What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-10-31 compared with 2025-08-01 · 144 added, 134 removed, 208 unchanged (57% of the section changed)

48 unchanged sentences

During 2024, the Company fully deployed its strategy, transitioned to a new operating model, rebuilt its front-end capabilities and continued with its simplification agenda.

This strategy is beginning to yield tangible results as evidenced by improving trends in net sales and gross margin expansion.

The Company is implementing this strategy while continuing to address key global challenges such as shifting consumer preferences and behaviors;

18 unchanged sentences

As part of the Realignment Plan, the Company has made several operating model changes, which entailed:

standing up a cross-functional brand management organization, realigning business unit finance to fully support the new global brand management model, further simplifying and standardizing regional go-to-market organizations, and centralizing domestic retail sales teams, the digital technology team, business-aligned accounting personnel, the Manufacturing

Quality team, and the Human Resources functions into the appropriate center-led teams to drive standardization, efficiency and scale with a One Newell approach.

scale with a One Newell approach.

The Company has also further optimized the Company’s real estate footprint and pursued other cost reduction initiatives.

18 unchanged sentences

There will be a timing difference between the operating cash outflow and the recognition of cost of products sold arising from the tariffs.

As a result, the Company anticipates recognizing approximately $105 million of incremental costs of products sold (including $10 million in the second quarter) in the Statement of Operations in 2025.

As a result, the Company anticipates recognizing approximately $115 million of incremental costs of products sold (including $10 million in the second quarter and $55 million in the third quarter) in the Consolidated Statement of Operations in 2025.

The Company continues to deploy a mitigation strategy designed to offset the impact of this tariff exposure through a number of actions, including pricing, productivity and in some cases relocation of manufacturing.

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tariffs, retaliatory actions taken by other countries, or failure to effectively deploy the Company’s mitigation plans could have a significant negative impact on the Company.

Debt Issuance and Redemption

In May 2025, the Company completed the offering and sale of $1.25 billion of 8.500% senior notes due 2028 (the “2028 Notes”) and received proceeds of approximately $1.23 billion, net of fees and expenses paid.

The Company used the proceeds of the offering to fully redeem its outstanding 4.200% senior notes due 2026 (the “2026 Notes”) at a redemption price equal to 100.757% of the outstanding aggregate principal amount of the notes, plus accrued unpaid interest to the redemption date.

The total consideration was approximately $1.25 billion.

As a result of the redemption, the Company recorded a loss on debt extinguishment of $13 million.

Debt Rating Downgrades

During the second quarter of 2025, Moody’s Corporation (“Moody’s”) and S&P Global Inc.

(“S&P”) downgraded the Company’s senior unsecured debt rating to “B1” and “B+”, respectively.

As a result, certain of the Company’s outstanding senior notes are subject to an interest rate adjustment of 25 basis points for each downgrade, or 50 basis points in the aggregate, with such adjustments to take effect in the fourth quarter of this year.

The change to the interest rate due to the downgrades will increase the Company’s interest expense by approximately $5 million on an annualized basis (approximately $1 million in 2025).

See Footnote 8 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information on debt issuance and redemption as well as the debt rating downgrades.

Sale of Equity Interest in Joint Venture

In August 2025, the Company sold its equity interest in a joint venture for approximately $22 million, subject to customary working capital and other post-closing adjustments, and recorded a pretax gain of approximately $12 million, which was included in other (income) expense, net in the Condensed Consolidated Statements of Operations.

Results of Operations

Three Months Ended June 30, 2025 vs.

Three Months Ended June 30, 2024

Three Months Ended September 30, 2025 vs.

Three Months Ended September 30, 2024

Consolidated Operating Results

Three Months Ended June 30,

Three Months Ended September 30,

(in millions) 2025

3 unchanged sentences

Gross margin 34.1 % 34.9 %

Operating income 171 163 8 4.9%

Operating income (loss) 119 (121) 240 NM

Operating margin 6.6 % (6.2) %

Interest expense, net 83 75 8 10.7%

Loss on extinguishment and modification of debt 13 — 13 100.0%

Other expense, net 5 1 4 NM

Income before income taxes 71 84 (13) (15.5)%

Income tax provision 25 39 (14) (35.9)%

Other (income) expense, net (6) 9 (15) NM

Income (loss) before income taxes 42 (205) 247 NM

Income tax provision (benefit) 21 (7) 28 NM

Income tax rate 50.0 % 3.4 %

Net income $ 46 $ 45 $ 1 2.2%

Diluted earnings per share $ 0.11 $ 0.11

Net income (loss) $ 21 $ (198) $ 219 NM

Diluted earnings (loss) per share $ 0.05 $ (0.48)

NM - NOT MEANINGFUL

Net sales for the three months ended June 30, 2025 decreased 5%.

Net sales were unfavorably impacted by continued softness in global demand across all segments and net distribution losses in the H&CS and O&R segments.

These unfavorable factors were partially mitigated by launches of product innovations in the H&CS and L&D segments and to a lesser extent in the O&R segment.

In addition, pricing actions, including actions to mitigate recently announced tariffs, and shipment timing ahead of the back-to-school season in the L&D segment favorably impacted net sales.

Changes in foreign currency unfavorably impacted net sales by $4 million, or less than 1%.

Net sales for the three months ended September 30, 2025 decreased 7%.

Net sales were unfavorably impacted primarily by continued softness in global demand in the H&CS segment.

In addition, net sales were unfavorably impacted by reduced retailer inventory levels primarily in the L&D segment and to a lesser extent in the H&CS segment.

These unfavorable factors were partially mitigated by launches of product innovations in the H&CS and L&D segments.

Changes in foreign currency favorably impacted net sales by $11 million, or less than 1%.

Gross profit decreased 9% compared to the prior year.

Gross margin improved to 35.4% as compared with 34.4% in the prior year.

The improvement in gross margin was driven by gross productivity, pricing actions and lower restructuring-related charges of approximately $6 million, partially offset by the volume impact of lower sales and inflation.

Gross margin declined to 34.1% as compared with 34.9% in the prior year.

The impact of lower sales volume, additional tariffs of approximately $55 million, inflation and approximately $6 million of costs associated with a product recall in the H&CS segment, were partially offset by gross productivity, pricing actions and lower restructuring-related charges of approximately $13 million.

Changes in foreign currency exchange rates favorably impacted gross profit by $2 million, or less than 1%.

Notable items, other than those noted above, impacting operating income for the three months ended June 30, 2025 and 2024 were as follows:

Three Months Ended June 30,

Notable items, other than those noted above, impacting operating income (loss) for the three months ended September 30, 2025 and 2024 were as follows (in millions):

Three Months Ended September 30,

2025 2024 $ Change

Restructuring and restructuring-related costs (See Footnote 3 ) (1)

Impairment of intangible assets (1)

$ — $ 260 $ (260)

Restructuring and restructuring-related costs (2)

Transaction costs and other (3)

(1) For the three months ended June 30, 2025, restructuring-related costs reported in cost of products sold and selling, general and administrative expenses (“SG&A”) were $1 million and $5 million, respectively, and primarily relate to facility closures associated with various discrete initiatives as well as previously disclosed but substantially completed restructuring activities.

For the three months ended June 30, 2024, restructuring-related costs reported in cost of products sold, SG&A and impairment of other assets were $7 million, $3 million and $6 million, respectively, primarily related to facility closures associated with previously disclosed Network Optimization Project and Project Phoenix, as well as the Realignment Plan and other discrete initiatives.

Restructuring costs were $6 million and $10 million for the three months ended June 30, 2025 and 2024, respectively, primarily related to the Realignment Plan.

(2) Transaction costs and other for the three months ended June 30, 2025 primarily related to hyperinflationary currency movements.

For the three months ended June 30, 2024 transaction and other costs related to hyperinflationary currency movements and to accelerated amortization and write-off of other assets associated with integration projects.

Operating income was $171 million as compared to $163 million in the prior year period.

The increase reflects the impact of savings from restructuring actions primarily related to the Realignment Plan, lower restructuring and restructuring-related charges of approximately $8 million and lower advertising and promotion costs of $4 million, partially offset by lower gross profit of $14 million.

(1) The three months ended September 30, 2024 includes non-cash impairment charges of $190 million and $70 million for certain indefinite-lived tradenames in the H&CS and L&D segments, respectively.

See Footnote 6 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

(2) For the three months ended September 30, 2025, restructuring-related costs reported in selling, general and administrative expenses (“SG&A”) were $3 million and primarily relate to facility closures associated with various discrete initiatives as well as previously disclosed but substantially completed restructuring activities.

For the three months ended September 30, 2024, restructuring-related costs reported in cost of products sold and SG&A were $13 million and $5 million, respectively, primarily related to facility closures associated with previously disclosed Network Optimization Project and Project Phoenix, as well as the Realignment Plan and other discrete initiatives.

Restructuring costs were $5 million and $4 million for the three months ended September 30, 2025 and 2024, respectively, primarily related to the Realignment Plan.

See Footnote 3 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

(3) Transaction costs and other for the three months ended September 30, 2025 includes expenses for certain legal proceedings and completed divestitures, costs of a product recall (see Footnote 14 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information), fire-related losses and hyperinflationary currency movements.

For the three months ended September 30, 2024 transaction and other costs related to hyperinflationary currency movements and to accelerated amortization and write-off of other assets associated with integration projects.

Operating income was $119 million as compared to operating loss of $121 million in the prior year period.

The operating results in the prior year period included non-cash impairment charges of $260 million for certain indefinite-lived tradenames in the H&CS and L&D segments.

The improvement in the current period also reflects the impact of savings from restructuring actions primarily related to the Realignment Plan and lower incentive compensation expense of approximately $36 million, partially offset by lower gross profit of $63 million and higher advertising and promotion costs of $6 million.

Interest expense, net increased by $8 million due to higher interest rates and lower interest income.

The weighted average interest rates for the three months ended June 30, 2025 and 2024 were approximately 6.3% and 6.0%, respectively.

The loss on extinguishment of debt of $13 million is related to the redemption of the Company’s 2026 Notes during June 2025.

See Footnote 8 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information on interest expense and loss on extinguishment of debt.

Other expense, net for the three months ended June 30, 2025 and 2024 includes the following items:

Three Months Ended June 30,

Foreign exchange (gains) losses, net $ 1 $ (1)

The weighted average interest rates for the three months ended September 30, 2025 and 2024 were approximately 6.6% and 5.8%, respectively.

See Footnote 8 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

Other (income) expense, net for the three months ended September 30, 2025 and 2024 includes the following items (in millions):

Three Months Ended September 30,

Foreign exchange losses, net $ 6 $ 6

(Gain) loss on disposition of businesses and investments (12) 2

Discount on factored receivables and other, net — 1

The income tax provision for the three months ended June 30, 2025 was $25 million as compared to $39 million for the three months ended June 30, 2024.

The Company’s effective income tax rates for the three months ended June 30, 2025 and 2024 were provision of 35.2% and 46.4% respectively, primarily due to a decrease in the forecasted tax rate for 2025 that was mainly driven by improved forecasted pretax book income year over year.

During the three months ended September 30, 2025, the Company sold its equity interest in a joint venture and realized a pretax gain of $12 million.

The income tax provision for the three months ended September 30, 2025 was $21 million as compared to benefit of $7 million for the three months ended September 30, 2024.

The Company’s effective income tax rates for the three months ended September 30, 2025 and 2024 were provision of 50.0% and benefit of 3.4% respectively.

The increase in the tax rate is primarily due to a decrease in discrete benefits in the current period and lower forecasted pretax book income for 2025.

In periods where forecasted pretax income is relatively low, the proportional impact of these items on the effective rate may be significant.

See Footnote 10 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

1 unchanged sentence

Home and Commercial Solutions

Three Months Ended June 30,

Three Months Ended September 30,

(in millions) 2025 2024 $ Change % Change

Net sales $ 942 $ 1,047 $ (105) (10.0)%

Operating income 24 48 (24) (50.0)%

Operating income (loss) 40 (94) 134 NM

Operating margin 4.2 % (9.0) %

H&CS net sales for the three months ended June 30, 2025 decreased 7%, driven by the Kitchen and, to a lesser extent the Commercial business, primarily due to soft global demand and distribution losses.

Business exits across the segment also unfavorably impacted net sales by approximately 1%.

Pricing actions, including actions to mitigate recently announced tariffs, and contributions from new product launches primarily in the Kitchen and Home Fragrance businesses, partially offset these unfavorable factors.

Changes in foreign currency unfavorably impacted net sales by approximately $9 million, or 1%.

Operating income for the three months ended June 30, 2025 was $24 million as compared to $48 million in the prior year.

The decrease in operating income is due to lower gross profit of $19 million, primarily resulting from unfavorable fixed cost leverage associated with the lower sales volume and inflation, as well as approximately $4 million increase in restructuring-related charges.

These unfavorable impacts were partially offset by savings from restructuring actions primarily related to the Realignment Plan.

NM - NOT MEANINGFUL

H&CS net sales for the three months ended September 30, 2025 decreased 10%.

The net sales decrease in H&CS was driven by soft global demand in the Kitchen business and distribution losses in the Commercial business, as well as the timing of retailer orders for relaunched Home Fragrance products and a decrease in the Company’s retail store sales.

In addition, business exits primarily in the Kitchen business unfavorably impacted net sales by approximately 1%.

These unfavorable factors were partially mitigated by launches of product innovations.

Changes in foreign currency favorably impacted net sales by approximately $5

million, or less than 1%.

Operating income for the three months ended September 30, 2025 was $40 million as compared to operating loss of $94 million in the prior year.

The improvement in operating results is primarily due to the absence of $190 million of non-cash impairment charge for an indefinite-lived tradename in the prior year and savings from restructuring actions mostly related to the Realignment Plan, partially offset by lower gross profit of $53 million, primarily due to the impact of lower sales volume, additional tariffs and inflation.

Learning and Development

Three Months Ended June 30,

Three Months Ended September 30,

(in millions) 2025 2024 $ Change % Change

2 unchanged sentences

Operating margin 18.2 % 10.5 %

L&D net sales for the three months ended June 30, 2025 decreased less than 1%.

Net sales in the Writing business increased primarily due to net distribution gains, pricing actions and contributions from launches of product innovations, as well as the timing of back-to-school shipments.

Net sales in the Baby business declined primarily due to soft demand in certain markets and net distribution losses, partially offset by pricing actions, including actions to mitigate recently announced tariffs, and contributions from launches of product innovations.

Changes in foreign currency favorably impacted net sales by approximately $1 million, or less than 1%.

Operating income for the three months ended June 30, 2025 decreased to $202 million as compared to $205 million in the prior-year period.

The decrease in operating income is primarily due to lower gross profit of $7 million, reflecting the impact of lower net sales and inflation, partially offset by gross productivity.

The decrease in gross profit was partially offset by lower advertising and promotion costs of approximately $4 million, as well as savings from restructuring actions primarily related to the Realignment Plan.

L&D net sales for the three months ended September 30, 2025 decreased 5%.

Net sales in the Writing business decreased primarily due to softer international demand and to a lesser extent, a shift of certain order activity to the second quarter, partially offset by contributions from launches of product innovations.

Net sales in the Baby business declined primarily due to retailer inventory actions, including delivery preferences shifting away from direct import, partially offset by contributions from launches of product innovations.

Changes in foreign currency favorably impacted net sales by approximately $4 million, or 1%.

Operating income for the three months ended September 30, 2025 increased to $124 million as compared to $75 million in the prior-year period.

The increase in operating income is primarily due to the absence of $70 million of non-cash impairment charge for an indefinite-lived tradename in the prior year as well as savings from restructuring actions primarily related to the Realignment Plan.

These favorable drivers were partially offset by lower gross profit of $19 million, reflecting the impact of lower net sales, additional tariffs and inflation.

Outdoor and Recreation

Three Months Ended June 30,

Three Months Ended September 30,

(in millions) 2025 2024 $ Change % Change

Net sales $ 183 $ 183 $ — —%

Operating income (loss) 8 (11) 19 NM

Operating loss (8) (23) 15 65.2%

Operating margin (4.4) % (12.6) %

NM - NOT MEANINGFUL

O&R net sales for the three months ended June 30, 2025 decreased 9% primarily due to distribution losses, soft demand and to a lesser extent, business exits.

These declines were partially offset by pricing actions, including actions to mitigate recently announced tariffs, and contribution from the launches of product innovation.

O&R net sales for the three months ended September 30, 2025 remained relatively unchanged compared to the same period last year, as soft global demand and business exits were partially offset by contributions from product innovations.

Changes in foreign currency favorably impacted net sales by approximately $2 million, or 1%.

Operating income for the three months ended June 30, 2025 was $8 million as compared to operating loss of $11 million in the prior-year period.

Operating loss for the three months ended September 30, 2025 was $8 million as compared to $23 million in the prior-year period.

The improvement in operating performance was mainly due to higher gross profit of $9 million driven primarily by gross productivity, pricing actions and mix.

1 unchanged sentence

Results of Operations

Six Months Ended June 30, 2025 vs.

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2025 vs.

Nine Months Ended September 30, 2024

Consolidated Operating Results

Six Months Ended June 30,

Nine Months Ended September 30,

(in millions) 2025

3 unchanged sentences

Gross margin 34.0 % 33.4 %

Operating income 192 179 13 7.3%

Operating income 311 58 253 NM

Operating margin 5.9 % 1.0 %

2 unchanged sentences

Other expense, net 3 15 (12) (80.0)%

Income before income taxes 16 24 (8) (33.3)%

Income (loss) before income taxes 58 (181) 239 NM

Income tax provision (benefit) 28 (19) 47 NM

Income tax rate 48.3 % 10.5 %

Net income $ 9 $ 36 $ (27) (75.0)%

Diluted earnings per share $ 0.02 $ 0.09

Net income (loss) $ 30 $ (162) $ 192 NM

Diluted earnings (loss) per share $ 0.07 $ (0.39)

NM - NOT MEANINGFUL

Net sales for the six months ended June 30, 2025 decreased approximately 5%.

Net sales were unfavorably impacted by soft global demand across all segments and net distribution losses in the H&CS and O&R segments.

Business exits, primarily in the H&CS and O&R segments also unfavorably impacted net sales.

Net sales for the nine months ended September 30, 2025 decreased approximately 6%.

Net sales were unfavorably impacted by soft global demand across all segments.

Business exits, primarily in the H&CS segment also unfavorably impacted net sales.

In addition, net sales were also unfavorably impacted by reduced retailer inventory levels primarily in the L&D segment.

These unfavorable factors were partially mitigated by launches of product innovations in the H&CS and L&D segments and to a lesser extent in the O&R segment.

In addition, pricing actions and shipment timing ahead of back-to-school season in the L&D segment favorably impacted net sales.

Changes in foreign currency unfavorably impacted net sales by $37 million, or 1%.

1 unchanged sentence

Gross margin improved to 34.0% as compared with 33.4% in the prior year.

The improvement in gross margin was driven by gross productivity, pricing and lower restructuring-related charges of approximately $11 million, or 1%, partially offset by the volume impact of lower sales and inflation.

Changes in foreign currency exchange rates unfavorably impacted gross profit by $8 million, or 1%.

Notable items, other than those noted above, impacting operating income for the six months ended June 30, 2025 and 2024 were as follows:

Six Months Ended June 30,

The improvement in gross margin was driven by gross productivity, pricing and lower restructuring-related charges of approximately $24 million, partially offset by the volume impact of lower sales, additional tariffs of approximately $65 million and inflation.

Changes in foreign currency exchange rates unfavorably impacted gross profit by $6 million, or less than 1%.

Notable items, other than those noted above, impacting operating income for the nine months ended September 30, 2025 and 2024 were as follows (in millions):

Nine Months Ended September 30,

2025 2024 $ Change

Restructuring and restructuring-related costs (See Footnote 3 ) (1)

Impairment of intangible assets (1)

$ — $ 260 $ (260)

Restructuring and restructuring-related costs (2)

Transaction costs and other (3)

(1) For the six months ended June 30, 2025, restructuring-related costs reported in cost of products sold and SG&A were $4 million and $16 million, respectively, and primarily relate to facility closures associated with various discrete initiatives as well as previously announced but substantially completed restructuring activities.

For the six months ended June 30, 2024, restructuring-related costs reported in cost of products sold, SG&A and impairment of other assets were $15 million, $8 million and $6 million, respectively, primarily related to facility closures associated with previously disclosed Network Optimization Project and Project Phoenix, as well as the Realignment Plan and other discrete initiatives.

Restructuring costs were $17 million and $36 million for the six months ended June 30, 2025 and 2024, respectively, primarily related to the Realignment Plan.

(2) Transaction costs and other for the six months ended June 30, 2025 primarily related to hyperinflationary currency movements.

For the six months ended June 30, 2024 transaction and other costs primarily related to a release of a bad debt reserve due to a recovery of a receivable from an international customer, hyperinflationary currency movements and accelerated amortization and write-off of other assets associated with integration projects.

(1) The nine months ended September 30, 2024 includes non-cash impairment charges of $190 million and $70 million for certain indefinite-lived tradenames in the H&CS and L&D segments, respectively.

See Footnote 6 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

(2) For the nine months ended September 30, 2025, restructuring-related costs reported in cost of products sold and SG&A were $4 million and $19 million, respectively, and primarily relate to facility closures associated with various discrete initiatives as well as previously announced but substantially completed restructuring activities.

For the nine months ended September 30, 2024, restructuring-related costs reported in cost of products sold, SG&A and impairment of other assets were $28 million, $13 million and $6 million, respectively, primarily related to facility closures associated with previously disclosed Network Optimization Project and Project Phoenix, as well as the Realignment Plan and other discrete initiatives.

Restructuring costs were $22 million and $40 million for the nine months ended September 30, 2025 and 2024, respectively, primarily related to the Realignment Plan.

See Footnote 3 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

(3) Transaction costs and other for the nine months ended September 30, 2025 includes expenses for certain legal proceedings and completed divestitures, costs of a product recall (see Footnote 14 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information), fire-related losses and hyperinflationary currency movements.

For the nine months ended September 30, 2024 transaction and other costs primarily related to a release of a bad debt reserve due to a recovery of a receivable from an international customer, hyperinflationary currency movements and accelerated amortization and write-off of other assets associated with integration projects.

Operating income was $311 million as compared to $58 million in the prior year period.

The increase reflects the impact of savings from restructuring actions primarily related to the Realignment Plan, lower restructuring and restructuring-related charges of $17 million and lower amortization of tradenames of $4 million, partially offset by lower gross profit of $15 million.

The operating results in the prior year period included non-cash impairment charges of $260 million for certain indefinite-lived tradenames in the H&CS and L&D segments.

The improvement also reflects the impact of savings from restructuring actions primarily related to the Realignment Plan, lower incentive compensation expense of approximately $53 million, lower restructuring and restructuring-related charges of $18 million and lower amortization of tradenames of $5 million, partially offset by lower gross profit of $78 million and higher advertising and promotion costs of $5 million.

Interest expense, net increased by $14 million due to higher interest rates and lower interest income.

The weighted average interest rates for the six months ended June 30, 2025 and 2024 were approximately 6.2% and 5.8%, respectively.

The loss on extinguishment of debt of $13 million is related to the redemption of the Company’s 2026 Notes during June 2025.

The weighted average interest rates for the nine months ended September 30, 2025 and 2024 were approximately 6.3% and 5.8%, respectively.

The loss on extinguishment of debt of $13 million is related to the redemption of the Company’s 4.200% senior notes due 2026 (the “2026 Notes”) during June 2025.

See Footnote 8 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information on interest expense and loss on extinguishment of debt.

Other expense, net for six months ended June 30, 2025 and 2024 includes the following items:

Six Months Ended June 30,

Other expense, net for nine months ended September 30, 2025 and 2024 includes the following items (in millions):

Nine Months Ended September 30,

Foreign exchange losses, net $ 8 $ 8

Gain on disposition of businesses and investments (12) (1)

Discount on factored receivables and other, net 7 8

The income tax expense for the six months ended June 30, 2025 was $7 million as compared to benefit of $12 million for the six months ended June 30, 2024.

The Company’s effective income tax rates for the six months ended June 30, 2025 and 2024 were expense of 43.8% and benefit of 50.0% respectively, as the decrease in the forecasted rate for 2025 primarily driven by improved forecasted pretax book income was offset by a decrease in discrete benefits in the current year.

During the nine months ended September 30, 2025, the Company sold its equity interest in a joint venture and realized a pretax gain of $12 million.

The income tax provision for the nine months ended September 30, 2025 was $28 million as compared to benefit of $19 million for the nine months ended September 30, 2024.

The Company’s effective income tax rates for the nine months ended September 30, 2025 and 2024 were provision of 48.3% and benefit of 10.5% respectively.

The increase in the tax rate was primarily driven by decrease in discrete benefits in the current year and lower forecasted pretax book income for 2025.

In periods where forecasted pretax income is relatively low, the proportional impact of these items on the effective rate may be significant.

See Footnote 10 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

1 unchanged sentence

Home and Commercial Solutions

Six Months Ended June 30,

Nine Months Ended September 30,

(in millions) 2025 2024 $ Change % Change

Net sales $ 2,646 $ 2,902 $ (256) (8.8)%

Operating income 22 64 (42) (65.6)%

Operating income (loss) 62 (30) 92 NM

Operating margin 2.3 % (1.0) %

H&CS net sales for the six months ended June 30, 2025 decreased 8%, which reflected soft global demand across all businesses, primarily in the Kitchen business, as well as net distribution losses.

NM - NOT MEANINGFUL

H&CS net sales for the nine months ended September 30, 2025 decreased 9%, which reflected soft global demand across all businesses.

In addition, net sales were unfavorably impacted by distribution losses in the Commercial business, as well as the timing of retailer orders for relaunched Home Fragrance products and a decrease in the Company’s retail store sales.

Business exits also unfavorably impacted net sales by approximately 1%.

Pricing actions and contributions from new product launches, partially offset these unfavorable factors.

These unfavorable factors were partially mitigated by launches of product innovations.

Changes in foreign currency unfavorably impacted net sales by $32 million, or 1%.

Operating income for the six months ended June 30, 2025 was $22 million as compared to $64 million in the prior year.

The decrease in operating income is primarily due to lower gross profit of $34 million, resulting from unfavorable fixed cost leverage associated with lower sales volume and inflation, partially offset by gross productivity.

The decrease in gross profit was partially offset by savings from restructuring actions primarily related to the Realignment Plan and lower restructuring and restructuring-related charges of $5 million.

Operating income for the nine months ended September 30, 2025 was $62 million as compared to operating loss of $30 million in the prior year.

These favorable drivers were partially offset by lower gross profit of $87 million, resulting from unfavorable fixed cost leverage associated with lower sales volume, additional tariffs and inflation, partially offset by gross productivity.

Learning and Development

Six Months Ended June 30,

Nine Months Ended September 30,

(in millions) 2025 2024 $ Change % Change

2 unchanged sentences

Operating margin 20.6 % 17.9 %

L&D net sales for the six months ended June 30, 2025 increased approximately 1%.

Both the Baby and Writing businesses increased modestly due to net distribution gains, pricing actions and contributions from launches of product innovations, as well as favorable timing of back-to-school shipments in the Writing business.

Changes in foreign currency unfavorably impacted net sales by $10 million, or 1%.

Operating income for the six months ended June 30, 2025 increased to $300 million as compared to $299 million in the prior-year period.

Operating income increased modestly benefiting from gross productivity and pricing, savings from restructuring actions primarily related to the Realignment Plan, as well as lower restructuring and restructuring-related charges of approximately $7 million, partially offset by inflation.

L&D net sales for the nine months ended September 30, 2025 decreased approximately 1%.

Net sales in the Writing business decreased primarily due to softer demand, which was partially offset by contributions from launches of product innovations.

Changes in foreign currency unfavorably impacted net sales by $6 million, or less than 1%.

Operating income for the nine months ended September 30, 2025 increased to $424 million as compared to $374 million in the prior-year period.

These favorable drivers were partially offset by lower gross profit of approximately $19 million, primarily due to additional tariffs and inflation, partially offset by gross productivity and pricing.

Outdoor and Recreation

Six Months Ended June 30,

Nine Months Ended September 30,

(in millions) 2025 2024 $ Change % Change

Net sales $ 599 $ 642 $ (43) (6.7)%

Operating income (loss) 3 (29) 32 NM

Operating loss (5) (52) 47 90.4%

Operating margin (0.8) % (8.1) %

NM - NOT MEANINGFUL

O&R net sales for the six months ended June 30, 2025 decreased 9% primarily due to net distribution losses, soft global demand and business exits.

These declines were partially offset by pricing actions and contribution from launches of product innovation.

Changes in foreign currency unfavorably impacted net sales by $1 million, or less than 1%.

Operating income for the six months ended June 30, 2025 was $3 million as compared to operating loss of $29 million in the prior-year period.

O&R net sales for the nine months ended September 30, 2025 decreased 7% primarily due to net distribution losses, soft global demand and business exits.

These declines were partially offset by contribution from launches of product innovation.

Changes in foreign currency favorably impacted net sales by $1 million, or less than 1%.

Operating loss for the nine months ended September 30, 2025 was $5 million as compared to $52 million in the prior-year period.

The improvement in operating performance was due to higher gross profit of $28 million driven primarily by gross productivity, pricing actions and mix.

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The Company believes the extent of the impact of this rapidly changing retail and consumer landscape, which reflects major retailers’ focus on tight control over their inventory levels, fluctuating interest rates and indirect macroeconomic impacts from geopolitical conflicts as well as recently imposed tariffs by the current U.S.

presidential administration, including those most recently announced reciprocal tariffs, some of which are currently delayed, and countries’ retaliatory actions in response to such tariffs, will continue to be driven by numerous evolving factors the Company cannot accurately predict and which will vary.

presidential administration, including those most recently announced reciprocal

tariffs, some of which are currently delayed, and countries’ retaliatory actions in response to such tariffs, will continue to be driven by numerous evolving factors the Company cannot accurately predict and which will vary.

For further information, refer to Risk Factors in Part I - Item 1A and Recent Developments in Part II - Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operation s of the Company's most recent Annual Report on Form 10-K, filed on February 14, 2025.

At June 30, 2025, the Company had cash and cash equivalents of approximately $219 million, of which approximately $185 million was held by the Company’s non-U.S.

At September 30, 2025, the Company had cash and cash equivalents of approximately $229 million, of which approximately $205 million was held by the Company’s non-U.S.

subsidiaries.

Cash, cash equivalents and restricted cash increased (decreased) as follows for the six months ended June 30, 2025 and 2024 (in millions):

Cash, cash equivalents and restricted cash increased (decreased) as follows for the nine months ended September 30, 2025 and 2024 (in millions):

2025 2024 Increase (Decrease)

Cash provided by (used in) operating activities $ (271) $ 64 $ (335)

Cash provided by operating activities $ 103 $ 346 $ (243)

Cash used in investing activities (115) (107) (8)

Cash provided by financing activities 382 78 304

Cash provided by (used in) financing activities 59 (64) 123

Exchange rate effect on cash, cash equivalents and restricted cash 3 (15) 18

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Cash Flows from Operating Activities

The change in net cash used in operating activities reflects higher working capital requirements of the Company due to lapping of prior year reductions, decrease in factored accounts receivable and higher incentive compensation payments in the current year, partially offset by lower restructuring payments.

The change in net cash provided by operating activities reflects higher working capital requirements of the Company due to lapping of prior year reductions, the cash impact of additional tariffs and higher incentive compensation payments in the current year, partially offset by lower restructuring payments.

Cash Flows from Investing Activities

The higher cash used in investing activities was primarily due to higher capital expenditures.

The change in net cash used in investing activities was primarily due to $14 million increase in capital expenditures, partially offset by higher proceeds from the sale of divested businesses and investments.

Cash Flows from Financing Activities

The change in net cash provided by financing activities was due to higher utilization of the Credit Revolver (defined hereafter) during the current period.

The change in net cash provided by financing activities was primarily due to higher utilization of the Credit Revolver (defined hereafter) during the current period.

See Footnote 8 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

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Other than outstanding borrowings under the Credit Revolver, availability under the Credit Revolver is subject to change in accordance with the terms of the agreement, including in response to changes in the Company’s pledged collateral value or outstanding letters of credit under the Credit Revolver.

At June 30, 2025, there was $989 million of availability under the Credit Revolver, based on the value of the pledged collateral and prior to giving effect to outstanding borrowings and letters of credit.

At September 30, 2025, there was $932 million of availability

under the Credit Revolver, based on the value of the pledged collateral and prior to giving effect to outstanding borrowings and letters of credit.

The Credit Revolver provides for the issuance of up to $150 million of letters of credit, so long as there is sufficient availability for borrowing under the Credit Revolver.

At June 30, 2025, the Company had approximately $35 million of outstanding standby letters of credit issued against the Credit Revolver and $495 million of outstanding borrowings under the Credit Revolver resulting in a net availability of approximately $459 million.

In May 2025, the Company completed the offering and sale of the 2028 Notes.

At September 30, 2025, the Company had approximately $35 million of outstanding standby letters of credit issued against the Credit Revolver and $190 million of outstanding borrowings under the Credit Revolver resulting in a net availability of approximately $707 million.

In May 2025, the Company completed the offering and sale of 8.500% senior notes due 2028.

In June 2025, the Company used the proceeds of the offering to fully redeem its 2026 Notes.

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As a result, certain of the Company’s outstanding senior notes were subject to interest rate adjustments, with such adjustments to take effect in the fourth quarter of this year.

See Recent Developments under this Item 2 and Footnote 8 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

The Company was in compliance with all of its debt covenants at June 30, 2025.

See Footnote 8 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

The Company was in compliance with all of its debt covenants at September 30, 2025.

Risk Management

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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