Spectrum Brands Holdings, Inc. Q3 2025 earnings call

Thank you, and welcome to Spectrum Brands Holdings' Q3 2025 Earnings Conference Call and Webcast. I'm Joanne Chomiak, Senior Vice President of Tax & Treasury, and I will moderate today's call. To help you follow our comments, we have placed a slide presentation on the event calendar page in the investor relations section of our website at www.spectrumbrands.com. This document will remain there following our call. Starting with slide two of the presentation, our call will be led by David Maura, our Chairman and Chief Executive Officer, and Jeremy Smeltser, our Chief Financial Officer. After opening remarks, we will conduct the Q&A. Turning to slides three and four, our comments today include forward-looking statements, which are based upon management's current expectations, projections, and assumptions, and are by nature uncertain. Actual results may differ materially.

Due to that risk, Spectrum Brands encourages you to review the risk factors and cautionary statements outlined in our press release dated August 7th, 2025, our most recent SEC filings, and Spectrum Brands Holdings' most recent annual report on Form 10-K and quarterly reports on Form 10-Q. We assume no obligation to update any forward-looking statements. Our statement reflects our expectations regarding tariffs, which are based upon currently known and effective tariffs and do not reflect tariffs that have been announced and delayed, or other additional tariffs which could result in additional costs. Also, please note that we will discuss certain non-GAAP financial measures in this call. Reconciliations on a GAAP basis for these measures are included in today's press release and 8-K filing, which are both available on our website in the investor relations section. Now, I'll turn the call over to David Maura. David?

Hey, thanks, Joanne. Good morning, everybody. Welcome to our third quarter earnings update. I want to thank everyone for joining us today. I'll start the call as usual with an update on kind of the global economic markets and their impact on our company. We'll then talk about Spectrum's operating performance and then our strategic initiatives. Jeremy, as usual, will then provide a more detailed financial and operational update, including a discussion on the more specific results of each business unit. If I could get you guys to turn to slide six now. When we spoke last quarter, the company had been hit with what I'm now calling the tariff torpedo. That really disrupted practically every aspect of how we do business around here. Operating when the costs of your products can more than double overnight is something we never really thought we'd experience.

Frankly, about 20% of our global cost of goods sold at the time was sourced from China for the U.S. market, and the cost of importing that product for sale to the U.S. consumer was suddenly so high we had to take very swift and, quite frankly, draconian actions to protect the company. I told you last quarter that we would control what we could control, we would be nimble, and we would protect the house. We were resolute in our conviction that we would not sacrifice the long-term health of our business for any sort of short-term gain. I was confident that we would get through the near-term volatility and emerge a stronger, more focused competitor in our space.

We knew that there would be short-term consequences to these decisions, but we also believed that doing the right thing for the long term would outweigh any sort of short-term gain. As I sit here today, 90 days later, I'm confident that we've made the right decisions. We took the challenges head-on. We felt the impacts on our results this quarter, but we're now already starting to see the benefits of making these difficult but correct decisions. Doing the difficult but right thing meant we had material supply issues in the third quarter. You'll recall that when U.S. tariff rates on Chinese-sourced products went to 145% and in some cases up to 170% earlier this year, we paused virtually all finished good purchases from China until such time the tariff levels declined to a place where we believe we could maintain profitability and margins. In mid-May, when the U.S.

tariff rate on Chinese imports dropped to 30%, only then did our businesses begin to strategically place orders again, and we only bought product where we knew we could price them for tariffs. Turning to the supply chain took time because we completely shut it off. We were negotiating supplier pricing concessions, we were prioritizing production runs, and we were making arrangements with ocean freight carriers. We genuinely have one of the best supply chain teams in the industry today, but even with them at the helm, we went up to eight weeks without any importation of product, and that left us out of stock on some of our main SKUs. Regular supply is now back on, but in this case, doing the right thing meant we had orders we simply couldn't fill in our Global Pet Care and Home & Personal Care businesses during the third quarter.

Some of that will continue into Q4 as well. Doing the difficult but right thing meant that we stopped shipping to some customers. When we faced material inflationary headwinds, our playbook is to cover our margin structure through a combination of supplier concessions, internal cost reductions, and yes, unfortunately, pricing. With each round of tariffs, we had to notify our customers that we will be increasing prices. No pricing negotiation with a retail customer is easy, but generally, we seek to be in a mutually agreeable place to arrive at a logical point given the inflationary headwinds. When these negotiations stall, we simply have no choice but to stop shipping to the customer and allow the negotiation to play out. We know that our products matter not only to our retailers but to our ultimate consumers, and we need to protect our bottom line, in part through pricing.

With all the tariff headwinds this year, and even with at the lower Chinese tariff levels, it simply wasn't practical for us to absorb all the cost of tariffs without increasing some prices. Unfortunately, some of our negotiations lasted much longer than others, which meant we had to stop shipping to certain customers while those negotiations were ongoing. In fact, in some of these cases, the customers were quite large, and they were our key customers, and the stop shipment lasted weeks. The good news is that we have now tariff-related pricing in place with practically all of our customers, and our sales levels are already improving. Again, doing the right thing to avoid massive long-term P&L hits meant we had to lose a significant amount of revenue in the third quarter.

Doing the difficult but right thing also meant we had to look internally, unfortunately, and we had to reduce our own costs. During the quarter, we executed a number of reduction-in-force activities that spanned across all the businesses and our corporate functions. We have either eliminated open positions or delayed their backfill. We had to adjust our investment spend to reflect the state of the business and the consumer environment. We've had to prioritize investments that would be the most impactful to both this year and into the future, given softer consumer demand in some of our categories. We also reduced discretionary and external spend, and we've been shrinking the real estate footprint of our company by rightsizing office spaces, warehouses, and distribution centers.

I'm very pleased that despite these tough decisions, these cost reduction activities that we engaged in and that we've implemented literally in the last 90 days, we now expect to reduce our costs by over $50 million in the fiscal year, fiscal 2025. That's a lot of work in a 90-day period of time. We also have been working hard to diversify the supplier base across the board. The teams are continuing to create diversified sourcing footprints for our global products, developing and activating non-Chinese sourcing alternatives. Our goal is to have the lowest all-in cost of supply for each of our markets. We expect that China will likely be the low-cost supply base for our international markets because of its cost advantages and its manufacturing efficiencies.

Thanks, David. Good morning, everyone. Let's turn to slide 12 and a review of Q3 results from continuing operations. We'll start with net sales, which declined 10.2%. Excluding the impact of $6.8 million of favorable foreign exchange, organic net sales decreased 11.1%, primarily driven by targeted stop shipments to certain retailers, supply constraints, and category softness in our Global Pet Care and Home & Personal Care businesses, as well as unfavorable weather in our Home & Garden business, with a cold and wet start to the season impacting the timing of replenishment orders. Gross profit decreased $38.7 million, and gross margins of 37.8% decreased 110 basis points, largely driven by lower volume, unfavorable mix, inflation, and higher tariffs, partially offset by pricing, impacts from cost improvement actions, and operational efficiencies, as well as favorable effects.

Operating expenses of $232.8 million decreased 8.7% due to lower investment spend in advertising and marketing and general expense management in light of the category softness and lower restructuring-related projects, partially offset by higher impairment charges in the quarter. Operating income of $31.3 million decreased by $16.4 million, driven by the gross margin decline, partially offset by the lower operating expenses I mentioned. GAAP net income and diluted earnings per share both increased, primarily driven by lower interest expense, reduced income tax expense, and lower share count, partially offset by lower operating income and lower investment income. Adjusted EBITDA was $76.6 million, a decrease of $29.7 million, driven by investment income of $12.7 million last year, lower volume, and reduced gross margins, partially offset by continued general expense management and lower investments in light of category softness. Excluding last year's investment income, adjusted EBITDA decreased $17 million.

Adjusted diluted EPS increased to $1.24, driven by reduced income tax expense, lower interest expense, and the reduction in shares outstanding, partially offset by lower adjusted EBITDA. Turning now to slide 13, Q3 interest expense from continuing operations of $8.4 million decreased $7.3 million due to our lower gross outstanding debt balance. Cash taxes during the quarter of $14 million increased $9.6 million from last year. Appreciation and amortization of $25.1 million was flat to last year, and separately, share-based compensation increased to $4.8 million from $4.5 million last year. Capital expenditures were $10 million in Q3, essentially flat to last year. Cash payments towards strategic transactions, restructuring-related projects, and other unusual non-recurring adjustments were $8.6 million versus $10.5 million last year. Moving now to the balance sheet, we had a quarter-end cash balance of $122 million and $388.5 million available on our $500 million cash flow revolver.

Total debt outstanding was approximately $681 million, consisting of borrowings on our cash flow revolver of $103 million, $496 million of senior unsecured notes, and $82 million of finance leases. We ended the quarter with $559 million of net debt. Now let's get into the review of each business unit to provide details on the underlying performance drivers of our operational results. We will start with Global Pet Care, which is on slide 14. Reported net sales decreased 9.6%, and excluding favorable foreign currency impacts, organic net sales decreased 11.4%. The primary driver of the sales decline was our decision to stop shipping to a handful of customers during tariff-related pricing negotiations. In the case of one key customer, the stop ship lasted a number of weeks.

By the end of the quarter, the pricing was in place, and we had resumed shipping to this retailer, although our shipments were below normal levels. In addition, sales were negatively impacted by tariff-related supply issues attributable to the period during which U.S. tariff rates on Chinese products were 145%, and we had paused importing Chinese-sourced products. Sales in the early part of our quarter were also negatively affected by capacity constraints at a large retailer, causing the retailer to slow purchases for a period of time. Those purchase patterns returned by the end of the quarter. These headwinds led to companion animals' organic net sales being down low double digits for the quarter. In addition, while we maintained our market share, the overall North American companion animal category declined in the low single digits.

We are pleased with the consumer reaction to our innovation and commercial activation, amplified by successful collaboration with key retailers that resulted in expanded distribution and improved shelf placement. In EMEA, organic net sales for our Good Boy brand increased, driven by successful range reviews in the U.K. and a very successful launch into Germany and Austria. Yet overall, companion animal sales were down low single digits, driven by weakening European consumer sentiment and a sales push into Q4 due to customer warehouse constraints. Organic net sales in Latin America grew low double digits, predominantly in the chews category. In aquatics, organic net sales declined in the low teens, with sales declining in each region. In North America, consumer demand remained soft, and sales were affected by the same pricing negotiation and weeks where we were not shipping to certain retailers.

Distribution gains at pet specialty offset some of that softness. In EMEA, market share increased nicely, however, sales were impacted by lower consumer demand and the timing of order fulfillment. GPC's new leaders are focused on commercializing innovation to engage our retailers and consumers. Our recently launched DreamBone CollaYUMS continue our focus on introducing innovation that offers health and wellness benefits for pets. CollaYUMS are the only chew on the market enriched with a type 2 collagen derived from chicken cartilage, benefiting hip and joint health while offering flavor that was liked by 100% of tested dogs. Good 'n Fun is gaining points of distribution, including in pet specialty, and we will be launching new innovation in Good 'n Tasty treats in the next few months. Our investments in Nature's Miracle are gaining momentum. Nature's Miracle has an extraordinarily high loyalty rate, driven by its best-in-class product performance.

Our investments and partnerships with retailers and influencers to increase consumer engagement, along with our recently launched delivery system featuring our patented Flip & Go technology to enhance user convenience and drive consumer engagement, is being well received by Nature's Miracle consumers. In dog and cat food, we went live with an Iams grain-free line of products and are expanding countries of distribution within EMEA. In aquatics, we are partnering with key retailers to feature our unique blowfish experience at the front of their stores, promoting the brand and its exciting innovation. This quarter's adjusted EBITDA of $44 million is $12.7 million lower than last year, and adjusted EBITDA margin was 17.2% compared to 20.1% last year. The reduction in adjusted EBITDA was primarily driven by lower sales volumes, unfavorable mix, and inflation, partially offset by operational productivity improvements, lower brand-focused investments, and effects.

Hey, thanks, Jeremy, and thanks everybody again for joining us on the call today. Look, let's take a few minutes like I normally do, and let's just recap kind of the key takeaways of today's call. We can find that on slide 19. I concluded our last call by telling you I was confident we'd get through the near-term tariff-related volatility and emerge a stronger, more focused company and competitor. We really did make very swift, difficult, decisive decisions to protect our long-term financial health during Q3, and that's caused, I mean, Q3 is just, there's a lot of distortion in the numbers when you look at, you know, not importing product for months and then, you know, not shipping for weeks, but we didn't wait. We tackled this thing head-on and aggressively.

You know, we didn't wait to turn off supply from China when tariff rates on Chinese imports skyrocketed to 145% and higher. We didn't wait to notify retailers of reasonable tariff-related price increases, and we did not wait to stop shipping when negotiations stalled. We did not wait to develop dual sourcing plans to diversify our supplier base and to regularly reassess these plans to ensure we have the lowest cost sourcing options. We did not wait to take out fixed costs and discretionary spend. Like I said in my earlier comments, I mean, taking $50 million of costs out in 90 days, it was painful. It was a lot of work, but I'm really proud of the teams for just being proactive and getting it done. Thanks, everybody.

In a typical quarter, any one of those actions is a significant undertaking, and the team did all this in the third quarter. Look, we took hits in Q3. We took our medicine. We made some hard decisions, but that's behind us. Our focus is now on the future, and you know what? Q4 is off to a good start. We are seeing more normalized sales than Q3. We will have a little bit of supply constraint on some orders still in the fourth quarter, and that's lingering over from when we paused all the Chinese purchases, particularly in the appliance units, but those are going to be all behind us by the end of the fourth quarter. Consumer sentiment in the U.S.

and Europe is still a little soft, but we do see signs of improving macroeconomic conditions, and in fact, we expect consumer confidence will stabilize once this heightened geopolitical tension subsides. Weather trends have improved for Home & Garden. We expect to see continued strong POS levels into the fall, and we're excited about the fall crawl season that Javier and the team have going on currently. We know the hard work's not behind us, and we're not kidding ourselves. We expect that tomorrow will bring more changes and challenges, and we'll again have to make difficult but correct decisions. However, I'm highly confident that our team of 3,000 global employees will rally together, attack those challenges just like we attacked them this past quarter.

We're going to continue to lean into our competitive advantage as we take on these challenges, knowing our brands, leaders, teams, strong cash flows, and strong balance sheet are all there to support us. With the third quarter behind us and a very solid start to Q4, we are now full steam ahead to finish fiscal 2025 strong, and we're optimistic about setting up for a better 2026. At this time, I'm going to turn the call back to Joanne, and we're happy to take questions.

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

Hi, this is Madison Callinan.

Hey, Brian. Good morning.

Hey, Madison.

Hey, guys. How are you?

We're good.

Thanks for taking our questions. First, could you reasonably quantify how much sales you left on the table by stopping shipments and other internal actions in Q2? What impact, if any, lingers into Q4? Thanks.

A lot and less.

Yeah. I mean, I think, Madison, if you look all in, we would probably estimate it's in the neighborhood of $30 million in Q3. To David's point, I think it'll be quite a bit less than that in Q4.

Great. Why is guidance still so difficult, even with the improved clarity on tariffs? We've heard from other companies who are more exposed that have either reinstated guidance or updated their prior outlooks. Any color you could give us would be great. Thanks.

First, comparisons with FIFA Joy. We don't do that. We manage our own business. Look, I think the message I'm trying to get to you guys today is we took this thing on full steam. I use nautical terms because I grew up around a lot of boats, but we stuck the bow of this company right into the wave, and I'm really proud of how we've addressed it. If you're evaluating the stock, you shouldn't price it off Q3. Q3 has got a ton of noise where you're shutting down inputs for two months. You're shutting down selling stuff for weeks on end to get pricing, and you're taking $50 million of costs out of the business. That's a lot of surgery in a 90-day period, and that's why I'm really proud of the team.

What we've told you is, hey, things are really looking a hell of a lot better. July is off to a great start. The year we got hit with this tariff torpedo, and it just doesn't make any sense. Listen, it's still fluid, right? You can read the headlines every single day, and it's just irresponsible to sit here and say, "Oh, yeah, we can, we can, we're going to predict this stuff like a, like, you know, very accurately." We are getting back. What we're trying to convey is, look, we're in Q4. We think the bulk of this is behind us. We're getting into a much more normalized operating rhythm. It's full steam ahead, and we're setting up for a great 2026. That's only two months away, and obviously, we look forward to talking to you then in November.

I think that's the best way I can tell you where we're at.

Thanks, guys.

Thanks, Mad.

Thank you.

Hey, Bob. How are you doing?

Hi, this is Will on for Bob. How are you doing?

I'm good.

You've been increasing your brand investment in recent years. Can you just talk about your capital allocation strategy in a soft consumer environment? Are there any changes to where you are investing?

Listen, I think the whole space is undervalued. I think anything that's facing the consumer or had any sort of tariff exposure to it got destroyed from a share standpoint. I think the shares are dramatically undervalued. We keep buying them every single day. We have a very unlevered balance sheet to continue buying back shares, but we've bought back almost half the float, and I guess if the shares want to stay down here, we're going to keep buying them. At the end of the day, I do want to do M&A. We chased a deal this quarter, got really close, unfortunately, got outbid.

We have to maintain discipline when it comes to price and getting return on acquisitions, but we have a vision to triple our Pet business and double our Home & Garden business and find something to create with small kitchen appliances, and I want to maintain enough balance sheet flexibility to accomplish that. We may or may not take on partners to do it, but look, at the end of the day, I think the balance sheet's super healthy. We're super liquid. We want to go build an AOP plan and put together a much better 2026, and we look forward to talking to you about that in November. We want to invest behind these businesses and grow them organically again, but we want to do creative acquisitions in M&A. We think our pet platform is amazing. Super excited to have Ori on board.

I just got invited to a leadership meeting in St. Louis and gave him a little bit of a pep talk, but I was blown away by the opportunity we have both organically and strategically. As I talked about last quarter, we think if we can fill in some voids, whether it's wet food, whether it's cat, whether it's some of these treats as we try to expand into treats versus just being in chews, all the while strengthening our core chews business. We think our pet platform's got a very exciting future. We've got a few gaps: health, wellness, food, cat, etc. We want to go fill those in with M&A, and we're going to continue to pursue that. Home & Garden, I think there's a couple of things that are coming down the pike that could fit really well with Javier's business. We've got tons of capital.

Everybody calls us. Everybody loves our low leverage, and there's tons of capital available to us. We have to be disciplined, find the right assets, and in the interim, we'll keep buying the shares.

Thank you. Just to follow up, has the M&A environment improved meaningfully with the new tariff map recently enacted, or is there still too much uncertainty? Thanks.

You know, it's both, right? Uncertainty makes it hard to underwrite stuff that's in trouble, and you got to be careful you don't catch a falling knife. There is a lot of capital still around, and like I just disclosed, we unfortunately just got outbid on something I think would have been a fantastic fit with us. Thankfully, it went to private equity, so it'll come back again. Hopefully, we'll get a second shot at it. We think, you know, and if you, I agree with some of the bigger private equity shops. I think what you're seeing them say is, "Hey, look, you know, seller expectations are still too high. Bids are below clearing prices on a lot of stuff," and hopefully that bid aspirate narrows and you see more transaction. I think it's getting better, but it's getting better slower than we'd like.

Thank you.

Thank you.

Hi, I wanted you to give us a little.

Good morning.

Good morning. I wonder if you'd give us a little bit more color on the pet category and if you're seeing a major channel mix there in terms of consumer preferences towards mass, club, specialty. You talked about share gains. Is this more color on where you're gaining share or where the supply constraint you talked about came from? You talked about one retailer having supply constraints, where that came from. Any more color on pet?

Yeah. I'll start. I think it's interesting to see the overall category still declining in what we do, particularly for chews and treats, right? I think that's been the biggest challenge for all of us that compete in that space because it's been years of category growth. I think that goes back to what we talked about on the call, which is it's really driven by consumer sentiment and some trade downs, and that's been a challenge for us really the last four quarters. I think what you heard in my prepared remarks today is actually a little bit more optimism from a number of things. One, we got our pricing through on chews in particular. That's very important because that's our biggest exposure from a category perspective.

Two, I think, as we've talked about the last couple of calls, particularly last call, all of us are in the same boat, right? Everybody on the chews and treats side, the vast majority, the larger players are sourcing out of Asia, and the tariffs are hitting everybody, and that includes private label. We have actually started to improve versus private label in the U.S. market, which is great to see. Pet definitely was impacted materially by stop shipments. I actually think that if we didn't have stop shipments and some product availability issues, we probably sequentially would have improved sales from Q2 to Q3, which again goes back to it actually does feel like it's bottomed and starting to get a little bit better.

Certainly, we at least maintain share from a POS perspective, even though our net sales were below because of the timing of those stop shipments and retailer constraints. That was mostly in the U.S., a little bit in Europe too, around a global customer that really was having just some overall warehouse constraints and issues with too much product in their DCs, and it delayed some orders. Overall, I think our message is we think we're probably incrementally in a better place than we were six months ago in pet. We've got our pricing in place and a new team in that business reinvigorating the messaging both internally and externally with our retail customers, and we're excited about what's ahead in 2026.

Okay. Great. Can I just ask, you talked about the timing of your shipping and holding off on purchases during the tariffs. Are you seeing major volatility in shipping or container rates with yourself and maybe others doing some of the same?

No.

Not anymore. No. We're pretty steady. We're pretty much on contract rates. We're really pleased with our relationships with ocean freight carriers, and I think I really don't see anything disrupting the normal pace in Q4 like we had in Q3, obviously, barring some blow-up in trade negotiations amongst the U.S. and countries that matter to our sourcing.

Okay. Great. Thank you.

Thanks, Carla.

Our last question comes from Olivia Tong at Raymond James.

Great. Thanks.

Hey, Olivia.

Hi.

Morning. How are you doing?

Good. Good.

Good. Much, much, much better after getting through the last 90 days. We're feeling better.

I would imagine so. I wanted to follow up a little bit on what was left on the table and, you know, of that $30 million, how much of that you think you can make up or have made up already, if you could sort of parse that out between HPC and H&G to start.

Yeah, I mean, that doesn't really impact H&G, Olivia. It's really in HPC and GPC.

Sorry, that's what I said.

Issue in Q3. I think probably half of it we've already recovered and goes to that solid July that David talked about, particularly around some of the stop shipments. Some of it we'll miss. Product availability, oftentimes you'll miss a little bit of POS, but I don't think by the time we get through the full year, that'll be an overall meaningful impact to our results.

Got it. Sorry about that, except on.

It's okay.

H&G. Putting aside, obviously, the noise with the stop shipment and the stop ordering, what's your view in terms of consumer demand? We talked about this a couple of times in the call, but are you seeing any change in demand across price points or consumers looking for more value, or are they holding the line? In terms of the pricing that you're planning, could you talk about how much on average and the range that you're looking for and when that's getting implemented?

I'll go first, and then Jeremy can fix it. Look, I've been surprised at how resilient the consumer is, honestly, given everything thrown at them. We saw a weakness in the U.S., I think last fall coming into the start of this year, and Europe kind of followed behind that. There is still uncertainty out there, but my personal view is that we're probably through the bulk of the material volatility and just scaring the hell out of people with tariff rates changing every day and just the unpredictable nature of global trade. I think as that kind of calms down, I do think consumer sentiment will start to heal globally. If we can get some rate cuts and all the rest of that, that helps. We clearly have seen people be more judicious in how they spend money, tighter, more selective.

That's also why we're so bullish on what we're trying to tell you here, like getting a mod reset, getting better shelf placement, getting our branded product, which actually generates a lot of margin and a lot of turns and a lot of velocity and foot traffic for our retailers in accomplishing that this quarter in pet. That's a really positive outcome. I would say the consumer's been more resilient than I thought. We have a lot of new innovation in the pipeline. It's going to take a couple of quarters, right? We just put new leadership in there. It's going to take some time to get some traction, but we're pretty jazzed about where I think we can go organically. We want a couple of months here to write an AOP plan and put together something for 2026, and then we can give you a lot more specifics.

What would you add to that?

Yeah. I mean, I agree with everything David says. What I tell people about what we're seeing from a consumer behavior perspective is just look at what we're experiencing in pet versus what we're experiencing in Home & Garden and think about the different brand strategies there, particularly in the U.S. Our Home & Garden business is entirely a portfolio of value brands that, you know, while we have great innovation, by definition, when consumers go to the shelf and buy our products in those categories, they are values to other brands in that space, and we're gaining share in every category, is what you heard in my prepared remarks. Consumers are looking for value, and I think that's pretty consistent with what all of our big retail customers say on their earnings calls as well.

If you look at pet, you know, the last three or four quarters, it's been a struggle for us to hold share versus category predominantly due to trade downs and private label, but that is starting to get a little bit better. That's, I think, a great picture of what the consumer is experiencing. I think, you know, the fact that when prices do get raised, when we do a rollback on our premium brands, we actually see consumers come right back to those brands, and so they still really do want those branded products. That's why I feel so much better heading into 2026 in that business. To your last question, you know, I'm really pleased with where we're at right now.

As we sit here, it's, you know, still fairly early in the fourth quarter, and all these trade arrangements have been made just in the last few weeks with countries that matter to us, and many of them have made arrangements with the U.S. at pricing above the 10% tariffs that we were operating under. We still only have, you know, $20 million-$25 million in incremental pricing and supplier concession on an annualized basis that we're targeting for 2026, you know, to mitigate that. That's a pretty low number across a $3 billion revenue base in three different businesses in multiple categories. To your question on how much price, it's, you know, by definition, it's less than 1% in total.

At this point, I think it'll be very strategic and targeted from a revenue growth management perspective on how we get that price, and we'll partner with our retail customers to make that happen and protect, as David always says, protect our bottom line and our house.

Understood. Thanks and best of luck.

Thanks.

All right. Thank you.

Thank you. With that, we have reached the top of the hour, so we will conclude our conference call. Thank you to David and Jeremy. On behalf of Spectrum Brands, thank you for your participation this morning.