包括增量銷售成長和潛在的併購。我們的併購管道由中小型品牌草坪和花園公司組成，這些公司屬於相鄰類別，很容易整合。我們還將透過深思熟慮的成本支出來幫助恢復它。在某種程度上，這是我們過去幾年所熟悉的地方，因為我們努力平衡成本削減與公司投資。我們將首先認真審視我們的業務和產品線。

That's the impetus behind our recent decision to discontinue AeroGarden. This was a business we bought and invested in for a reason. It was an entry into direct to the consumer and expanded our indoor and urban gardening portfolio.

這就是我們最近決定停止使用 AeroGarden 的動力。這是我們購買和投資的企業是有原因的。這是直接面向消費者的一個切入點，並擴大了我們的室內和城市園藝產品組合。

Despite the strategic rationale, AeroGarden has not been profitable, and this is not the time to burden our recovery with things that are not supporting or accelerating our financial improvement. We had to make similar choices with Hawthorne, and I can tell that I personally grieve over some of the things we had to cut. We'll also continue to optimize operations.

儘管有戰略理由，AeroGarden 尚未實現盈利，現在還不是用不支持或加速我們的財務改善的事情來負擔我們的復甦的時候。我們不得不對霍桑做出類似的選擇，我可以看出，我個人對我們不得不削減的一些東西感到悲傷。我們也將繼續優化營運。

Investments we've made in automation, demand planning and predictive analytics will enable us to take another $150 million out of our supply chain over the next three years. We're for sure a leaner company. The next step in our organization is to figure out how to operate as a much more efficient and effective team.

我們在自動化、需求規劃和預測分析方面的投資將使我們能夠在未來三年內從供應鏈中再獲得 1.5 億美元的收入。我們肯定是一家更精簡的公司。我們組織的下一步是弄清楚如何作為一個更有效率和有效的團隊運作。

It will not only include more cost reductions, but also lead to a creation of a structure and cultural mindset in which everyone is focused on the right things for the future of our company. And this will require us to be more flexible and move with speed.

它不僅會進一步降低成本，還會創造一種結構和文化心態，使每個人都專注於公司未來的正確事物。這將要求我們更加靈活並快速行動。

To this end, Rich Turner has joined my team as the Head of Human Resources to lead this process and take a new look at the entire organization.

為此，里奇·特納 (Rich Turner) 加入我的團隊，擔任人力資源主管，領導這項流程並對整個組織進行新的審視。

Let's shift to how we see '25 unfolding. You can expect us to go after more growth and bottom-line improvement. We're guiding to EBITDA of $570 million to $590 million, an increase of 6% to 9% over 2024's adjusted EBITDA. And we're projecting sales growth of 2% in our consumer business, along with $20 million in EBITDA from Hawthorne. Hawthorne's narrower focus will reduce top-line sales but improve its margins. We'll ramp up investments too in both consumer and Hawthorne.

讓我們轉向如何看待 25 年的發展。您可以期待我們追求更多的成長和利潤的改善。我們預計 EBITDA 為 5.7 億至 5.9 億美元，比 2024 年調整後 EBITDA 成長 6% 至 9%。我們預計消費者業務的銷售額將成長 2%，Hawthorne 的 EBITDA 營收將達到 2,000 萬美元。霍桑的業務範圍縮小將減少營收，但會提高利潤率。我們也將加大對消費者和霍桑的投資。

Our brands are not just to Scotts Miracle-Gro superpower. They are to Hawthorne as well. And they're going to be spending an incremental $10 million on brand support in their business too. In our consumer business, we'll invest over $30 million more in advertising, marketing, brands and innovation. Core consumers continue to be our primary target, but we'll do more to bring new people into our category. In addition to our higher investment spend I mentioned earlier, we're going to spend more money promoting with our retailers.

我們的品牌不僅僅是 Scotts Miracle-Gro 的超級大國。他們也要去霍桑。他們還將額外花費 1000 萬美元用於其業務的品牌支援。在我們的消費者業務中，我們將在廣告、行銷、品牌和創新方面再投資超過 3000 萬美元。核心消費者仍然是我們的主要目標，但我們將採取更多措施將新用戶引入我們的類別。除了我之前提到的更高的投資支出之外，我們還將花更多的錢與零售商進行促銷。

We expect this to result in increased foot traffic for them and additional listings and shelf space for us. This is powerful. The retailer programs drive more volume, along with margin recovery through fixed-cost absorption.

我們預計這會增加他們的人流量，並為我們帶來更多的清單和貨架空間。這很強大。零售商計劃可以增加銷量，並透過固定成本吸收來恢復利潤。

The net effect of all of our investments this year will be additional consumer takeaway and even more share gains, building upon the substantial share gain we got in fiscal '24. One of the superpowers is our field sales force that regularly engages with consumers and finds ways to capture additional POS within the store.

我們今年所有投資的淨效應將是在我們 24 財年獲得的可觀份額收益的基礎上，獲得更多消費者收益，甚至獲得更多份額收益。我們的現場銷售團隊是我們的超級力量之一，他們定期與消費者接觸，並找到在商店內獲取更多 POS 的方法。

I'm throwing down a challenge to our in-store teams. I want them to do more to drive growth. I think they can deliver at least an incremental 1% more in sales. I'm encouraged by their energy and enthusiasm, and I'm confident they'll rise to the challenge through in-store activities combined with securing off-shelf and end-cap opportunities.

我正在向我們的店內團隊提出挑戰。我希望他們採取更多措施來推動成長。我認為他們的銷售額至少可以增加 1%。他們的活力和熱情讓我深受鼓舞，我相信他們將透過店內活動以及確保現貨和終端機會來應對挑戰。

Line extensions will also play a role in incremental growth. This year, we'll expand the Miracle-Gro Organic line to include a full portfolio spanning plant food to indoor and outdoor soils. These products will complement the strong raised bed and mulch innovations that we introduced in '24. This year's Ortho Weed Preventer is a new space for Ortho.

產品線延伸也將在增量成長中發揮作用。今年，我們將擴展 Miracle-Gro Organic 系列，涵蓋從植物性食品到室內和室外土壤的完整產品組合。這些產品將補充我們在 24 年推出的強大的高架床和覆蓋物創新。今年的 Ortho 除草劑是 Ortho 的一個新領域。

Just as importantly, it sends a message. We will be taking a more aggressive approach in attacking the competition across all of our brands through multiple tactics. This includes advertising and messaging, new branded solutions and key adjacencies, and targeted M&A where it makes financial sense.

同樣重要的是，它發送了一條訊息。我們將採取更積極的方式，透過多種策略來應對我們所有品牌的競爭。這包括廣告和訊息、新品牌解決方案和關鍵鄰接，以及具有財務意義的有針對性的併購。

In lawns, we're going to launch a new O.M. Scotts & Son natural lawn fertilizer and grass seed. And here's what's exciting about this. This brand will feature legacy-inspired packaging made of curbside recyclable paper. It will be the first product packaging to include our purpose to grow more good. This product line will allow us to introduce Scotts brands to a whole new group of consumers.

在草坪上，我們將推出新的 O.M. Scotts & Son 天然草坪肥料和草籽。這就是令人興奮的地方。該品牌將採用由路邊可回收紙製成的傳統風格包裝。這將是第一個包含我們「種植更多優質產品」的宗旨的產品包裝。該產品線將使我們能夠將 Scotts 品牌介紹給全新的消費者群體。

When it comes to the power of our brands, I think it's important to do more than just talk about it. It's better to show you what's coming this spring. This starts with our marketing leadership. We've infused new energy into the brands with impactful leaders who are proven marketers and creative minds. They're young people with really good ideas on where they want to drive their businesses.

當談到我們品牌的力量時，我認為重要的是要做到不僅僅是談論它。最好向您展示今年春天將會發生什麼。這要從我們的行銷領導力開始。我們透過具有影響力的領導者為品牌注入了新的活力，他們都是經過驗證的行銷人員和創意頭腦。他們是年輕人，對於推動業務發展有著非常好的想法。

Sadie Oldham leads our gardens business with the support from Martha Stewart, our Chief Gardening Officer. Mike Davitt oversees controls and John Sass heads lawns. And we're having a lot of fun getting everything in place for next spring. Let me share these two messages I received from Martha during a recent commercial shoot

Sadie Oldham 在我們的首席園藝官 Martha Stewart 的支持下領導我們的花園業務。麥克·戴維特（Mike Davitt）負責監督控制，約翰·薩斯（John Sass）負責草坪。我們很高興為明年春天做好一切準備。讓我分享一下我在最近的一次廣告拍攝中從瑪莎收到的兩則訊息

(video playing)

（影片播放）

Yes, I'm going to let each business talk about what's up for this coming season.

是的，我將讓每個企業談論下一季的情況。

(video playing)

（影片播放）

As you can see, we're attacking the market even harder in 2025, and we're comfortable with our guidance. The analysts who cover our company will run their own models on how they think we'll perform, and they might come up with numbers even bigger than ours. But I want to stress this about our guidance. It's achievable. It's a realistic roadmap. We're confident we will deliver upon it, and we have upside to achieve more.

正如您所看到的，我們將在 2025 年更加努力地進攻市場，並且我們對我們的指導感到滿意。報告我們公司的分析師將根據他們認為我們的表現運行自己的模型，他們可能會得出比我們更大的數字。但我想強調一下我們的指導。這是可以實現的。這是一個現實的路線圖。我們有信心能夠實現這一目標，而且我們還有空間取得更多成就。

When you look at what we've accomplished in our journey and our plans for this year, I believe we're driving a very acceptable financial recovery. We're doing so by successfully balancing diligent financial management with maximum spend on our superpowers. I think we're creating long-term value and building a very powerful and special consumer franchise.

當你看到我們在這一歷程中所取得的成就以及今年的計劃時，我相信我們正在推動一個非常可接受的財務復甦。我們透過成功地平衡勤勉的財務管理和最大程度地花在我們的超級大國上來做到這一點。我認為我們正在創造長期價值並建立一個非常強大且特殊的消費者特許經營權。

It's been an awful lot of work, and I have many people to thank for their support and commitment. This includes our shareholders, our associates, our board of directors, our banks, our retail partners, and my management team.

這是一項艱鉅的工作，我要感謝很多人的支持和承諾。這包括我們的股東、我們的同事、我們的董事會、我們的銀行、我們的零售合作夥伴和我的管理團隊。

I'll turn it over to Matt for additional perspective on our performance and outlook.

我會將其轉交給馬特，以獲取有關我們績效和前景的更多觀點。

Thank you, Jim, and hello, everyone. 2024 marked another year that our team made progress in returning SMG to profitable growth. We improved consumer engagement, expanded margins, and strengthened the balance sheet. We increased investments in our brands and optimized our portfolio for the long-term health of the business. I'm extremely proud of the momentum we have built and how we have come together to increase the pace in 2025.

謝謝吉姆，大家好。 2024 年是我們團隊在 SMG 恢復獲利成長方面取得進展的另一年。我們提高了消費者參與、擴大了利潤並強化了資產負債表。我們增加了對品牌的投資並優化了產品組合，以實現業務的長期健康發展。我對我們所建立的勢頭以及我們如何齊心協力在 2025 年加快步伐感到非常自豪。

Before we dig in, note that our '24 financials include the impact of winding down AeroGarden, a $30 million revenue business. This difficult decision was the primary driver of an inventory write-down of $29 million that runs through the US consumer profitability. As I discuss our performance, I will walk you through how to treat these items for comparison purposes. And now let's turn to top-line results.

在我們深入探討之前，請注意我們 24 年的財務數據包括關閉 AeroGarden（一家收入為 3000 萬美元的業務）的影響。這項艱難的決定是導緻美國消費者獲利能力下降 2,900 萬美元的庫存減記的主要原因。當我討論我們的效能時，我將引導您了解如何處理這些項目以進行比較。現在讓我們來看看最重要的結果。

Total company net sales increased 11% for the quarter, and on a full-year basis, we're essentially flat to prior year at $3.55 billion. US consumer sales increased 54% in the quarter, driven by the previously discussed timing of shipments between the third and fourth quarters of fiscal '23, as well as the fall load-in to retailers. Retailer inventories are in a good place and POS units so far this fiscal year are up about 10%, driven by gardens and controls.

本季公司總淨銷售額成長了 11%，全年基本持平，為 35.5 億美元。我們由於先前討論的 23 財年第三季和第四季之間的出貨時間以及零售商的秋季裝貨，該季度消費者銷售額增長了 54%。在花園和控制措施的推動下，零售商庫存狀況良好，本財年迄今為止，POS 設備數量增加了約 10%。

For the full year, US consumer net sales ended 6% higher than prior year, and volume and mix up 7%, offset by 1% lower net pricing. Increased media and the targeted price concessions we took yielded foot traffic gains for our retailers and the incremental listings and volumes we planned for. POS units were up nearly 9% on the year.

全年來看，美國消費者淨銷售額比上年增長 6%，銷量和混合增長 7%，但被淨定價下降 1% 所抵消。增加的媒體和我們採取的有針對性的價格優惠為我們的零售商帶來了人流量增加，並增加了我們計劃的清單和數量。POS 數量較去年同期成長近 9%。

At Hawthorne, sales declined 46% in the fourth quarter and 37% for the full year. This result was in line with our guidance following the second quarter decision to exit third-party distribution business. From a gross margin perspective, if we were to exclude the impact of the inventory write-offs, we achieved 340 basis points of year-over-year margin improvement, which tracked well ahead of our goal for the fiscal year.

Hawthorne第四季銷售額下降了46%，全年銷售額下降了37%。此結果符合我們第二季決定退出第三方分銷業務後的指引。從毛利率角度來看，如果排除庫存沖銷的影響，我們的利潤率比去年同期提高了 340 個基點，遠遠超出了我們本財年的目標。

Inclusive of the write-offs, total company non-GAAP gross margin rate improved 260 basis points over prior year to 26.3%. SG&A ended the year within our guidance range at 15.7% of net sales. Excluding the inventory write-offs, operating income was around 11% of sales and EBITDA was $539 million, an improvement of 20% versus fiscal '23. When including the write-offs, adjusted operating income for the fiscal year was $355 million or 10% of sales, and non-GAAP adjusted EBITDA was $510 million.

包括沖銷在內，公司總非 GAAP 毛利率比前一年提高 260 個基點，達到 26.3%。SG&A 年末佔淨銷售額的 15.7%，處於我們的指導範圍內。不包括庫存沖銷，營業收入約為銷售額的 11%，EBITDA 為 5.39 億美元，比 23 財年提高了 20%。計入沖銷後，本財政年度調整後營業收入為 3.55 億美元，佔銷售額的 10%，非 GAAP 調整後 EBITDA 為 5.10 億美元。

Below the line, interest expense was down by $19 million on lower average borrowings and debt paydown. Our non-GAAP adjusted effective tax rate for the year improved to 28.5%. All in, the fourth quarter adjusted loss, which excludes impairment, restructuring, and other non-recurring items, was $2.31 per share versus $2.77 per share last year. Full-year adjusted earnings per share improved nearly 90% to $2.29 versus $1.21 in fiscal '23. Note that inventory write-offs negatively impacted current year EPS by $0.35 and prior year EPS by $0.25.

線下，由於平均借款和債務償還減少，利息支出減少了 1,900 萬美元。我們本年度的非 GAAP 調整後有效稅率提高至 28.5%。總而言之，第四季度調整後虧損（不包括減損、重組和其他非經常性項目）為每股 2.31 美元，去年同期為每股 2.77 美元。全年調整後每股收益成長近 90%，達到 2.29 美元，而 23 財年為 1.21 美元。請注意，庫存沖銷對本年度 EPS 產生了 0.35 美元的負面影響，對前一年 EPS 產生了 0.25 美元的負面影響。

Now let's move on to free cash flow in the balance sheet. We delivered on our target of generating over $1 billion of free cash flow over two years with more than $580 million generated this year on top of nearly $440 million last year. Inventories ended fiscal '24 just below $600 million, a level we will seek to maintain for the foreseeable future. We utilized free cash flow to return value to shareholders through our quarterly dividend and increased balance sheet strength by lowering debt by $390 million. Liquidity remained strong with nearly $1.2 billion in borrowing capacity and $70 million of cash on hand. Leverage improved to 4.86 times adjusted EBITDA versus a covenant maximum of 6x.

現在讓我們繼續討論資產負債表中的自由現金流。我們實現了兩年內產生超過 10 億美元自由現金流的目標，在去年近 4.4 億美元的基礎上，今年產生了超過 5.8 億美元。2024 財年末的庫存略低於 6 億美元，我們將在可預見的未來力求維持這一水準。我們利用自由現金流透過季度股息向股東回報價值，並透過減少 3.9 億美元的債務來增強資產負債表實力。流動性依然強勁，借貸能力接近 12 億美元，手上現金為 7,000 萬美元。槓桿率提高至調整後 EBITDA 的 4.86 倍，而契約上限為 6 倍。

Now, turning to fiscal 2025, we are continuing to take prudent steps to strengthen Scotts Miracle-Gro and build on the strong momentum of 2024. The primary objectives of our '25 plan are expanding margins, delivering strong free cash flow and EBITDA, and making high-impact investments in the long-term health of our brands.

現在，展望 2025 財年，我們將繼續採取審慎措施，強化 Scotts Miracle-Gro，並在 2024 年的強勁勢頭基礎上再接再厲。我們 '25 計劃的主要目標是擴大利潤，提供強勁的自由現金流和 EBITDA，並對我們品牌的長期健康進行高影響力的投資。

On the US consumer top line, we expect volume increases, the result of incremental promotions, listings and share that will build upon the significant gains of 2024. This will contribute to the low single-digit growth that Jim mentioned. At Hawthorne, net sales are expected to decline mid-single digits versus last year, primarily on exiting the third-party distribution business.

在美國消費者收入方面，我們預期銷售量會增加，這是增量促銷、上市和份額的結果，這將建立在 2024 年顯著成長的基礎上。這將導致吉姆提到的低個位數成長。在霍桑，淨銷售額預計將比去年下降中個位數，這主要是由於退出第三方分銷業務。

But now let's take a look at gross margin. The core of our margin recovery progression is supply chain savings, which we see totaling $150 million over the next three years. Given outstanding work by the team to capture raw material savings and drive higher fixed-cost leverage sooner, we now expect about half of these savings will be achieved in fiscal 2025. This will yield a full-year gross margin rate near 30%, and, to Jim's earlier point, a recovery of nearly two-thirds of the margin loss from pre-pandemic levels.

但現在讓我們來看看毛利率。我們利潤恢復進程的核心是供應鏈節省，我們預計未來三年總計將達到 1.5 億美元。鑑於團隊在節省原材料和更快提高固定成本槓桿方面所做的出色工作，我們現在預計其中約一半將在 2025 財年實現。這將使全年毛利率接近 30%，並且按照吉姆早些時候的說法，利潤損失將比大流行前的水平恢復近三分之二。

As we mentioned previously, not all of the gross margin dollars will hit EBITDA, as we are investing greater than $40 million in media and brand strength, buttressing the long-term health and sustainability of our businesses. 2025 adjusted EBITDA is expected to range from $570 to $590 million, with total adjustments to operating income flat year-over-year. Below the operating line, we see interest expense lower by $10 million versus 2024 on lower average borrowings and rate for the full year.

正如我們之前提到的，並非所有毛利率都會影響 EBITDA，因為我們在媒體和品牌實力方面投資超過 4000 萬美元，以支持我們業務的長期健康和永續發展。 2025 年調整後 EBITDA 預計在 570 美元至 5.9 億美元之間，營業收入調整總額較去年同期持平。在營業線以下，由於全年平均借款和利率較低，我們預計利息支出將比 2024 年減少 1,000 萬美元。

And to finish out the P&L point of view, other expense will increase by $10 million, our effective tax rate will be between 27% and 29%, and share count will grow by approximately 2 million shares. Free cash flow is expected to be around $250 million, including increased CapEx of $100 million.

從損益表來看，其他費用將增加 1,000 萬美元，我們的有效稅率將在 27% 至 29% 之間，股票數量將增加約 200 萬股。自由現金流預計約 2.5 億美元，其中資本支出增加 1 億美元。

And lastly, from a net leverage perspective, we expect to end the year in the low fours, well below the max covenant of 4.75 times adjusted EBITDA. So let me summarize the outlook. Progress in fiscal ‘25 against our three-year plan will be substantial and inclusive of investments in our future.

最後，從淨槓桿率的角度來看，我們預計今年年底將處於低四水平，遠低於 4.75 倍調整後 EBITDA 的最高承諾。讓我總結一下展望。與我們的三年計劃相比，25 財年的進展將是巨大的，並且包括對我們未來的投資。

We are energized and driving efficiencies to fuel our superpowers. Our targets on this path are clear. Sustainable, profitable growth, gross margins commensurate with our leadership position, and robust financial flexibility. With that, I'll turn the call back to the operator so we can answer your questions. Operator?

我們充滿活力並提高效率，為我們的超級大國提供動力。我們在這條道路上的目標是明確的。可持續的獲利成長、與我們的領導地位相稱的毛利率以及強大的財務靈活性。這樣，我會將電話轉回接線員，以便我們回答您的問題。操作員？

(Operator Instructions)

（操作員說明）

Jon Andersen with William Blair.

喬恩·安德森和威廉·布萊爾。

Hey, Good morning, everybody. Thanks for the questions. I wanted to ask first about your top-line guidance. Thanks for providing that, by the way, for ‘25. But I'm hoping you can provide a clarification on that guide specifically for the US consumer business.

嘿，大家早安。感謝您的提問。我想先詢問您的首要指導。順便說一下，感謝您提供 25 美元的資訊。但我希望您能專門針對美國消費者業務對該指南進行澄清。

It sounds like there may be some one-time items or factors in 2024 that won't repeat. I think AeroGarden perhaps being one of them. How does that affect the guidance of kind of low single digits that you've offered? If you can kind of sort through some of the puts and takes there for greater clarity, that would be helpful.

聽起來可能有一些一次性的項目或因素在 2024 年不會重複。我認為 AeroGarden 可能是其中之一。這對您提供的低個位數指導有何影響？如果您可以對一些看跌期權和看跌期權進行排序以更加清晰，那將會很有幫助。

Yeah. Hey John. This is Nate. I'll take that one. Look, if we look at our core branded products, I think it's right in line with what Jim and Matt said. We're looking at low single-digit growth. The one-times are important, so we won't repeat the AG sales.

是的。嘿約翰。這是內特。我會接受那個。看，如果我們看看我們的核心品牌產品，我認為這與吉姆和馬特所說的相符。我們正在尋找低個位數成長。一次性很重要，所以我們不會重複AG銷售。

We also did some inventory balancing with sales of both urea and seed that were one-time in 2024 that we don't expect to repeat. So when I look at what I think matters, which is this core branded products, we see healthy growth and market share gains next year.

我們也對尿素和種子的銷售進行了一些庫存平衡，這是 2024 年一次性進行的，我們預計不會重複。因此，當我審視我認為重要的核心品牌產品時，我們看到明年的健康成長和市場份額的成長。

Okay. Do you have a quantification of what some of the one-timers may have been with AG and the urea and seed sales?

好的。您是否對 AG 以及尿素和種子銷售中的一些一次性產品的情況進行了量化？

Sure, I'll let Matt take that.

當然，我會讓馬特接受。

Thanks, Nate. And I think context here is extremely important, right, which is the investments we made in 2024 laid the groundwork for 9% growth, which I think we're going to reflect on and say that was a big win, right, volume, POS, the things that we did to drive people into the store.

謝謝，內特。我認為這裡的背景非常重要，對，我們在 2024 年進行的投資為 9% 的增長奠定了基礎，我認為我們將反思並說這是一個巨大的勝利，對，數量，POS ，我們為吸引人們進入商店所做的事情。

We are making those same investments in 2025 to grow share, bring new innovation to the market, and position ourselves better than anyone else. What does that mean? It means we got pricing, we made investments in programs, and so those two net off. When you look at this 2%, underlying that is a 5% POS growth. I'm going to say mid-single digits.

我們將在 2025 年進行同樣的投資，以擴大市場份額，為市場帶來新的創新，並使自己比其他任何人都處於更有利的地位。這意味著什麼？這意味著我們獲得了定價，我們對項目進行了投資，所以這兩者相抵消。當你看到這 2% 時，潛在的 POS 成長是 5%。我要說的是中個位數。

Everyone in the room just frowned at me because they didn't want me to give a pure number there, John. But as Nate said, making investments, those one-timers are worth about 2%, John. So you really take the good work the team has done in driving volumes, that $30 million of AeroGarden, the kind of $20 million to $30 million of raw material sales that we did at the end of the year, by the way, all of that essentially zero margin. So just prudent stuff to work it through, and AeroGarden we were shutting down.

房間裡的每個人都對我皺眉，因為他們不想讓我在那裡給出一個純粹的數字，約翰。但正如內特所說，進行投資時，那些一次性投資人的價值約為 2%，約翰。所以你真的可以接受團隊在推動銷售方面所做的出色工作，即 3000 萬美元的 AeroGarden，就像我們在年底所做的 2000 萬至 3000 萬美元的原材料銷售一樣，順便說一句，所有這些本質上是零利潤。因此，我們需要謹慎行事，然後我們就關閉了 AeroGarden。

That makes the baseline about zero. But as Nate said, underlying that zero is really strong improvements, and the last point on that is the share that we're going to grab. And I know the share story was a little complex this year in terms of how can we get more share.

這使得基線大約為零。但正如內特所說，零的背後是真正強大的改進，最後一點是我們要抓住的份額。我知道今年的分享故事有點複雜，我們如何才能獲得更多分享。

And actually, Nate, I'm going to toss it back to you because it is a good story on making the right investments to grow this brand.

事實上，內特，我要把它扔回給你，因為這是一個關於如何進行正確的投資來發展這個品牌的好故事。

And by the way, do the right things for the long term of the company, and they're going to show up this year, but because of that 2% points in non-repeating one-time things, it's just going to show on you as a consumer around flat.

順便說一句，為了公司的長期發展，做正確的事情，它們將在今年出現，但由於非重複的一次性事情中有 2% 的點，它只會在你作為一個消費者周圍的公寓。

But underlying that is really strong economics. Nate, just a little.

但背後是真正強大的經濟。內特，一點點。

So if you look at what I expect with the innovation that you saw in Jim's prepared remarks, we're going to drive a ton of incremental volume around not only those, but also the share we gained last year. I'm not looking at any losses. Know, we've got ins and outs on some of the private label stuff, but at the end of the day, we feel very good about that. I think Matt said it well. We are focused on making smart decisions around SKUs that drive margin accretion. And that's why we got rid of [AeroGarden] (corrected by company after the call). It's why we're biased towards focusing on some of our core branded products because that'll drive margin growth for us.

因此，如果你看看我對吉姆準備好的演講中看到的創新的期望，我們將不僅圍繞這些，而且圍繞我們去年獲得的份額推動大量增量。我不考慮任何損失。要知道，我們已經了解了一些自有品牌的細節，但最終，我們對此感覺非常好。我覺得馬特說得很好。我們專注於圍繞 SKU 做出明智的決策，以推動利潤成長。這就是為什麼我們擺脫了[AeroGarden]（公司在通話後更正）。這就是為什麼我們偏向專注於我們的一些核心品牌產品，因為這將推動我們的利潤成長。

That's helpful. Just a quick follow-up. I think Jim mentioned $700 million in EBITDA as the goal in the prepared comments three-year target. I think it was $600 million that was referenced at the Analyst Investor Day earlier this summer.

這很有幫助。只是快速跟進。我認為吉姆在準備好的三年目標評論中提到了 7 億美元的 EBITDA 目標。我認為今年夏天早些時候的分析師投資者日提到的金額是 6 億美元。

Can you just provide a kind of a clarification there on what the objective is? And also on the gross margin rate, just to update there, it's kind of mid-30s, still where we're hoping to end by fiscal 27th, thanks.

能否澄清一下目標是什麼？還有毛利率，只是更新一下，大約是 30 多歲，仍然是我們希望在 27 財年結束的水平，謝謝。

Yes, I'll take that. So, Jim here. For sure, $700 million EBITDA by '27 is what I'm whipping the company toward. And I feel really good about sort of where we are and what we're planning for next year. And our incentive targets are very highly levered against these objectives.

是的，我會接受的。那麼，吉姆在這裡。當然，我希望公司在 27 年實現 7 億美元的 EBITDA。我對我們的現狀以及明年的計劃感到非常滿意。我們的激勵目標與這些目標的槓桿率非常高。

By '27, that's what we're looking for. I think this lines up with trying to get leverage below 3 times by '27. It's not accidental what we got there. It's driving toward a leverage number of, call it three-ish times, by '27. What's the second question?

到 27 年，這就是我們正在尋找的。我認為這與努力在 27 年之前將槓桿率降至 3 倍以下是一致的。我們到達那裡並不是偶然的。到 27 年，槓桿率將達到三倍左右。第二個問題是什麼？

Margin. Can you get to the mid-30s?

利潤。你能活到30多歲嗎？

Yeah, we definitely can. I think the explanation was important. You guys saw me disagree with the rest of the leadership team, I think, in July at the Investor conference. I thought that the margin declined, occurred sort of post-COVID. The mirror image of that is if you look at retailer margins, they were up kind of that level. And our view is that was never intended to be a permanent end state.

是的，我們絕對可以。我認為解釋很重要。我想，你們在七月的投資人會議上看到了我與領導團隊其他成員的不同意見。我認為利潤率下降是在新冠疫情之後發生的。與之相對應的是，如果你觀察零售商的利潤率，你會發現它們的利潤率上升。我們的觀點是，這從來都不是永久的最終狀態。

Discussions that I had with leadership at retailers just basically said, look, if you guys take this kind of pricing and you don't make sure that it sticks at the consumer level, and we have to match other retailers who don't pass it on, you're going to mess up our margins at a time where our business is not super strong. And that would be very unwelcome.

我與零售商領導層進行的討論基本上只是說，看，如果你們採用這種定價，並且不確保它在消費者層面上保持不變，我們就必須匹配其他未通過該定價的零售商繼續下去，在我們的業務還不是很強勁的時候，你就會搞亂我們的利潤。這將是非常不受歡迎的。

And then I think a sort of mutual concern that consumers just, look, I think you just look at the election results. I think it's clear. Consumers, whether the sort of Washington thinks the economy is messed up, I think if you asked consumers, I met yesterday with our plant supervisors. These are kind of like the sergeants that work in our plant.

然後我認為消費者只是一種相互關注，看，我認為你只看選舉結果。我想很清楚了。消費者，華盛頓是否認為經濟一團糟，我想如果你問消費者，我昨天會見了我們的工廠主管。他們有點像在我們工廠工作的中士。

And I asked them how many of them were living sort of paycheck to paycheck. And these are mid-level managers at our business. And I think virtually all their hands went up. And when I was given kind of a preview of what we're going to talk about today. When we got to lawns pricing, I think there was definitely a view that, yeah, this stuff's gotten expensive. So I think the retailers pushed back and said, I don't think the consumer can handle more pricing.

我問他們有多少人過著靠薪水過活的生活。這些是我們公司的中階管理人員。我認為幾乎所有的人都舉起了手。當我預覽了我們今天要討論的內容。當我們談到草坪定價時，我認為肯定有人認為，是的，這些東西變得昂貴了。所以我認為零售商反駁說，我認為消費者無法接受更高的定價。

So we got to this point then of saying, all right, we're limited in what we can do here. The sort of better than 1% pricing, which I think is what we said to you guys, we got, we feel good about that. But the goal is to get back to a mid-30s gross margin. I guess this is the answer to your question that I've been talking at. And the intent is still to get there. Part of our program work, which, you know, when we talk about retailer programs, this is one that's easy to get like all messed up on.

所以我們到了這一步，好吧，我們在這裡能做的事情是有限的。那種比 1% 更好的定價，我想這就是我們對你們說的，我們得到了，我們對此感覺很好。但我們的目標是恢復到 30 多歲的毛利率。我想這就是我一直在談論的你的問題的答案。我們的目的仍然是到達那裡。我們計劃工作的一部分，你知道，當我們談論零售商計劃時，這是一個很容易搞砸的計劃。

And, you know, this is not a rebate program for sort of being alive. You get what we did this year and what we're going to be doing again in ‘25, or sort of compared ‘24 to ‘25, is we're paying for incremental promotion, incremental listings, extended promotions.

而且，你知道，這不是為了生存而進行的回扣計畫。你明白了我們今年所做的事情，以及我們將在 25 年再次做的事情，或者將 24 月與 25 月進行比較，我們正在為增量促銷、增量列表、擴展付費。

And those things pay off. I think you look at the results this year in a down market, and I think The Scotts results are pretty phenomenal to be honest. That helps us with absorption in our manufacturing facilities. And so it is margin accretive for us to do these things. And the money we want to invest behind call it marketing, but our superpowers.

這些事情都會得到回報。我想你看看今年在低迷市場中的業績，說實話，我認為斯科特的業績相當驚人。這有助於我們專注於我們的製造設施。因此，做這些事情可以增加我們的利潤。我們想要投資的資金稱為行銷，但我們的超能力。

So these are all things we're doing, and the goal of mid-30s on gross margin is intact. And, you know, we are going to work really hard, really over, I think, this quarter and maybe into the first half of our fiscal year to button down the savings that augment what we don't think we can get from pricing.

所以這些都是我們正在做的事情，30 多歲的毛利率目標完好無損。而且，你知道，我們將非常努力地工作，我想，在本季度，甚至可能到我們財政年度的上半段，以減少我們認為無法從定價中獲得的節省。

Altobello with Raymond James.

阿爾托貝洛和雷蒙德詹姆斯。

Thanks. Hey guys, good morning. Just wanted to follow up on that last comment, Jim, and one you made earlier in the call. I think you said margin expansion will be a little bit more challenging after fiscal '25. You're still looking for call it, mid-30s gross margins by fiscal '27. -- although it sounds like pricing will be less of a component of that. So is it really just finding other margin drivers outside of pricing to still get to that same end goal.

謝謝。嘿夥計們，早安。只是想跟進最後的評論，吉姆，以及你之前在電話中發表的評論。我認為您說過 25 財年之後利潤率擴張將更具挑戰性。您仍在尋找 27 財年 30 年代中期的毛利率。 ——儘管聽起來定價將不再是其中的一部分。那麼，是否真的只是尋找定價以外的其他利潤驅動因素來仍然達到相同的最終目標？

Look, I know everybody around the table probably wants me to say yes. I think the answer is no. I was deliberate in saying at this time on pricing. Retailer margins were kind of the mirror image of ours. And I never viewed those as being permanent I think it is just not an appropriate time to sort of fight with retailers over getting it back, while they're trying to rebuild their business post COVID as well. So I don't think I'm giving up on pricing. I think, hopefully, the election makes people happier and wealthier.

聽著，我知道桌子周圍的每個人可能都希望我答應。我想答案是否定的。我這時候說定價是故意的。零售商的利潤率有點像我們的鏡像。我從來不認為這些是永久性的，我認為現在不是與零售商爭奪退款的適當時機，而他們也在努力在新冠疫情後重建業務。所以我不認為我會放棄定價。我認為，希望這次選舉能讓人們更快樂、更富有。

But if we can't get through as much pricing as I'd like, we're going to get it through more sales with good margin products and cutting expenses here in our business, and we're going to do both. But I don't think that pricing is through '27 out the window I think it is not something at this moment that we can count on beyond what we already got.

但如果我們無法獲得我想要的定價，我們將透過利潤率高的產品增加銷售並削減我們業務的開支來實現這一目標，我們將同時做到這兩點。但我不認為27年之前的定價是不可能的，我認為目前我們不能指望超出我們已經獲得的價格。

Agreed. Let me just add on to that, Joe. I think when you look at innovation that's in the pipeline that will be coming out, along with our business unit focus on making sure that we're putting high-margin SKUs out there I think that, along with pricing, along with the business transformation that Jim is talking about, we'll have levers to play to get to those mid-30s.

同意。讓我補充一下，喬。我認為，當你看到即將推出的創新，以及我們的業務部門專注於確保我們推出高利潤的 SKU 時，我認為，除了定價之外，還有業務轉型吉姆所說的，我們將有辦法達到30 多歲。

And let me just add, Joe, because I think there's some important context and perspective. What are we talking about? We are talking about a margin in '23, that was 23.6%, and we're talking about getting ourselves back to the mid-30s, right? If you go point to point, as we showed you, at the July Investor Day, it was roughly 900 basis points. It's been '23 between '24 and '25 we're getting essentially 600 basis points, right?

讓我補充一下，喬，因為我認為有一些重要的背景和觀點。我們在說什麼？我們談論的是 23 年的利潤率，即 23.6%，我們談論的是讓自己回到 30 多歲，對嗎？如果你逐點查看，正如我們在 7 月投資者日向您展示的那樣，價格約為 900 個基點。從24年到25年是23年，我們基本上獲得了600個基點，對吧？

So, we went from 23.6% to 27%, my math, 340 basis points in '24. We're putting on the table getting to 30-ish in '25, that's another 300 basis points. So 650 out of 900. The balance of the supply chain savings that we are talking about, we're going to get. And so that's another, let's call it, 150, 200 basis points.

所以，我們從 23.6% 上升到 27%，我的數學，24 年上升了 340 個基點。我們預計 25 年將達到 30 左右，即另外 300 個基點。所以 900 分中的 650 分。我們正在談論的供應鏈節省的平衡，我們將會得到。這是另一個，我們稱之為 150、200 個基點。

So what Jim is really talking about is those 200 to 300 basis points that sit out there that we need to optimize around. But the big chunks of our margin recovery, I'm not going to say are complete because we still need to execute. We still need to go get them, but they are visible and they are planned for. So the margin recovery into the 30s very strong, very tangible.

所以 Jim 真正在談論的是我們需要優化的 200 到 300 個基點。但我不會說我們的利潤恢復的大部分已經完成，因為我們仍然需要執行。我們仍然需要去獲取它們，但它們是可見的並且是有計劃的。因此，利潤率在 30 年代的恢復非常強勁、非常明顯。

Getting to the mid-30s we got two years; Nate and I talk about it every day. We have two to three years to get there, and we're going to get there. And it's going to be a whole number of things like they just articulated.

到了30多歲，我們還有兩年的時間；內特和我每天都會談論這件事。我們還有兩到三年的時間才能實現這一目標，而且我們一定會實現這一目標。這將涉及到很多事情，就像他們剛才所闡述的那樣。

So, we feel really good about the margin climb out. I'm going to let other people ask questions about what happens down the P&L unless you have one, but there are other important contextual factors here in '25 and as we move forward.

因此，我們對利潤率的攀升感到非常滿意。我將讓其他人詢問有關損益表中發生的情況的問題，除非您有這樣的問題，但在 25 年以及我們前進的過程中，還有其他重要的背景因素。

Got it. Very helpful. Just a follow-up on that. I mean, obviously, you talked about returning cash to shareholders. And at least historically, share buybacks have been a big part of that. I get the fact that the balance sheet is a little bit or a lot stretched in the past, less so now. When do you guys anticipate maybe pivoting back toward that share repurchase activity?

知道了。非常有幫助。只是對此的後續行動。我的意思是，顯然，您談到了向股東返還現金。至少從歷史上看，股票回購一直是其中的重要組成部分。我知道資產負債表過去有點或很大，但現在有所緩解。你們預計什麼時候會轉向股票回購活動？

Yeah. And it's in the context of actually really the target that Jim laid out, right? Because it is about financial flexibility. The company historically would have had a net leverage position of around 3.5 times in the MAX financial covenant have been 4.5 times. And that was a really comfortable position. I think we've talked to you guys about it, and Jim and I have been very consistent as we find a glide path into the low 3s, we can start to take some of this debt paydown that we're doing and move it to share repurchases.

是的。這其實是吉姆所訂定的目標的背景，對嗎？因為這關係到財務彈性。該公司歷史上的淨槓桿部位約為 3.5 倍，而 MAX 財務契約則為 4.5 倍。那是一個非常舒服的位置。我想我們已經和你們討論過這個問題，吉姆和我一直非常一致，因為我們找到了進入低 3 的下滑路徑，我們可以開始償還我們正在做的部分債務，並將其轉移到股票回購。

Now does that mean 18 months out from now, we're having a discussion on you guys are looking like you're getting to 3s. Can you start turning some to share repurchases? I think yes. But let's see the cash flow come in. And let's prove out that we have that pathway into the 3s to be able to meet the target that we have ahead of us. But we're not going to wait until we had a trigger. We can start to be flexible and prioritize our cash flows as we work out.

現在這是否意味著 18 個月後，我們將討論你們看起來將達到 3 分。您可以開始轉向一些股份回購嗎？我想是的。但讓我們看看現金流進來。讓我們證明我們有進入 3 的途徑，能夠實現我們面前的目標。但我們不會等到有觸發因素才採取行動。我們可以開始靈活處理，並在工作時優先考慮我們的現金流。

Got it. Okay. Thank you.

知道了。好的。謝謝。

William Carter with Stifel.

威廉·卡特和斯蒂菲爾。

Hi, thanks. Good morning. So kind of looking through in terms of kind of the promotion where the retailers kind of leaned in this this year to the category. Number one, are you replacing some of that promotion with the incremental this year?

你好，謝謝。早安.因此，我們要仔細研究零售商今年傾向於該類別的促銷活動。第一，今年您是否會用增量促銷來取代部分促銷活動？

And then I guess, do you have the perspective when looking at it if that promotion actually grew the category overall, or was just the customers kind of taking share from each other? Therefore, as that moves back, it's a wash? Thanks.

然後我想，您是否有這樣的觀點：促銷活動是否真正促進了整個品類的成長，或者只是客戶之間從彼此那裡獲取了份額？因此，當它向後移動時，這是一次清洗嗎？謝謝。

So just to be clear, the promotions last year did drive volume, and we're adding incremental promotions this year. So we're increasing our net investment there. We're moving things around a little bit in response to some of the lessons we learned last year, especially with lawns.

需要明確的是，去年的促銷活動確實增加了銷量，今年我們將增加增量促銷活動。因此，我們正在增加在那裡的淨投資。根據去年學到的一些經驗教訓，我們正在對一些事情進行一些調整，特別是在草坪方面。

Lawns is a big focus of ours as we all know that that business has been shrinking, and we have a focused effort to try to turn that around. So I think from that perspective, we feel good about additional market share gains associated, especially with the new listings that will be out. Jim went through them, but an exhaustive list of New OM Scott, the new expanded MGO line, the weed preventer -- we have ortho simple, non-selective weed that we're going out with, that's safe and effective.

草坪是我們關注的重點，因為我們都知道這項業務一直在萎縮，我們正在集中努力扭轉這一局面。因此，我認為從這個角度來看，我們對相關的額外市場份額成長感到滿意，尤其是即將上市的新上市產品。吉姆瀏覽了它們，但是新的 OM Scott、新擴展的 MGO 系列、除草劑的詳盡清單 - 我們有正向簡單、非選擇性的除草劑，我們正在使用它，這是安全有效的。

So, I feel pretty good that we've got an opportunity to gain. Now we won't gain share like we did last year. I think we did take share from others. The market was generally down lawn and garden when you look at it in the context of our fiscal year. And I think we'll continue to do the same. Retailers, I will tell you, are leaning into these promotions. We're getting out earlier. I think the fall POS has been strong. The load-in has been strong. So I think all signals are that we're setting ourselves up for an early start to what we good season.

所以，我感覺很好，我們有機會獲得勝利。現在我們不會像去年那樣獲得份額。我認為我們確實從其他人那裡獲得了份額。當你在我們的財政年度的背景下觀察時，市場普遍處於草坪和花園的下方。我認為我們將繼續這樣做。我會告訴你，零售商正在傾向於這些促銷活動。我們要早點出去。我認為秋季 POS 表現強勁。加載一直很強勁。所以我認為所有的信號都表明我們正在為我們美好的賽季早日開始做好準備。

I don't know, Andrew I'm going to talk and just tag onto that a little bit, which is I hope the message that people are hearing is that we are being absolutely aggressive in attacking this marketplace. And I think that -- it's a very significant attitude change with our young marketeers who run our brands, and I'm really proud of them.

我不知道，安德魯，我要談談，只是稍微強調一下，我希望人們聽到的信息是，我們在攻擊這個市場方面絕對是積極的。我認為，對於經營我們品牌的年輕行銷人員來說，這是一個非常重大的態度轉變，我真的為他們感到自豪。

Combined with a lot more money, they can invest behind their brands combined with programs that are gaining sales opportunities with the retailer that's good for both the retailers and us. And if I'm listening to this, as a competitor, I'm kind of worried that Scotts is going to be a much more dangerous competitor than we have in the past.

加上更多的資金，他們可以投資自己的品牌，並結合一些計劃來獲得零售商的銷售機會，這對零售商和我們都有好處。如果我作為競爭對手聽到這個，我有點擔心斯科特將成為一個比我們過去更危險的競爭對手。

And I think we're coming out of this very challenging period for us with a pretty bad attitude, if you're a competitor of ours. And I'm pretty good about these retail programs because -- it's not just saying we'll give you another 1% of sales or I'm making a number up there. That's not a real number. But we will pay for a menu of opportunities to sell additional products. They're all about it. They're investing at least as much as we are behind these promotions.

我認為，如果你是我們的競爭對手，我們將以非常糟糕的態度走出這個充滿挑戰的時期。我對這些零售計劃非常滿意，因為——這不僅僅是說我們會給你另外 1% 的銷售額或我在那裡賺了一個數字。這不是一個真實的數字。但我們將支付一系列銷售附加產品的機會。他們都是關於它的​​。他們在這些促銷活動上的投資至少與我們一樣多。

They're very committed on our sales -- I'm going to call it programs, but it's kind of a different word, the commitments they're making toward this spring season, there loading earlier than they have, which is also good for us.

他們非常致力於我們的銷售——我將其稱為計劃，但這是一個不同的詞，他們對今年春季的承諾，比他們更早加載，這對我們來說。

So it's one of those things where you look at it, I really like it. And I hope it feels like we're on the move to you guys coming out of a pretty challenging period where we were kind of -- I think we're doing the right things. We invested in our superpowers, but I think that this is a company that was a bit on it heals and we're moving out of that with gusto.

所以這是你看到的那些東西之一，我真的很喜歡它。我希望你們感覺到我們正在走出一個充滿挑戰的時期，我認為我們正在做正確的事。我們投資於我們的超能力，但我認為這是一家有點治癒的公司，我們正在熱情地擺脫這種狀況。

Thanks. I'll pass it on. Thank you.

謝謝。我會把它傳遞下去。謝謝。

Thank you.

謝謝。

Peter Grom with UBS.

瑞銀集團的彼得‧格羅姆。

Thanks, operator, and good morning, everyone. Hope you do it well. I guess two quick ones. So maybe just more on from a housekeeping. So when we think about the 2% core US growth, can you maybe just unpack? Is that just entirely volume growth versus any sort of price? Or are you including M&A in that at this point in time.

謝謝接線員，大家早安。希望你能做好。我猜有兩個快的。所以也許更多的是來自家事服務。因此，當我們考慮美國 2% 的核心成長時，您是否可以解開一下？這完全是銷售成長與價格的對比嗎？或您目前是否將併購納入其中。

Apologies if I missed that. I just want to make sure I have the components correct? And then I guess just on the incremental investment spend. So I think back in July or August, the last time we spoke, it was $25 million. Now I think 40 million or slightly more than 40 million. Can you maybe just unpack where that incremental investment is going?

如果我錯過了，抱歉。我只是想確保我的組件正確？然後我猜只是增量投資支出。所以我記得七月或八月，我們上次談話時，金額為 2500 萬美元。現在我想是4000萬或略多於4000萬。能否解開增量投資的去向？

Where are you focusing more? And then, Jim, just kind of touching on your last point being more dangerous competitor changing how you're thinking about growth. But -- and you clearly are investing more, but the top line guidance isn't really all that different. So maybe you can just kind of connect the dots for me there? Thanks.

你更關注哪裡？然後，吉姆，我想談談你的最後一點，即更危險的競爭對手正在改變你對成長的看法。但是，你顯然正在投入更多資金，但營收指導並沒有真正的不同。那麼也許你可以幫我把這些點連結起來？謝謝。

Yes. I knew this -- like I'll start with the end. I think what we're looking for -- and I'll be -- Matt picked it up and was a little less conservative, and I will be as well. But if you say mid-single digits invoice sales prior to sort of corrections that we're making of non-recurring stuff.

是的。我知道這一點——就像我將從結尾開始。我認為我們正在尋找的東西——我會的——馬特接受了它並且不那麼保守，我也會的。但如果你說在我們對非經常性的東西進行某種更正之前，發票銷售額達到中個位數。

I think that will really help you. And I think this helps you understand that we are getting return on the sales. If you take AeroGarden out and say that's worth 1%, say that the bulk sales we did for inventory reduction, which was part of our plan to sell excess inventory that we had of raw materials. We did that say that's worth 1%.

我認為這真的會對你有幫助。我認為這可以幫助您了解我們正在獲得銷售回報。如果你把 AeroGarden 拿出來並說它值 1%，那就說我們為減少庫存而進行的批量銷售，這是我們出售多餘原材料庫存的計劃的一部分。我們說過這值 1%。

We said more than 1% in pricing. So I don't know what you want to use that, but 1%, 1.5%, I think you're not going to be far off. And that's how you get down to sort of what will show up to you guys is like 0% to 2%. So I think it's actually a pretty fair return.

我們說定價的幅度超過1%。所以我不知道你想用它來做什麼，但 1%、1.5%，我認為你不會太遠。這就是你們如何認真對待你們所看到的 0% 到 2% 的情況。所以我認為這實際上是一個相當公平的回報。

Now we also -- and listen, I guess people's reaction will sort of be a little bit of a vote on how they feel about it. I also feel we're making multiyear investments in our brands and our franchise. And I think that's -- if I'm an investor and look, my family is the largest investor in this company, I think it's a little bit what John Sass said. If you look at Miracle-Gro or you look at Scotts or you look at Roundup, these are hundreds of millions of dollars of brand investments that drive the value of these licenses, these brands, which are licenses to the consumer.

現在我們也——聽著，我想人們的反應有點像是對他們對此的感受進行的投票。我還覺得我們正在對我們的品牌和特許經營權進行多年投資。我認為，如果我是投資者，我的家人是這家公司最大的投資者，我認為這有點像約翰·薩斯所說的那樣。如果你看看 Miracle-Gro、Scotts 或 Roundup，你會發現這些數億美元的品牌投資推動了這些許可證、這些品牌的價值，這些許可證是消費者的許可證。

And so, for where we are in the recovery, moving towards $700 million of EBITDA, 3x leverage. If I can do that without being so concerned that sort of for every dollar we invest in our brand support and innovation work and our other superpowers that I get all of it back today I think it's a good investment. And if I'm an investor, I feel that's a proper use of the money, if I can both make my financial commitments reasonably at the same time investing in a franchise that I think if you look at this business, and it's another one of those things I was trying to communicate in the script.

因此，就我們所處的復甦階段而言，EBITDA 有望達到 7 億美元，槓桿率為 3 倍。如果我能做到這一點，而不必擔心我們在品牌支援和創新工作以及其他超級大國上投入的每一美元，今天我都能收回來，我認為這是一項很好的投資。如果我是投資者，我覺得這是對這筆錢的正確使用，如果我能夠在投資特許經營權的同時合理地做出我的財務承諾，我認為如果你看看這個業務，它是另一個我試圖在劇本中傳達的東西。

I hope I was successful at it, that The Scotts Miracle-Gro Company is an extremely rare consumer franchise. Lawn and Garden is a really good category. It's healthy. We are wicked dominant in this space, and we're going to grow that, and we're not being attacked by, really, I actually don't want to super get on this. I was having a conversation with Donald Trump a week and a half ago, and he asked, who are your competitors? And I basically said, private label.

我希望我能成功，因為 Scotts Miracle-Gro Company 是一家極為罕見的消費者特許經營公司。草坪和花園是一個非常好的類別。它很健康。我們在這個領域佔據著邪惡的主導地位，我們將發展這個領域，而且我們不會受到攻擊，真的，我實際上不想超級參與這個領域。一周半前我與唐納德·川普交談，他問，你的競爭對手是誰？我基本上說的是自有品牌。

And so I think investing in this franchise responsibly, where we're balancing our financial output with the long-term value of this franchise is a good investment, and that's kind of how I'd answer it. I don't know if that works.

所以我認為負責任地投資這個特許經營權，平衡我們的財務產出和這個特許經營權的長期價值是一項很好的投資，這就是我的回答。我不知道這是否有效。

And I can add a little color to it, which is if you look at that net increase in investment, roughly 75% to 80% of it is going directly to brand support this year that will drive volume and bring people into the stores. And this has been a topic of discussion amongst Matt and Jim and I.

我可以添加一點顏色，如果你看看投資的淨增長，今年大約 75% 到 80% 的投資將直接用於品牌支持，這將推動銷量並吸引人們進入商店。這一直是我和馬特、吉姆討論的話題。

We're also using that last 20% to 25% to start building the midterm capacity, whether it's consumer experience around revamping our websites, D2C, retailer.com, R&D investment in new actives, et cetera. So I think it's balanced, it's righteous, and it's part of the multi-year growth plan.

我們也利用最後 20% 到 25% 的資金來開始建立中期能力，無論是圍繞著改進我們的網站、D2C、retailer.com 的消費者體驗、新活性物質的研發投資等等。所以我認為這是平衡的、正義的，也是多年成長計畫的一部分。

No, come on, come on. Throw something in there, Matt. I just think that, I hope people, we're pretty fanatical about this here, that if we can do both, please our shareholders with return on this business and this recovery, balance it with license to grow. I don't know.

不，來吧，來吧。馬特，往裡面丟點東西。我只是認為，我希望大家，我們對此非常狂熱，如果我們能做到這兩點，就可以透過這項業務和復甦的回報來取悅我們的股東，並在其與成長許可之間取得平衡。我不知道。

Okay, here's what was happening. I have a bad brother face and it's hard for me to hide it, right, which is we walked this fine line with you all. And I think over the last two years, we've proven out that we are going to make the right decisions for the generational health of The Scotts Miracle-Gro consumer. And yes, there were legacy investments that we were getting out.

好吧，這就是發生的事情。我有一張壞兄弟的臉，我很難隱藏它，對吧，這就是我們和你們一起走這條路。我認為在過去的兩年裡，我們已經證明我們將為 Scotts Miracle-Gro 消費者的世代健康做出正確的決定。是的，我們正在退出一些遺留投資。

There were cashflow issues that we were having. There was an over leveraged position that we had. We are now signaling today that we feel better about the steps forward. This guidance for all the questions that sit out there kind of says, and we said it in our scripts, it's conservative, which by the way, and this goes to all of our investors, you asked us to do.

我們遇到了現金流問題。我們的槓桿部位過高。今天我們發出信號，表明我們對所取得的進展感覺更好了。這個針對所有問題的指南有點保守，我們在腳本中也說過，這是保守的，順便說一句，這也適用於我們所有的投資者，這是你們要求我們做的。

And so this is prudent steps to provide you with a path to numbers that secure our future. What does that mean? Growing US consumer. Okay, I have some baseline adjustments that net to zero. I got it. Hawthorne, the amount of steps that we've made in Hawthorne to go from a loss of [50 million] to break even this year to plus $20 million, by the way, with revenue falling by half, prudent steps.

因此，這是謹慎的步驟，為您提供一條通往數位的道路，以確保我們的未來。這意味著什麼？不斷增長的美國消費者。好的，我有一些基線調整，淨值為零。我得到了它。霍桑，我們在霍桑採取了多少步驟，從今年的虧損 [5000 萬] 達到盈虧平衡，到增加 2000 萬美元，順便說一句，收入下降了一半，這是謹慎的步驟。

And that leads the groundwork for a more profitable Hawthorne moving forward. These investments in what we've done and gaining gross margin over the past couple of years, we're going to deliver 30% gross margin this year, which I feel extremely powerful about near 30, let's say, because Jim just corrected me. What does that mean? It means we have the power to make investments in the brand.

這為 Hawthorne 未來實現更有利可圖的發展奠定了基礎。我們在過去幾年中所做的這些投資並獲得了毛利率，今年我們將實現 30% 的毛利率，我覺得接近 30% 非常強大，比方說，因為吉姆剛剛糾正了我。這意味著什麼？這意味著我們有能力對品牌進行投資。

So that $25 million, Peter, that we were talking about, bumping that up to $40 million, that's the power that we have. And from a P&L perspective, it's good. And yielding 570 to 590 of EBITDA on a conservative basis, because again, there are unknowns as we move into the year.

因此，彼得，我們正在談論的 2500 萬美元，將其提高到 4000 萬美元，這就是我們擁有的力量。從損益表的角度來看，這很好。保守地說，我們的 EBITDA 為 570 至 590，因為同樣，進入這一年，仍有未知因素。

And I am being a little bit on the edge here to say I feel better about performing against that guidance than I have in my last two years here, because we have taken the right prudent steps to ensure that you have clarity that we are making the right decisions for the future. Because by the way, outside of this call, the vast majority of the conversations are, how can you get from 30 to 35? How can you get from 3.5 billion to 5 billion? That requires these growth investments, and they don't all pay off this year. And that's okay.

我在這裡有點緊張地說，與過去兩年相比，我對遵守該指導方針的表現感覺更好，因為我們已經採取了正確的審慎步驟，以確保您清楚我們正在製定對未來的正確決定。因為順便說一句，除了這通電話之外，絕大多數的對話都是，你怎麼能從 30 到 35？如何從35億到50億？這需要這些成長投資，但今年這些投資並沒有全部得到回報。沒關係。

Got it. Thanks so much for that. I'll pass it on.

知道了。非常感謝。我會把它傳遞下去。

Chris Carey with Wells Fargo Securities.

富國銀行證券公司的克里斯凱裡。

Hi, guys. Good morning. Just one quick modeling question, then a follow-up. What is the year-over-year impact on EBITDA from changes from paying people more in stock to paying people more in cash? Can you comment on that? And I can expand if that doesn't make sense. But I understand there was more use of stock comp in fiscal '24, and presumably there will be less use of stock comp and more use of cash in fiscal 25. What's the year-over-year dynamic with EBITDA on that item specifically?

嗨，大家好。早安.只是一個快速建模問題，然後是後續問題。從向人們支付更多的股票到向人們支付更多的現金的變化對 EBITDA 的同比影響是什麼？你能對此發表評論嗎？如果這沒有意義，我可以擴展。但據我了解，24 財年更多地使用了股票補償，並且大概 25 財年將減少使用股票補償，更多地使用現金。該專案的 EBITDA 年比動態如何？

So, the add-backs that we guided you to on EBITDA are equal to what they were last year. And so what's happening from an incentives program, we are going to continue to use equity similar to what we did in '24. If we outperform, and Jim laid out some targets about how we can outperform, we will flip that to cash. And so within that guidance that we are giving is a provision for some incentive comp in cash which doesn't get added back to EBITDA.

因此，我們指導您的 EBITDA 回加額與去年相同。因此，激勵計劃中發生的情況是，我們將繼續使用類似於 24 年所做的股權。如果我們跑贏大盤，而吉姆制定了一些關於我們如何跑贏大盤的目標，我們將把它變成現金。因此，在我們提供的指導中，我們提供了一些現金激勵補償，但這些獎勵不會加回 EBITDA 中。

Okay, so it's clean.

好吧，這樣就乾淨了。

Go ahead. Correct.

前進。正確的。

I guess it's clean at target. I guess that's what you're saying. I think the Board and leadership want to get back to paying people with US dollars. And so if you look at our internal numbers that exceed what we're telling you guys, anything over target would be paid as normal in cash. So the up-to-target director and above, which is fairly high-ranked here, is in equity. Above that would be in cash. And the board and leadership want to get back to moving away from using equity for incentive.

我想目標已經乾淨了。我想這就是你所說的。我認為董事會和領導層希望重新以美元支付工資。因此，如果您查看我們的內部數字超出了我們告訴您的數字，任何超出目標的內容都將正常以現金支付。因此，達到目標的董事及以上級別，在這裡排名相當高，是有股權的。以上就是現金。董事會和領導階層希望重新放棄使用股權激勵的做法。

And Chris, can I also just use this as one quick opportunity just to make sure that we all look at the baseline of 24 the same? I'm not sure if it's lost in the noise of all that is taking place. I think this is one of Jim's fears in how we laid out the financials.

克里斯，我是否也可以將此作為一個快速機會，以確保我們都以相同的方式看待 24 的基線？我不確定它是否消失在正在發生的一切噪音中。我認為這是吉姆對我們如何制定財務狀況的擔憂之一。

But baseline, my view, 340 basis points of gross margin gain, '23 to '24, EBITDA of $539 million in '24, which was a 20% increase year over year.

但我認為，從 23 年到 24 年，基線毛利率成長了 340 個基點，24 年的 EBITDA 為 5.39 億美元，年成長 20%。

So just want to make sure that that's how it shows up in the financials. Obviously, when we write inventories off, those go through the P&L. You just can't adjust it out in the financials. So want to make sure we're all looking at it the same way.

所以只是想確保這就是它在財務報表中的顯示方式。顯然，當我們沖銷庫存時，這些庫存會進入損益表。你只是無法在財務方面進行調整。所以要確保我們都以同樣的方式看待它。

Thank you for allowing me to do that.

感謝您允許我這樣做。

Yeah, of course. Chris, on Hawthorne, there has been obviously real challenges in calling the top line for the business. What if revenue comes in worse or materially worse? And I'm not saying that's going to happen, but such is the volatility in that category. What is your visibility on the profitability outlook for that business for different swings in revenue? That's it. Thanks.

是的，當然。克里斯，關於霍桑，顯然在為業務打電話時面臨著真正的挑戰。如果收入惡化或實質惡化怎麼辦？我並不是說這種情況會發生，但這就是該類別的波動性。您對該業務在不同收入波動下的獲利前景有何看法？就是這樣。謝謝。

I would say it's really good. You know, the operating team, this would be Chris, Tom Crabtree, and the rest of the guys and ladies that are running that business are extremely competent. The idea of a revenue meltdown at this point, I think, is I suppose anything is possible, but I think the possibility of that is pretty low. I think they're managing actually more upside at the moment than they are downside risk.

我想說這真的很好。你知道，營運團隊是克里斯（Chris）、湯姆·克拉布特里（Tom Crabtree），以及經營這項業務的其他男女都非常有能力。我認為，目前收入崩潰的想法是，我認為一切皆有可能，但我認為這種可能性非常低。我認為他們目前管理的上行風險實際上多於下行風險。

And remember, I'm not sure it's within the marketing, but they came back to us and said, you know, we can earn $30 million next year, okay? Remember, I told you guys $20 million. We looked at them and said, you know, okay, great, but are you spending the money you need to spend behind your brands and driving your business, or has that been kind of strangled out of your business through these hard times? And the answer was yes.

請記住，我不確定這是否屬於行銷範圍，但他們回來告訴我們，你知道，我們明年可以賺 3000 萬美元，好嗎？請記住，我告訴過你們 2000 萬美元。我們看著他們說，你知道，好吧，很好，但是你是否在花你需要花的錢來支持你的品牌並推動你的業務，或者在這些困難時期這些錢是否被扼殺在你的業務之外？答案是肯定的。

So Matt and I made the decision to tell them it's $20 million. You take $10 million for driving your business. So, I think that the risk in there is pretty low. Not only are they very tight with what their numbers are, and I think a lot of that disappointment over the last few years is already baked into our sales numbers. But if you look at what they're doing right now, I think they're actually very successfully selling their product lines.

所以馬特和我決定告訴他們這是 2000 萬美元。您花費 1000 萬美元來推動您的業務。所以，我認為那裡的風險很低。他們不僅對自己的數字非常嚴格，而且我認為過去幾年的許多失望已經融入我們的銷售數字中。但如果你看看他們現在在做什麼，我認為他們實際上非常成功地銷售他們的產品線。

Hi, Chris. It's Chris. Yes, I mean, look, echoing what Jim said, I think we've got a fair amount of -- I would say sort of our revenue and earnings numbers, I would call them kind of risk-adjusted already. Look, if things get bad, and one thing we know about cannabis is there is the potential for significant volatility, both good and bad, we do have contingencies that we can break glass in case of emergency that are not dipping into that brand spending that Jim mentioned, because I do believe that's necessary.

嗨，克里斯。是克里斯。是的，我的意思是，聽著，呼應吉姆所說的，我認為我們已經有相當多的收入和盈利數據，我會稱它們已經經過風險調整。聽著，如果情況變得糟糕，我們對大麻了解的一件事是，大麻有可能出現大幅波動，無論好壞，我們確實有意外情況，我們可以在緊急情況下打碎玻璃，但不會影響到品牌支出吉姆提到，因為我確實認為這是必要的。

So we've got moves we can make here over the course of the second and third quarters if we need to. I don't anticipate that, as Jim mentioned. Tom and the team are doing a heck of a job managing. We've got really great support from our retailers, from the distribution partners we brought on. I feel reasonably good about it. But we do have some downside contingencies if needed.

因此，如果需要的話，我們可以在第二季和第三季採取行動。正如吉姆所提到的，我預計不會發生這種情況。湯姆和他的團隊正在做大量的管理工作。我們得到了零售商和我們引入的分銷合作夥伴的大力支持。我對此感覺相當好。但如果需要的話，我們確實有一些不利的意外情況。

Yeah, I want to throw out just, we can look at the election results and we can sort of be disappointed and recreational in Florida. I just want to remind everybody that this was an election cycle where we had both presidential candidates wanting to fix the laws that have been really hindering this business.

是的，我想拋出的是，我們可以看看選舉結果，我們可以在佛羅裡達州感到失望和娛樂。我只是想提醒大家，在這個選舉週期中，我們的兩位總統候選人都希望修改那些真正阻礙這個產業的法律。

And, the biggest surprise was Donald Trump saying he was going to vote for Proposition 3 in Florida, that he supported rescheduling, that he supported Safer Banking. And he's been elected. The process is underway with DEA to begin that process of rescheduling. And I'm hopeful the president and the vice president continue to pressure DEA to get this done.

而且，最令人驚訝的是唐納德·川普表示他將在佛羅裡達州投票支持第 3 號提案，他支持重新安排時間，他支持更安全的銀行業務。他已經當選了。美國緝毒局 (DEA) 正在著手重新安排時間。我希望總統和副總統繼續向緝毒局施壓，以完成這項工作。

But if you say we have, whoever won this election, we had a president that was supportive of this business in solving the tax issues and the banking issues, and one of them has been elected. This is a really good thing for this industry and our customers. And I think it's a major reflection point in this election cycle is two presidential candidates, both of whom supported this change. And that's going to be good for us. It's hard to see that being bad.

但如果你說我們有，無論誰贏得了這次選舉，我們都有一位支持該行業解決稅收問題和銀行問題的總統，其中一位已經被選中。對於這個行業和我們的客戶來說，這確實是一件好事。我認為這次選舉週期的一個主要反思點是兩位總統候選人，他們都支持這項變革。這對我們有好處。很難看出那是壞事。

Eric Bouchard with Cleveland Research & Co.

克利夫蘭研究公司的艾瑞克‧布沙爾 (Eric Bouchard)

Thank you. Good morning. Just one question, I'm trying to get clarity on what you're outlining, a path to growth, getting the gross margin to 35%. And I'm trying to square that with the difficulty in raising price and your comments of hard to raise price.

謝謝。早安.只是一個問題，我試著弄清楚你所概述的內容，一條成長之路，使毛利率達到 35%。我正在嘗試將其與提價的困難以及您關於提價困難的評論聯繫起來。

It does feel like there's some changes or traction with private label. And it's pretty clear that the long category continues to see pressure. And so, what's the path through those limiting factors that were in place in '24 seem like they're in place in '25? How do you navigate that path?

感覺自有品牌確實有一些變化或吸引力。很明顯，長類別繼續面臨壓力。那麼，24 年出現的那些限制因素在 25 年出現的情況如何？你如何駕馭這條路？

Well, I got to say, like, there's people who are smarter on this than I am in this room, and they can answer that. I'm not seeing any share slippage, okay? What happened in private label, I just want to be super clear because I've been reading your work on it. And so, this will help illuminate it. When we bid for private label and it's real low margin, like near zero, if people want to underbid us and we don't see a strategic reason to be in it, they can have it.

好吧，我必須說，在這個房間裡有人比我更聰明，他們可以回答這個問題。我沒有看到任何股價下滑，好嗎？自有品牌發生了什麼，我只想說得非常清楚，因為我一直在閱讀你的相關著作。因此，這將有助於闡明它。當我們競標自有品牌時，利潤率確實很低，幾乎為零，如果人們想要低於我們的出價，而我們沒有看到參與其中的策略理由，他們可以擁有它。

And, I think we're being careful on private label. I don't see the effect of, I went down, I was visiting with one of our biggest retailers and said, you know, what the hell on this? And I put this in the, just saying, why are you giving someone else business we had, even though we had sort of drawn a line on it.

而且，我認為我們對自有品牌非常謹慎。我沒有看到這樣的效果，我去拜訪了我們最大的零售商之一，然後說，你知道，這到底是怎麼回事？我只是說，為什麼你要把我們的業務交給別人，儘管我們已經劃清了界線。

And what I was told was that this came from up high, all the way from the top over only private label and diversifying the vendor base and private label, that this was not directed at the branded side. So, we just completely do not read that this is a lack of commitment to the branded business or the idea that Scotts is getting too big with our retailers. In fact, we're becoming bigger with them on where there's margin business.

我被告知，這是來自高層的，自上而下的，只有自有品牌，並使供應商基礎和自有品牌多樣化，這並不是針對品牌方面的。因此，我們完全不認為這是缺乏對品牌業務的承諾，或者是斯科特對我們的零售商的影​​響太大了。事實上，我們正​​在與他們一起在保證金業務方面做得更大。

I don't see that, I think if you say and you listen to what we're saying, just north of 1% pricing, half of $150 million, so-called $75 million coming back in margin. That's awesome. Thank you, Nate and team. And incremental sales opportunities that will drive volume and absorption plus looking internally to say, okay, where we need to pick up a percent or so, we can do that internally.

我不認為這一點，我想如果你說並且聽聽我們所說的話，就在 1% 的定價之上，即 1.5 億美元的一半，即所謂的 7500 萬美元的利潤率。太棒了。謝謝內特和團隊。增量銷售機會將推動銷售和吸收，並在內部尋找，好吧，如果我們需要增加百分之左右的利潤，我們可以在內部做到這一點。

This is not something new for us. We've cut $400 million of annual expenses out of this company without affecting our go-to-market strategy. And we can do more. And I'm not sure it would be high on my list to have to tell the company we got more work to do, but I made a change in leadership. We are looking at how this enterprise operates in a go-forward view that says we can operate this company cheaper and we're going to.

這對我們來說不是什麼新鮮事。我們已經削減了這家公司 4 億美元的年度開支，但並未影響我們的上市策略。我們還可以做得更多。我不確定告訴公司我們還有更多工作要做，這是否是我的首要任務，但我對領導階層進行了調整。我們正在以前瞻性的視角來研究這家企業的運作方式，即我們可以以更便宜的成本經營這家公司，而且我們將會這麼做。

And we're going to look at anything that gets in the way of our warfighting capacity. And we're going to look to cut that where we can and invest even more in our capacity to war fight. And I would challenge my team here to say, are you guys concerned we get back to [35%] (corrected by company after the call)? And there's no one raising their hand and saying, I want to go home. So I'm very confident we can get where we need to get to.

我們將關注任何妨礙我們作戰能力的因素。我們將盡可能削減開支，並在我們的作戰能力上進行​​更多投資。我想在這裡挑戰我的團隊說，你們擔心我們會回到[35%]（電話後公司更正）？沒有人舉手說，我想回家。所以我非常有信心我們能夠到達我們需要到達的地方。

A key piece of this, though, their launch point for 25, let's just say. We're saying we got pricing. We got pricing on selective SKUs that we wanted to get. We've chosen to make some reinvestments in promo activity, which offsets that. And listing activity and getting positions that we want. This is the prudent work that we're doing.

不過，我們可以說，其中一個關鍵的部分是他們的 25 的發射點。我們說我們有定價。我們得到了我們想要的選擇性 SKU 的定價。我們選擇對促銷活動進行一些再投資，從而抵消了這種影響。並列出我們想要的活動並獲得職位。這是我們正在做的審慎工作。

But it's one step higher, actually, Eric. Let me also answer something I think you might have in there. Launch point 24 to 25. At mid-single-digit volume POS that we're talking about, like we said, you have a third of non-repeat kind of sales. You have a third of investments that we and retailers are making. And then you have a third of what we're going to call an inventory load in 24 that gets us to the right level that won't repeat in 25.

但實際上，這更高了一步，艾瑞克。讓我也回答一些我認為你可能有的問題。發射點 24 至 25。正如我們所說，在我們談論的中等個位數銷售的 POS 中，您有三分之一的非重複銷售。您擁有我們和零售商正在進行的投資的三分之一。然後，我們將在 24 小時內獲得我們所說的庫存負載的三分之一，這將使我們達到正確的水平，並且在 25 年內不會重複。

And it's just a percentage point or two of additional sales. And that gets you from mid-single-digits growth this year down to flat. But within that, remember, pricing happening. That will continue. Share continuing and growing. And we will maintain that.

這只是額外銷售額的一兩個百分點。這將使今年的中位數個位數成長降至持平。但請記住，定價是在其中發生的。這將繼續下去。分享持續不斷、不斷成長。我們將維持這一點。

And then innovation, all the things that Nate has laid out as important to the future of the US. consumer business, we are acting on. And so that lays what we think is a really nice ramp to get to that 2% to 3% algorithm of growth once you unshield all of these one-timers and things like that. M&A not necessarily in the purview right now.

然後是創新，內特提出的所有這些對美國的未來都很重要。消費業務，我們正在行動。因此，一旦你解除所有這些一次性和類似的事情，我們認為這是一個非常好的斜坡，可以達到 2% 到 3% 的成長演算法。併購目前不一定屬於其權力範圍。

Jim spoke about it. We have a pipeline. We're working it. That's that 1% incremental growth that we'll get. But the core innovation pieces, we told you they were going to take time to layer into the algorithm, and they are. But we feel good about growing that top line going forward. I think it's just this wonky for 25 comp that we're going to have to work through.

吉姆談到了這件事。我們有一條管道。我們正在努力。這就是我們將獲得的 1% 的增量成長。但核心創新部分，我們告訴過你，它們將需要時間來分層到演算法中，而確實如此。但我們對未來營收的成長感到滿意。我認為對於 25 人來說，我們必須解決這個問題。

Yeah, and Eric, this is Nate. I'll give you my thoughts on private label. There are puts and takes every year. And while Jim said it right, we never like to lose any business. That little piece of business wasn't for us. It's not very big. But the discussions that Josh and I are having with retailers, we're talking about opportunities in '26-'27.

是的，艾瑞克，這是內特。我會告訴你我對自有品牌的想法。每年都有投入和拿取。雖然吉姆說得對，但我們從不想失去任何生意。那個小生意不適合我們。它不是很大。但喬許和我與零售商進行的討論，我們談論的是 26-27 年的機會。

So, I look at it as a continuum of puts and takes. But remember, our focus is on growing margin, and some of these decisions, while tough, or decisions we make in terms of how we bid for things reflect that. Lawns I want to talk about. You asked about lawns and the pressure. We 100% see that. And John Sass in his prepared remarks talked about our message of getting back.

因此，我將其視為投入和獲取的連續體。但請記住，我們的重點是增加利潤，其中一些決定雖然艱難，但我們在競標方式上所做的決定反映了這一點。我想談談草坪。您詢問了草坪和壓力。我們100%看到了這一點。約翰·薩斯在他準備好的演講中談到了我們返回的信息。

You know, we've been focused on product, right? Last year was Healthy. We've talked about Halts, Turf Builder. We're now going to get back to talking about multi-step and how to help consumers take care of their lawns. So a lot of the investment on the brand and media side, both for lawns and for gardens, is on feeding.

你知道，我們一直專注於產品，對吧？去年是健康的一年。我們已經討論過停止、草皮建造者。我們現在將回到討論多步驟以及如何幫助消費者照顧他們的草坪。因此，品牌和媒體方面的大量投資（無論是草坪還是花園）都花在了餵食上。

We are not happy with the performance of either plant food or lawn food. And that is going to be a big part of how we talk about it. Now, that's sort of a Band-Aid. We've now got to get our sort of digital lawns program up to speed to engage more consumers in the ways that they shop. And as I mentioned earlier, the mid-to long-term investments and new AIs that we can bring to bear sort of for the fertilizer of the future.

我們對植物性食物或草坪食物的表現都不滿意。這將成為我們談論它的一個重要部分。現在，這有點像是創可貼。我們現在必須加快我們的數位草坪計劃，以吸引更多消費者的購物方式。正如我之前提到的，我們可以為未來提供中長期投資和新的人工智慧。

And I'm talking about stuff that goes from not only just changing traditional chemistries, but starting to look at biologicals, because Big Ag is doing a lot of work there. So just to put it in context, I think you're right on lawns, but I feel good about the plan we have this years, and I feel really good about sort of the mid-to long-term view as we try to turn that business around.

我所說的不僅僅是改變傳統化學，而是開始專注於生物製品，因為大型農業公司正在那裡做很多工作。因此，就具體情況而言，我認為你在草坪上的說法是正確的，但我對我們今年的計劃感覺良好，而且當我們試圖扭轉局面時，我對中長期觀點感到非常滿意周圍的那個生意。

Eric, I try to , de-confuse folks about kind of partly what happened in lawns this years. This is very much a Midwest-Northeast business. I don't know, like I think between the two regions, it's nearly 70% of the business.

艾瑞克，我試著讓人們了解今年草坪上發生的部分事情。這在很大程度上是中西部和東北部的業務。我不知道，就像我認為的那樣，這兩個地區的業務量接近 70%。

The weather for all of us who live in the Northeast was really bad. All the POS data, I'm sure you're looking at it, kind of showed the market to be pretty significantly down. And our lawns business is very much concentrated there, and it's very much in sort of a few weeks in the core of when the weather was poor. If you look at the fall season, the business is doing really well.

對我們東北人來說，天氣真的很糟。我相信您正在查看所有 POS 數據，這些數據都表明市場大幅下跌。我們的草坪業務非常集中在那裡，而且主要集中在天氣惡劣的幾週內。如果你看看秋季，你會發現生意做得非常好。

And, when everybody's trying to figure out what's going on with lawns in the spring, and they don't want to get yelled at saying it's just weather, and then they say, what's happening in the spring? What's changed? Part of it is, to look outside. It was really dry. Lawns got pre-baked, with long periods of no rain. People felt they needed to put seed down.

而且，當每個人都試圖弄清楚春天草坪發生了什麼事時，他們不想被大喊大叫說這只是天氣，然後他們說，春天發生了什麼？發生了什麼變化？一部分是向外看。真的很乾。草坪已經提前烘烤，並且已經很長時間沒有下雨了。人們覺得他們需要放下種子。

They needed to put fertilizer down. And they did, and the POS looks really great. And it's one of those things where, we got feeling pretty bad about the lawns business, and then the fall happened, and everybody's like -- that looks much better. I don't know. Josh Meihls is here who is our Head of Sales. How did the fall feel?

他們需要放下肥料。他們確實這麼做了，而且 POS 看起來真的很棒。其中之一是，我們對草坪業務感覺非常糟糕，然後秋天發生了，每個人都覺得——看起來好多了。我不知道。喬許·梅爾斯 (Josh Meihls) 是我們的銷售主管。秋天的感覺如何？

The fall really turned around. So we saw the key lines in the fall. You talk about WinterGuard, our sell-through rate on that.

秋天真的扭轉了。所以我們看到了秋季的關鍵線路。你談到了 WinterGuard，我們的銷售率。

We've already surpassed last year at this point, when we did all of last year, and we could see continued momentum into October. Craft feed of almost double digits over that time. The Northeast and Midwest, to your point, really driving those results, which we haven't seen all season long. So we're seeing consumers respond to the need. We're seeing retailers really lean in promotionally.

到目前為止，我們已經超越了去年，去年全年我們都做到了這一點，我們可以看到十月份的持續勢頭。在那段時間裡，工藝飼料幾乎達到兩位數。就你而言，東北部和中西部確實推動了這些結果，但我們整個賽季都沒有看到這樣的結果。所以我們看到消費者對需求做出反應。我們看到零售商確實在促銷方面投入了精力。

And we expect that to continue into the spring. What we typically see when we have fall damage like this, not all consumers take advantage of it in the fall. They wait until the spring. So we expect big things in the spring. Our retailers see the same. So, we're pretty darn bullish when it comes to next spring.

我們預計這種情況將持續到春季。當我們遇到這樣的墜落損壞時，我們通常會看到這樣的情況，但並非所有消費者都會在秋季利用它。他們等到春天。所以我們期待春天有大事發生。我們的零售商也有同樣的看法。因此，我們對明年春天非常樂觀。

Okay. Thank you.

好的。謝謝。

William Reuter with Bank of America.

美國銀行的威廉·路透。

Good morning. My question is on input costs and your outlook there and how maybe that may be contributing to some of the gross margin expansion this year. It looks like urea is down a good bit. Transportation, I don't know, maybe it'll be flattish. But how are those going to be on a year-over-year basis in totality? And then how much hedging have you put in place at this point?

早安.我的問題是關於投入成本和你們的前景，以及這可能如何促進今年毛利率的成長。看來尿素下降了不少。交通，我不知道，也許會很平坦。但這些總體上是年比情況如何？那麼此時您採取了多少避險措施？

The walk from the [27% to around 30%] (corrected by company after the call), that we've been talking about, like I said, in my prepared remarks is mostly supply chain driven. Within that supply chain category, what we've talked to you about is the benefit that we would be seeing in '25 from those lower prices. And that benefit is roughly a third of that overall supply chain savings, which, again, is the biggest piece there.

正如我在準備好的演講中所說，我們一直在談論的從 [27% 到 30% 左右]（由公司在電話會議後更正）的轉變主要是供應鏈驅動的。在供應鏈類別中，我們與您討論的是我們將在 25 年從較低的價格中看到的好處。這項效益約佔整個供應鏈節省的三分之一，這也是其中最大的一部分。

So you are seeing those raw material costs, and that's the full basket roll through into the cost structure '24 to '25. As you look at hedging, the one that I think we talk about the most is urea. And at this point in the year, we're 60%, 70% hedged for '25.

因此，您會看到這些原材料成本，這是 24 至 25 年成本結構的全部成本。當你看到對沖時，我認為我們談論最多的是尿素。今年的這個時候，我們 60%、70% 的資產都針對 25 年進行了避險。

And if you look at the hedge price year-over-year, it's down kind of $200. So that price flowing through locked in and real, but that goes through the rest of the cost structure. We have seen some areas where resins are up year-over-year, diesel fuel spiking around a little bit. We've made advances in our purchased energy, so we feel good about that.

如果你看一下對沖價格，你會發現它比去年同期下降了 200 美元。因此，價格流動是鎖定的和真實的，但這會貫穿成本結構的其餘部分。我們看到一些地區樹脂價格較去年同期上漲，柴油價格略有上漲。我們在購買能源方面取得了進步，因此我們對此感到滿意。

And by the way, locked in those prices by and large. So overall, on the inflationary basket or the moving volatile basket of commodity factors, feel good near locked in. And then as we've said time and time again here in this call, everything that Nate, Dave Swihart, and the team are doing on the supply chain side, that had been basically orchestrated through springboard and now being realized underlies the rest of that climb out on the gross margin.

順便說一句，總體上鎖定了這些價格。因此，總體而言，對於通膨籃子或波動性大宗商品籃子因素，感覺良好接近鎖定。正如我們在這次電話會議中一次又一次所說的那樣，Nate、Dave Swihart 和團隊在供應鏈方面所做的一切基本上都是透過跳板精心策劃的，現在正在實現，這是其餘部分的基礎毛利率攀升。

Yeah, and the only comment I'll add to that is, if you look at commodity prices, they're, I would say, flattening and starting to rise. But as Matt said, we're probably 70% locked on urea and north of 50% on all our commodities.

是的，我要補充的唯一評論是，如果你看看大宗商品價格，我會說它們正在趨平並開始上漲。但正如馬特所說，我們可能 70% 鎖定尿素，50% 以上鎖定所有商品。

So we feel good about our position for '25, and we'll continue to manage those appropriately. But we have other levers in our supply chain savings, network optimization, warehouse automation, all the stuff that Jim talked about in his repair group remarks.

因此，我們對 25 年的處境感到滿意，我們將繼續適當地管理這些。但我們在供應鏈節約、網路優化、倉庫自動化以及吉姆在維修小組演講中談到的所有內容方面還有其他槓桿。

And we laid out to them in July.

我們在七月向他們佈局。

Yeah, we talked about that. So we have levers. I feel good about where we are for '25 with commodities right now.

是的，我們討論過這個。所以我們有槓桿。我對 25 年商品目前的狀況感到滿意。

Great. And then just one quick one. On the third quarter call, I think Jim had mentioned potentially moving towards a 3 times leverage target. In an earlier question today, there was talking about when you would return to share repurchases relative to debt reduction. Is the official leverage target 3.5 times, or is it 3 times, or do you not really have one that's that explicit at this point?

偉大的。然後只是一個快速的。在第三季的電話會議上，我認為吉姆提到了可能朝著 3 倍槓桿目標邁進。在今天早些時候的一個問題中，有人談到何時會回歸相對於債務削減的股票回購。官方槓桿目標是3.5倍，還是3倍，還是你們目前還沒有那麼明確的槓桿目標？

Well, Matt wants to get upset when you say we have no plan, and we're just sort of winging it. Well, I would say, unfortunately, that's probably a little true. Here's my view, and I think this is Matt's view as well, is that we were pretty happy living in a world of 3.5 times to 3.75 times leverage before we went through this shitstorm. I think our view is that a little more conservatism probably would be appreciated by our lenders and our shareholders and our own selves.

好吧，當你說我們沒有計劃，我們只是即興發揮時，馬特會感到不安。嗯，不幸的是，我想說，這可能有點正確。這是我的觀點，我認為這也是馬特的觀點，那就是，在經歷這場狗屎風暴之前，我們很高興生活在一個槓桿率為 3.5 倍到 3.75 倍的世界。我認為我們的觀點是，我們的貸款人、我們的股東以及我們自己可能會欣賞更多一點的保守主義。

So I think that leverage target is lower than it was. And I think Matt and I would probably agree that 3 times is a real safe place for us and kind of a sweet spot. I think part of it's going to say, as we go out and renegotiate sort of our credit, what do our lenders and bondholders say when they price stuff out?

所以我認為槓桿目標比以前低。我想馬特和我可能會同意 3 times 對我們來說是一個真正安全的地方，也是一個甜蜜的地方。我認為其中一部分會說，當我們出去重新談判我們的信貸時，我們的貸方和債券持有人在定價時會說什麼？

But I think people might say, a little more conservative than you guys have been in the past would be a good thing. Because remember, we didn't see back when everything blew up, we never saw a number in any planning we did that went above 4times.

但我想人們可能會說，比你們過去保守一點是件好事。因為請記住，當一切都爆炸時，我們沒有看到回頭，我們在我們所做的任何計劃中都沒有看到超過 4 倍的數字。

And we know what happened. So I think a little conservatism now, as those numbers get better, I can speak for what I think my oldest sister, who's Chairman of the limited partnership, would say is, getting back to shareholder friendly would be good. And so there would probably be pressure as we approach three to say, can you guys balance this out?

我們知道發生了什麼事。因此，我認為現在有點保守，隨著這些數字變得更好，我可以代表我的大姐姐（有限合夥董事長）所說的，回到股東友好的狀態會很好。因此，當我們接近三個時，可能會有壓力說，你們能平衡這一點嗎？

But I don't think we have a firm target. I think the target we have, and this gets back to, how did we get to $700 million? Or how did I get there? How does that reflect with our leverage targets? They go together. I think $700 million of EBITDA is going to sort of get you right about at 3 times.

但我認為我們沒有明確的目標。我認為我們的目標是，我們是如何達到 7 億美元的？還是我是怎麼到達那裡的？這如何反映在我們的槓桿目標上？他們一起去。我認為 7 億美元的 EBITDA 大約相當於 3 倍。

And those are our targets by '27 that are now committed as of today, but that doesn't mean that we might not consider shareholder friendly work before that, if we feel good about the glide path. And we're in discussions with people who lend us money that they would be supportive of that as well. So it's a balance. That's what I would say. I don't know, Matt, if you'd add anything to that.

這些是我們從今天開始承諾的 27 年目標，但這並不意味著我們可能不會考慮在此之前進行股東友好的工作，如果我們對下滑路徑感覺良好的話。我們正在與借錢給我們的人進行討論，他們也會支持這一點。所以這是一個平衡。我就是這麼說的。我不知道，馬特，你是否願意添加任何內容。

I think that was well articulated. We've demonstrated we know what to do with the cash flow to get us to the position that we need to. We will continue to yield high free cash flow and as we get to a level of more comfort, and this is why you're probably not hearing a firm target. It's because, yes, we agree three is good. But that is not going to limit us as we approach three. We can start to be more flexible with how we use that strong cash flow that we have.

我認為這已經表達得很好了。我們已經證明我們知道如何利用現金流來達到我們需要的地位。我們將繼續產生高自由現金流，隨著我們達到更舒適的水平，這就是為什麼您可能沒有聽到明確的目標。這是因為，是的，我們同意三個是好的。但當我們接近三個時，這不會限制我們。我們可以開始更靈活地利用我們擁有的強勁現金流。

Perfect. All right, thank you. That's all for me.

完美的。好的，謝謝。這就是我的全部。

Carla Casella with JPMorgan.

卡塞拉 (Carla Casella) 與摩根大通 (JPMorgan) 合作。

Hi, somewhat of a related question. It looks like you paid some more debt down in the quarter. I know you had earlier talked about paying down $200 million additional on the term loan. What was the additional paid on beyond that? Was it more term loans or did you buy back some bonds in the market?

嗨，有點相關的問題。看來您在本季還清了更多債務。我知道您早些時候曾談到要額外支付 2 億美元的定期貸款。除此之外還額外支付了哪些費用？是增加了定期貸款還是在市場上回購了一些債券？

No, it's more term loan. And we're going to focus on our term loan. We do have a note coming up in 2026 that we'll begin to take a look at how we want to manage that. That's a $250 million maturity. So we'll be able to manage that either with cash flow on the revolver as we move forward. But the payments we're making right now are clearly targeted towards term loans.

不，更多的是定期貸款。我們將重點放在定期貸款上。我們確實會在 2026 年發布一份說明，表明我們將開始考慮如何管理這個問題。到期期限為 2.5 億美元。因此，隨著我們的前進，我們將能夠透過左輪手槍上的現金流來管理這一點。但我們現在支付的款項顯然是針對定期貸款的。

Okay, great. And then on working capital, I mean, given that you're exiting AeroGarden and the Hawthorne third-party suppliers, should we think about working capital similar to the cadence of last year or will there be significant differences in the spikes or troughs?

好的，太好了。然後關於營運資金，我的意思是，考慮到您要退出 AeroGarden 和 Hawthorne 第三方供應商，我們是否應該考慮與去年類似的營運資金節奏，或者高峰或低谷是否會有顯著差異？

So the last two years working capital has been a significant source of free cash flow. And what we've told you all is that we will have worked through our inventory positions and excess inventory positions by the end of '24. And so if I'm looking at '24 to '25, I would not expect working capital to be a source of cash flow if I'm modeling that out.

因此，過去兩年營運資金一直是自由現金流的重要來源。我們已經告訴大家的是，我們將在 24 年底前處理完庫存部位和過剩庫存部位。因此，如果我考慮的是 24 至 25 年，如果我對其進行建模，我不會期望營運資金成為現金流的來源。

Okay, great. And then just lastly on the M&A environment, can you talk about, I mean, are you seeing any changes in the M&A environment? I mean, the tone of it, whether buyers, sellers, pricing looks more rational, anything you can give there?

好的，太好了。最後關於併購環境，可以談談，我的意思是，你看到併購環境有什麼改變嗎？我的意思是，它的基調，無論是買家、賣家，定價看起來更合理，你能提供什麼嗎？

I think if you look at the pipeline that we have, within that pipeline, there are a number of tens of millions of revenues all the way up to hundreds of millions of revenues and pretty much across the board the profile of those businesses somewhat mirrors our profile, where everyone believes maybe next year or the year ahead is better as far as timing.

我認為，如果你看看我們擁有的管道，在該管道中，有數千萬的收入一直到數億的收入，而且幾乎全面地這些業務的概況在某種程度上反映了我們的情況。個人都認為，就時機而言，明年或未來一年可能會更好。

And that's okay because we're strengthening every day. You're seeing it in our EBITDA recovery and our margin recovery as well. I think timing-wise, people's heads are 12 months plus and we'll see if we can motivate somebody within that.

這沒關係，因為我們每天都在加強。您可以從我們的 EBITDA 恢復和利潤率恢復中看到這一點。我認為從時間上來說，人們的頭腦有 12 個月以上的時間，我們將看看是否可以在這段時間激勵某人。

On the valuation side, you're not necessarily seeing a big movement in our target pipeline in valuations, because growth expectations are kind of consistent. Margins, we're outpacing. I think the delta multiples will also favor us as we move forward, but continuing to work it and it is a good area for us to look for not only deleveraging opportunities if these things are all accretive, but also the natural brand positions that a portfolio and a capability like our company should have. These pipeline opportunities are very much brand leveraging our systems and our capabilities. We're not stepping out of bounds in this pipeline.

在估值方面，您不一定會看到我們的目標估值出現重大變動，因為成長預期是一致的。利潤率，我們已經超越了。我認為，隨著我們前進，三角洲倍數也將有利於我們，但繼續努力，這對我們來說是一個很好的領域，不僅可以尋找去槓桿化機會（如果這些東西都是增值的），而且還可以尋找投資組合的自然品牌定位以及我們公司應該具備的能力。這些管道機會很大程度上是利用我們的系統和能力的品牌。我們不會越界。

Look, I want to just throw a couple of comments on that. One is that we outperformed the lawn and garden category last year. So by definitions to some extent people we're talking to have not. We're trying to build up our financial strength. They're trying to say what occurred last year was a one-timer. And so that's pretty reasonable, I think.

聽著，我想對此發表一些評論。一是我們去年的表現優於草坪和花園類別。因此，根據定義，在某種程度上，我們正​​在交談的人沒有。我們正在努力增強我們的財務實力。他們試圖說去年發生的事情只是一次性的。我認為這是相當合理的。

And that means that there's no rush, but these are virtually all adjacencies, low integration risk, businesses that we sort of know. What we did say which gets to valuation is that if we like a business and either people are not interested in talking to us or the price is not reasonable, we're going to compete. And our position is strengthened, not weakened here.

這意味著並不著急，但這些實際上都是相鄰的、低整合風險的、我們所了解的業務。我們確實說過，涉及估值的是，如果我們喜歡一家企業，但人們沒有興趣與我們交談，或者價格不合理，我們就會參與競爭。我們的地位在這裡得到加強，而不是削弱。

And so if people want to take that risk, that's kind of up to them. I'd say join the team. So a little bit of a message being passed here that if we like a category and we want to play, we'll reach out if we can get a deal done and it's good. And waiting a year for us is not a big deal, but it allows us to strengthen, but if people aren't interested, we're happy to compete as well.

因此，如果人們願意冒這個風險，這取決於他們。我想說的是加入這個團隊。因此，這裡傳遞的一點訊息是，如果我們喜歡某個類別並且想要玩，我們會聯繫是否可以達成交易並且這是很好的。等待一年對我們來說並不是什麼大不了的事，但它可以讓我們變得更強，但如果人們不感興趣，我們也很樂意競爭。

Great. Thank you.

偉大的。謝謝。

This does conclude the question-and-answer session. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

問答環節到此結束。感謝您參加今天的會議。這確實結束了該程式。您現在可以斷開連線。