What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-10-30 compared with 2025-07-31 · 100 added, 84 removed, 127 unchanged (59% of the section changed)

15 unchanged sentences

and its consolidated subsidiaries as a whole, unless the context otherwise requires.

The Company is a leading innovation company focused on creating smarter, safer and more beautiful homes and improving lives that competes in attractive long-term growth markets in our product categories.

The Company’s driving purpose is to elevate every life by transforming spaces into havens.

The Company is a leading home, security and digital company whose purpose is to elevate every life by transforming spaces into havens.

The Company makes innovative products for residential and commercial environments, with a growing focus on digital solutions and products that add luxury, contribute to safety and enhance sustainability.

We believe that the Company has certain competitive advantages including market-leading brands, a diversified mix of channels, lean and flexible supply chains, a strong capital structure, as well as a tradition of strong innovation and customer service.

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We believe the Company’s track record reflects the long-term attractiveness and potential of the categories we serve and our leading brands.

We believe the long-term outlook for our products remains favorable, and our strategic advantages, including the set of capabilities we refer to as the Fortune Brands Advantage, will helps us to continue to achieve profitable organic growth over time.

We believe the long-term outlook for our products remains favorable, and our strategic advantages, including the set of capabilities we refer to as the Fortune Brands Advantage, will help us to continue to achieve profitable organic growth over time.

We continue to believe our most attractive opportunities are to invest in profitable organic growth initiatives, pursue accretive strategic acquisitions, non-controlling equity investments, and joint ventures, and return cash to stockholders through a combination of dividends and repurchases of shares of our common stock under our share repurchase program as explained in further detail under “Liquidity and Capital Resources” below.

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RESULTS OF OPERATIONS

Twenty-Six Weeks Ended June 28, 2025 Compared To Twenty-Six Weeks Ended June 29, 2024

Thirty-Nine Weeks Ended September 27, 2025 Compared To Thirty-Nine Weeks Ended September 28, 2024

Fortune Brands delivered net income of $222.4 million, or $1.83 per diluted common share for the thirty-nine weeks ended September 27, 2025 compared to net income of $366.8 million, or $2.91 per diluted common share in the prior year.

Net income for the thirty-nine weeks ended September 27, 2025 was negatively impacted by lower sales unit volume, asset impairment charges of $50.1 million and restructuring and restructuring-related expenses in connection with our headquarters consolidation of $69.2 million.

We delivered cash provided by operating activities of $270.4 million of the thirty-nine weeks ended September 27, 2025, compared to $395.5 million in the same prior year period.

(In millions)

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Operating income

The following discussion of consolidated results of operations and segment results refers to the twenty-six weeks ended June 28, 2025 compared to the twenty-six weeks ended June 29, 2024.

The following discussion of consolidated results of operations and segment results refers to the thirty-nine weeks ended September 27, 2025 compared to the thirty-nine weeks ended September 28, 2024.

Consolidated results of operations should be read in conjunction with segment results of operations.

Net sales decreased by $113.0 million, or 4.8%, primarily due to lower sales volume in the U.S.

as well as in our international markets ($59.8 million) and unfavorable foreign exchange ($6.5 million), partially offset by higher product pricing (including price increases implemented to offset or partially offset tariff impacts) and lower customer sales incentives.

Net sales decreased by $119.1 million, or 3.4%, primarily due to sales volume decreases in China of $59.0 million.

The remaining decreases were due to lower sales volume, partially offset by disciplined pricing actions, including strategic adjustments to mitigate tariff-related costs and lower customer sales incentives.

Net sales were unfavorably impacted by foreign exchange of $5.4 million.

Cost of products sold

Cost of products sold decreased by $82.2 million, or 6.2%, primarily due to the lower sales volume, lower transportation costs and productivity improvements in all of our segments as a result of strategic sourcing initiatives and manufacturing efficiencies, partially offset by significant cost inflation.

Cost of products sold decreased by $77.9 million, or 4.0%, primarily due to the lower sales volume, lower restructuring-related charges of $10.5 million and continued productivity gains across the segments, supported by strategic sourcing initiatives and manufacturing efficiencies, partially offset by tariff and cost inflation.

Cost of products sold also includes a loss, net of insurance recovery, of $3.0 million relating to a fire in a portion of a manufacturing facility within the Outdoors segment.

Selling, general and administrative expenses

Selling, general and administrative expenses increased by $22.4 million, or 3.5%, primarily due to higher restructuring-related charges ($16.6 million), higher distribution costs and higher customer credit losses, partially offset by lower headcount-related expenses.

Selling, general and administrative expenses increased by $37.5 million, or 4.0%, primarily due to higher restructuring-related charges of $27.8 million, distribution costs, and higher professional fees, partially offset by reductions to incentive compensation.

Asset impairment charges

During the thirty-nine weeks ended September 27, 2025, we determined one of our assets within the Outdoors segment met the criteria to be classified as held-for-sale criteria.

An impairment charge of $49.7 million was recorded to reduce the carrying value of the asset to equal fair value, less estimated costs to sell.

Restructuring charges

Restructuring charges of $38.5 million in the twenty-six weeks ended June 28, 2025 are primarily attributable to costs associated with the decision to consolidate the Company's U.S.

regional offices into one campus headquarters and its related organizational and personnel changes ($33.5 million), product-line rationalizations within our Outdoors segment, plant closures in both our Water and Security segments and headcount-reduction actions across all segments

Restructuring charges of $49.3 million in the thirty-nine weeks ended September 27, 2025 are primarily due to $43.3 million of costs incurred in connection with the Company's headquarters consolidation and its related organizational changes, as well as a product-line rationalization within our Outdoors segment and plant and distribution center closures in our Water and Security segments.

Operating income

Operating income decreased by $85.9 million, or 24.2%, primarily due to the lower sales volume and higher restructuring and restructuring-related charges, partially offset by lower transportation costs and productivity improvements in all of our segments as a result of strategic sourcing initiatives and manufacturing efficiencies as well as lower headcount-related costs.

RESULTS OF OPERATIONS (Continued)

Operating income decreased by $165.2 million, or 29.5%, primarily due to lower sales volume, material cost inflation, asset impairment charges of $50.1 million, higher distribution costs, and higher restructuring and restructuring-related charges of $52.5 million, partially offset by continued productivity gains across the segments supported by strategic sourcing initiatives and manufacturing efficiencies as well as reductions to incentive compensation.

Interest expense

Interest expense decreased by $2.6 million, or 4.2%, primarily due to lower interest rates on current-period commercial paper borrowings, partially offset by higher commercial paper borrowings net of repayments during the twenty-six weeks ended June 28, 2025, as compared to the twenty-six weeks ended June 29, 2024 ($637.4 million in 2025 versus $104.7 million in 2024).

Other income, net

Other income, net, was $8.2 million in the twenty-six weeks ended June 28, 2025, compared to $3.6 million in the twenty-six weeks ended June 29, 2024.

The increase in other income, net is primarily due to an increase in interest income ($3.1 million) and a decrease in foreign currency transaction expense ($3.0 million), partially offset by an increase in net periodic benefit expense ($4.5 million).

The effective income tax rates for the twenty-six weeks ended June 28, 2025 and twenty-six weeks ended June 29, 2024 were 30.1% and 22.2%, respectively.

The difference between the Company’s effective income tax rate for the twenty-six weeks ended June 28, 2025, and the U.S.

statutory rate of 21% primarily relates to state income taxes, including the state income tax impacts of legal entity restructuring, foreign income taxed at higher rates, and dividend withholding tax, partially offset by decreases in uncertain tax positions.

The difference between the Company’s effective income tax rate for the twenty-six weeks ended June 29, 2024, and the U.S.

statutory rate of 21% primarily relates to state income taxes and foreign income taxed at higher rates, partially offset by a favorable benefit related to a valuation allowance release, decreases in uncertain tax positions, and tax credits.

Net income was $151.6 million in the twenty-six weeks ended June 28, 2025, compared to $230.2 million in the twenty-six weeks ended June 29, 2024.

The decrease in net income was due to lower operating income ($85.9 million), partially offset by lower interest expense ($2.6 million) and higher other income ($4.6 million).

Interest expense decreased by $4.2 million, or 4.5%, primarily due to lower interest rates on current-period commercial paper borrowings and lower senior unsecured notes outstanding, partially offset by higher commercial paper borrowings net of repayments during the thirty-nine weeks ended September 27, 2025, as compared to the thirty-nine weeks ended September 28, 2024 ($479.1 million in 2025 versus $104.7 million in 2024).

Other (income) expense, net

Other (income) expense, net, was $(5.8) million in the thirty-nine weeks ended September 27, 2025, compared to $(5.2) million in the thirty-nine weeks ended September 28, 2024.

The increase of $(0.6) million in other (income) expense, net is primarily due to an increase in interest and investment income of $4.8 million and a decrease in foreign currency transaction expense of $1.9 million, partially offset by an increase in net periodic benefit expense of $6.5 million.

The effective income tax rates for the thirty-nine weeks ended September 27, 2025 and thirty-nine weeks ended September 28, 2024 were 28.7% and 22.3%, respectively.

The difference between the Company’s effective income tax rate for the thirty-nine weeks ended September 27, 2025, and the U.S.

statutory rate of 21% primarily relates to state income taxes, including the state income tax impacts of legal entity restructuring, dividend withholding tax and foreign income taxed at higher rates, partially offset by decreases in uncertain tax positions.

The difference between the Company’s effective income tax rate for the thirty-nine weeks ended September 28, 2024, and the U.S.

statutory rate of 21% primarily relates to state income taxes and foreign income taxed at higher rates, partially offset by favorable benefits related to a valuation allowance release, provision to return adjustments, decreases in uncertain tax positions, and tax credits.

Net income was $222.4 million in the thirty-nine weeks ended September 27, 2025, compared to $366.8 million in the thirty-nine weeks ended September 28, 2024.

Results By Segment

Net sales decreased by $72.6 million, or 5.7%, primarily due to lower sales unit volume (including a sales volume decline within our China business of approximately $46.4 million) and unfavorable foreign exchange ($5.9 million), partially offset by higher product pricing (including price increases implemented to offset or partially offset tariff impacts) and lower customer sales incentives.

Operating income decreased by $32.9 million, or 11.3%, primarily due to the lower sales volume, higher restructuring and restructuring-related charges ($17.0 million) and significant cost inflation, partially offset by productivity improvements as a result of strategic sourcing initiatives and manufacturing efficiencies, higher product pricing (including price increases implemented to offset or partially offset tariff impacts), lower customer sales incentives and lower transportation costs.

Net sales decreased by $20.8 million, or 3.0%, primarily due to lower sales unit volume, partially offset by higher product pricing (including price increases implemented to offset or partially offset tariff impacts), lower customer sales incentives and favorable product mix.

Operating income decreased by $21.3 million, or 24.8%, primarily due to the lower sales unit volume, higher restructuring and restructuring-related charges ($0.8 million) and significant cost inflation, partially offset by higher product pricing (including price increases implemented to offset or partially offset tariff impacts) and productivity improvements as a result of strategic sourcing initiatives and manufacturing efficiencies.

Net sales decreased by $19.6 million, or 5.4%, primarily due to lower sales unit volume and unfavorable foreign exchange ($0.6 million).

Operating income decreased by $14.8 million, or 27.7%, primarily due to the lower sales unit volume and higher restructuring and restructuring-related charges ($1.4 million), partially offset by productivity improvements as a result of strategic sourcing initiatives and manufacturing efficiencies.

Corporate expenses increased by $16.9 million, or 21.9%, primarily due to higher restructuring and restructuring-related charges ($19.9 million), partially offset by lower headcount-related costs.

Thirteen Weeks Ended June 28, 2025 Compared To Thirteen Weeks Ended June 29, 2024

Net sales decreased by $89.2 million, or 4.6%, primarily due to sales volume decreases in China of $59.0 million.

The remaining decreases were due to lower sales unit volume, partially offset by disciplined pricing actions across our portfolio, including strategic adjustments to mitigate tariff-related costs.

Net sales was unfavorably impacted by foreign exchange of $5.7 million.

Operating income decreased by $38.5 million, or 8.7%, primarily due to lower sales volume, material cost inflation, including tariff costs, higher restructuring and restructuring-related charges of $17.5 million, partially offset by manufacturing efficiencies and lower selling, general and administrative expenses, including reductions to incentive compensation.

Net sales decreased by $19.0 million, or 1.8%, primarily due to lower sales unit volume, partially offset by disciplined pricing actions, including strategic adjustments to mitigate tariff-related costs, and lower customer sales incentives.

Operating income decreased by $84.2 million, or 58.5%, due to lower sales unit volume, material cost inflation, including tariff costs, higher restructuring and restructuring-related charges of $2.2 million, partially offset by manufacturing efficiencies.

Operating income was also unfavorably impacted by asset impairment charges of $50.1 million and by losses, net of insurance recovery, relating to a fire in a portion of a manufacturing facility of $3.0 million.

Net sales decreased by $10.9 million, or 2.0%, primarily due to lower sales unit volume, partially offset by disciplined pricing actions, including strategic adjustments to mitigate tariff-related costs, and lower customer sales incentives.

Operating income decreased by $20.1 million, or 23.2%, primarily due to lower sales unit volume, material cost inflation, including tariff costs, and higher restructuring and restructuring-related charges of $5.5 million, partially offset by manufacturing efficiencies.

Corporate expenses increased by $22.4 million, or 19.6%, primarily due to higher restructuring and restructuring-related charges of $27.3 million and higher professional fees, partially offset by reductions to incentive compensation.

Thirteen Weeks Ended September 27, 2025 Compared To Thirteen Weeks Ended September 28, 2024

Fortune Brands delivered net income of $70.8 million, or $0.59 per diluted common share for the thirteen weeks ended September 27, 2025 compared to net income of $136.6 million, or $1.09 per diluted common share in the prior year.

Net income for the thirteen weeks ended September 27, 2025 was negatively impacted by lower sales unit volume, asset impairment charges of $50.1 million and restructuring and restructuring-related expenses in connection with our headquarters consolidation of $20.5 million.

(In millions)

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Operating income

The following discussion of consolidated results of operations and segment results refers to the thirteen weeks ended June 28, 2025 compared to the thirteen weeks ended June 29, 2024.

The following discussion of consolidated results of operations and segment results refers to the thirteen weeks ended September 27, 2025 compared to the thirteen weeks ended September 28, 2024.

Consolidated results of operations should be read in conjunction with segment results of operations.

Net sales decreased by $36.7 million, or 3.0%, primarily due to lower sales volume in the U.S.

as well as in our international markets ($35.8 million), partially offset by higher product pricing (including price increases implemented to offset or partially offset tariff impacts) and lower customer sales incentives.

Net sales decreased by $6.1 million, or 0.5%, primarily due to sales volume decreases in China of $14.5 million.

The remaining decreases were due to lower sales volume, partially offset by disciplined pricing actions, including strategic adjustments to mitigate tariff-related costs.

Net sales were favorably impacted by foreign exchange of $1.2 million.

Cost of products sold

Cost of products sold decreased by $38.9 million, or 5.6%, primarily due to the lower sales volume, lower transportation costs and productivity improvements in all of our segments as a result of strategic sourcing initiatives and manufacturing efficiencies, partially offset by significant cost inflation.

Cost of products sold increased by $4.3 million, or 0.7%, primarily due to material cost inflation, including tariff costs, higher transportation costs, partially offset by the lower sales volume and continued productivity gains across the segments, supported by strategic sourcing initiatives and manufacturing efficiencies.

Cost of products sold also includes a loss, net of insurance recovery, of $3.0 million relating to a fire in a portion of a manufacturing facility in the Outdoors segment.

Selling, general and administrative expenses

Selling, general and administrative expenses increased by $19.1 million, or 6.0%, primarily due to higher restructuring-related charges ($12.2 million), higher distribution costs and higher customer credit losses, partially offset by lower headcount-related expenses.

Selling, general and administrative expenses increased by $15.0 million, or 5.0%, primarily due to higher restructuring-related charges of $12.3 million, distribution costs, and professional fees, partially offset by reductions to incentive compensation.

Asset impairment charges

During the thirteen weeks ended September 27, 2025, we determined one of our assets within the Outdoors segment, met the criteria to be classified as held-for-sale.

An impairment charge of $49.7 million was recorded to reduce the carrying value of the asset to equal fair value, less estimated costs to sell.

Restructuring charges

Restructuring charges of $13.7 million in the thirteen weeks ended June 28, 2025 are primarily attributable to costs associated with the decision to consolidate our U.S.

regional offices into one campus headquarters and related organizational and personnel changes as well as headcount-reduction actions across all segments.

Restructuring charges of $10.8 million in the thirteen weeks ended September 27, 2025 are primarily due to costs incurred in connection within the Company's headquarters consolidation and its related organizational changes.

Operating income

Operating income decreased by $27.5 million, or 13.8%, primarily due to the lower sales volume and higher restructuring and restructuring-related charges ($11.5 million), partially offset by lower transportation costs and productivity improvements in all of our segments as a result of strategic sourcing initiatives and manufacturing efficiencies as well as lower headcount-related costs.

Operating income decreased by $79.2 million, or 38.6%, primarily due to lower sales volume, material cost inflation, asset impairment charges of $50.1 million, higher restructuring and restructuring-related charges of $15.6 million, and higher distribution costs, partially offset by continued productivity gains across the segments, supported by strategic sourcing initiatives and manufacturing efficiencies, as well as reductions to incentive compensation.

Interest expense

Interest expense decreased by $1.1 million, or 3.4%, primarily due to lower interest rates on current-period commercial paper borrowings, partially offset by higher commercial paper borrowings net of repayments during the thirteen weeks ended June 28, 2025, as compared to the thirteen weeks ended June 29, 2024 ($358.0 million of net borrowings in 2025 versus $269.0 million of net repayments in 2024).

Other income, net

Other income, net, was $7.3 million in the thirteen weeks ended June 28, 2025, compared to $3.7 million in the thirteen weeks ended June 29, 2024.

The increase in other income, net is primarily due to a decrease in foreign currency transaction expense ($3.9 million), partially offset by an increase in net periodic benefit expense ($2.3 million).

The effective income tax rates for the thirteen weeks ended June 28, 2025 and thirteen weeks ended June 29, 2024 were 32.1% and 21.5%, respectively.

The difference between the Company’s effective income tax rate for the thirteen weeks ended June 28, 2025, and the U.S.

The difference between the Company’s effective income tax rate for the thirteen weeks ended June 29, 2024, and the U.S.

statutory rate of 21% primarily relates to state income taxes and foreign income taxed at higher rates, partially offset by a favorable benefit related decreases in uncertain tax positions and tax credits.

Net income was $100.3 million in the thirteen weeks ended June 28, 2025, compared to $133.9 million in the thirteen weeks ended June 29, 2024.

The decrease in net income was due to lower operating income ($27.5 million) and higher income tax expense ($10.8 million), partially offset by higher other income ($3.6 million).

Interest expense decreased by $1.6 million, or 5.3%, primarily due to lower interest rates on current-period commercial paper borrowings and lower unsecured senior notes outstanding.

Other (income) expense, net

Other (income) expense, net, was $2.6 million in the thirteen weeks ended September 27, 2025, compared to $(1.6) million in the thirteen weeks ended September 28, 2024.

The decrease of $4.2 million in other (income) expense, net is primarily due to an increase in net periodic benefit expense of $2.0 million, and increase in foreign currency transaction expense of $1.0 million and a decrease in interest and investment income of $0.5 million.

The effective income tax rates for the thirteen weeks ended September 27, 2025 and thirteen weeks ended September 28, 2024 were 25.3% and 22.6%, respectively.

The difference between the Company’s effective income tax rate for the thirteen weeks ended September 27, 2025, and the U.S.

statutory rate of 21% primarily relates to state income taxes and foreign income taxed at higher rates, partially offset by provision to return adjustments.

The difference between the Company’s effective income tax rate for the thirteen weeks ended September 28, 2024, and the U.S.

statutory rate of 21% primarily relates to state income taxes and foreign income taxed at higher rates, partially offset by favorable benefits related to provision to return adjustments and tax credits.

Net income was $70.8 million in the thirteen weeks ended September 27, 2025, compared to $136.6 million in the thirteen weeks ended September 28, 2024.

Results By Segment

Net sales decreased by $12.7 million, or 1.9%, primarily due to lower sales unit volume (including a sales volume decline within our China business of approximately $24.7 million), partially offset by higher product pricing (including price increases implemented to offset or partially offset tariff impacts) and lower customer sales incentives.

Operating income increased by $5.1 million, or 3.4%, primarily due to higher product pricing (including price increases implemented to offset or partially offset tariff impacts), lower customer sales incentives, and productivity improvements as a result of strategic sourcing initiatives and manufacturing efficiencies, partially offset by lower sales volume and higher restructuring and restructuring-related charges ($7.0 million).

Net sales decreased by $10.6 million, or 2.7%, primarily due to lower sales unit volume, partially offset by higher product pricing (including those related to tariffs).

Operating income decreased by $9.7 million, or 18.7%, primarily due to the lower sales unit volume and material cost inflation, partially offset by lower restructuring and restructuring-related charges ($5.0 million), higher product pricing (including those related to tariffs) and productivity improvements as a result of strategic sourcing initiatives and manufacturing efficiencies.

Net sales decreased by $13.4 million, or 7.0%, primarily due to lower sales unit volume, partially offset by favorable foreign exchange ($0.6 million).

Operating income decreased by $11.7 million, or 34.0%, primarily due to the lower sales unit volume and higher restructuring and restructuring-related charges ($1.8 million).

Corporate expenses increased by $11.2 million, or 29.5%, primarily due to higher restructuring and restructuring-related charges ($7.7 million) as well as higher professional fees.

Net sales decreased by $16.6 million, or 2.6%, primarily due to sales volume decreases in China of $14.5 million.

The remaining decreases were due to lower sales unit volume, partially offset by disciplined pricing actions across our portfolio, including strategic adjustments to mitigate tariff-related costs.

Operating income decreased by $5.5 million, or 3.6%, primarily due to lower sales volume, material cost inflation, including tariff costs, partially offset by manufacturing efficiencies and lower selling, general and administrative expenses, including reductions to incentive compensation.

Net sales increased by $1.8 million, or 0.5%, primarily due to disciplined pricing actions, including strategic adjustments to mitigate tariff-related costs, partially offset by lower sales unit volume.

Operating income decreased by $62.8 million, or 108.7%, due to higher material costs, including tariff costs, lower sales unit volume, product mix and higher restructuring and restructuring-related charges of $1.5 million, partially offset by manufacturing efficiencies.

Net sales increased by $8.7 million, or 4.9%, primarily due to disciplined pricing actions, including strategic adjustments to mitigate tariff-related costs, partially offset by lower sales unit volume.

Net sales was favorably impacted by foreign exchange of $0.9 million.

Operating income decreased by $5.3 million, or 16.1%, primarily due to lower sales unit volume, product mix and higher restructuring and restructuring-related charges of $4.2 million.

Corporate expenses increased by $5.6 million, or 15.1%, primarily due to higher restructuring and restructuring-related charges of $9.7 million, and higher professional fees, partially offset by reductions to incentive compensation.

LIQUIDITY AND CAPITAL RESOURCES

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Our operating income is generated by our subsidiaries.

We believe our operating cash flows, including funds available under the credit facility and access to capital markets, provide sufficient liquidity to support the Company’s working capital requirements, capital expenditures and service of indebtedness, as well as to finance acquisitions, repurchase shares of our common stock and pay dividends to stockholders, as the Board of Directors deems appropriate both for the 12-month period following June 28, 2025, and in the long-term.

Our cash flows from operations, borrowing availability and overall liquidity are subject to certain risks and uncertainties, including those described in the section of our Annual Report on Form 10-K for the year ended December 28, 2024 entitled “Item 1A.

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In June 2025, we repaid our 4.000% senior unsecured notes issued in June 2015 at their maturity date using a combination of cash on hand and commercial paper borrowings.

At June 28, 2025, the Company had aggregate outstanding notes in the principal amount of $2.2 billion, with varying maturities (the “Notes”).

At September 27, 2025, the Company had aggregate outstanding notes in the principal amount of $2.2 billion, with varying maturities (the “Notes”).

The Notes are unsecured senior obligations of the Company.

In addition, we believe that we have the ability to obtain alternative sources of financing if required.

The following table provides a summary of the Company’s outstanding Notes, including the net carrying value of the Notes, net of underwriting commissions, price discounts and debt issuance costs as of June 28, 2025 and December 28, 2024:

Net Carrying Value

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Maturity Date

June 28, 2025

September 27, 2025

December 28, 2024

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In addition, the Company's ratio of consolidated debt minus certain cash and cash equivalents to consolidated EBITDA generally may not exceed 3.5 to 1.0.

There were no outstanding borrowings under this facility as of June 28, 2025 and December 28, 2024.

As of June 28, 2025, we were in compliance with all covenants under this facility.

We currently have uncommitted bank lines of credit in China, which provide for unsecured borrowings for working capital of up to $30.5 million in aggregate as of June 28, 2025 and December 28, 2024, respectively.

There were no outstanding balances as of June 28, 2025 and December 28, 2024.

There were no outstanding borrowings under this facility as of September 27, 2025 and December 28, 2024.

As of September 27, 2025, we were in compliance with all covenants under this facility.

We currently have uncommitted bank lines of credit in China, which provide for unsecured borrowings for working capital of up to $30.5 million in aggregate as of September 27, 2025 and December 28, 2024, respectively.

There were no outstanding balances as of September 27, 2025 and December 28, 2024.

Commercial Paper

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The Company expects to use any issuances under the Commercial Paper Program for general corporate purposes.

Outstanding borrowings under the Commercial Paper Program as of June 28, 2025 and December 28, 2024 were $637.4 million and zero, respectively.

Outstanding borrowings under the Commercial Paper Program as of September 27, 2025 was $479.0 million.

No amounts were outstanding as of December 28, 2024.

Cash and Seasonality

On June 28, 2025, we had non-restricted cash and cash equivalents of $234.7 million, of which $187.2 million was held at non-U.S.

On September 27, 2025, we had non-restricted cash and cash equivalents of $227.4 million, of which $191.1 million was held at non-U.S.

subsidiaries.

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Share Repurchases and Dividends

In the twenty-six weeks ended June 28, 2025, we repurchased 3.8 million shares of our outstanding common stock under the Company’s share repurchase program for $237.8 million.

As of June 28, 2025, the Company’s total remaining share repurchase authorization under its share repurchase program was approximately $837.2 million.

In the thirty-nine weeks ended September 27, 2025, we repurchased 3.8 million shares of our outstanding common stock under the Company’s share repurchase program for $237.8 million.

As of September 27, 2025, the Company’s total remaining share repurchase authorization under its share repurchase program was approximately $837.2 million.

The share repurchase program does not obligate the Company to repurchase any specific dollar amount or number of shares and may be suspended or discontinued at any time.

In the twenty-six weeks ended June 28, 2025, we paid dividends in the amount of $60.6 million to the Company’s stockholders.

In the thirty-nine weeks ended September 27, 2025, we paid dividends in the amount of $90.6 million to the Company’s stockholders.

Our Board of Directors will continue to evaluate dividend payment opportunities on a quarterly basis.

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Our subsidiaries are not limited by long-term debt or other agreements in their abilities to pay cash dividends or to make other distributions with respect to their capital stock or other payments to the Company.

On July 16, 2025, the Company's Board declared a cash dividend of $0.25 per common share payable on September 10, 2025 to stockholders of record at the close of business on August 22, 2025.

On February 29, 2024, we acquired 100% of the outstanding equity interests of Wise Water Solutions, LLC, doing business as Springwell Water Filtration Systems ("SpringWell") for a purchase price of $105.6 million, net of cash acquired of $1.4 million.

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We periodically review our portfolio of brands and evaluate potential strategic transactions and other capital initiatives to increase stockholder value.

Below is a summary of cash flows for the twenty-six weeks ended June 28, 2025 and June 29, 2024.

Below is a summary of cash flows for the thirty-nine weeks ended September 27, 2025 and September 28, 2024.

'(In millions)

Twenty-Six Weeks Ended

June 28, 2025

Twenty-Six Weeks Ended June 29, 2024

Thirty-Nine Weeks Ended

September 27, 2025

Thirty-Nine Weeks Ended September 28, 2024

Net cash provided by operating activities

Net cash used in investing activities

Net cash (used in) provided by financing activities

Net cash used in financing activities

Effect of foreign exchange rate changes on cash

Net decrease in cash and cash equivalents

Net cash provided by operating activities was $66.0 million in the twenty-six weeks ended June 28, 2025, compared to net cash provided by operating activities of $190.2 million in the twenty-six weeks ended June 29, 2024.

The decrease in cash provided of $124.2 million was primarily due to lower net income in 2025 and an increase in accounts receivable and inventory balances compared to the prior period, partially offset by an increase in accrued expenses and other liabilities.

Net cash used in investing activities was $57.0 million in the twenty-six weeks ended June 28, 2025, compared to net cash used in investing activities of $230.2 million in the twenty-six weeks ended June 29, 2024.

The decrease in cash used of $173.2 million primarily relates to a decrease in acquisition activity in 2025 and lower capital expenditures in 2025 as compared to 2024.

Net cash used in financing activities was $165.3 million in the twenty-six weeks ended June 28, 2025, compared to net cash provided by financing activities of $9.7 million in the twenty-six weeks ended June 29, 2024.

The increase in cash used of $175 million was primarily due to higher net debt repayments in 2025 as compared to 2024 ($90.0 million) and higher share repurchases in 2025 compared to 2024 ($87.6 million).

Net cash provided by operating activities was $270.4 million in the thirty-nine weeks ended September 27, 2025, compared to net cash provided by operating activities of $395.5 million in the thirty-nine weeks ended September 28, 2024.

The decrease in cash provided of $125.1 million was primarily due to lower net income in 2025 and an increase in accounts receivable and inventory balances compared to the prior period, partially offset by an increase in accounts payable and accrued expenses and other liabilities.

Net cash used in investing activities was $84.4 million in the thirty-nine weeks ended September 27, 2025, compared to net cash used in investing activities of $258.7 million in the thirty-nine weeks ended September 28, 2024.

The decrease in cash used of $174.3 million primarily relates to the absence of acquisition-related outflows in 2025 and lower capital expenditures in 2025 as compared to 2024.

Net cash used in financing activities was $352.6 million in the thirty-nine weeks ended September 27, 2025, compared to net cash used in financing activities of $183.1 million in the thirty-nine weeks ended September 28, 2024.

The increase in cash used of $169.5 million was primarily due to higher net debt repayments in 2025 as compared to 2024 of $125.0 million and higher share repurchases in 2025 compared to 2024 of $47.4 million.

Pension Plans

1 unchanged sentence

As of December 28, 2024, the fair value of our total pension plan assets was $177.1 million, representing funding of approximately 95% of the accumulated qualified benefit obligation liability.

During the twenty-six weeks ended June 28, 2025, we made no pension contributions.

During the thirty-nine weeks ended September 27, 2025, we made no pension contributions.

For the foreseeable future, we believe that we have sufficient liquidity to meet the minimum funding that may be required by the Pension Protection Act of 2006.

7 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis