Spectrum Brands Holdings, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Introduction The following is management’s discussion of the financial results, liquidity and other key items related to our performance and should be read in conjunction with the Condensed Consolidated Financial Statements and related notes included in Item 1 of this Quarterly Report on Form 10-Q (the "Quarterly Report") and our Annual Report on Form 10-K for the fiscal year ended September 30, 2025 filed with the SEC on November 18, 2025 (the "2025 Annual Report"). The following discussion may contain forward-looking statements that reflect our plans, estimates, and beliefs and involve risks, uncertainties, and assumptions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those discussed within "Forward-Looking Statements" included elsewhere in this Quarterly Report, and in Item 1A. Risk Factors and "Forward-Looking Statements" included within our 2025 Annual Report. Unless the context indicates otherwise, the terms the "Company," "we," "us," or "our" are used to refer to Spectrum Brands Holdings, Inc. and its subsidiaries collectively. Non-GAAP Measurements Our consolidated and segment results contain non-GAAP metrics such as organic net sales, adjusted EBITDA and adjusted EBITDA margin. While we believe organic net sales, adjusted EBITDA and adjusted EBITDA margin are useful supplemental information, such adjusted results are not intended to replace our financial results in accordance with generally accepted accounting principles in the United States (“GAAP”) and should be read in conjunction with those GAAP results. Organic Net Sales. We define organic net sales as net sales excluding the effect of changes in foreign currency exchange rates and impact from acquisitions (where applicable). We believe this non-GAAP measure provides useful information to investors because it reflects regional and operating segment performance from our activities without the effect of changes in currency exchange rates and acquisitions. We use organic net sales as one measure to monitor and evaluate our regional and segment performance. Organic growth is calculated by comparing organic net sales to net sales in the prior year. The effect of changes in currency exchange rates is determined by translating the current period net sales using the currency exchange rates that were in effect during the prior comparative period. Net sales are attributed to the geographic regions based on the country of destination. We exclude net sales from acquired businesses in the current year for which there are no comparable sales in the prior period. The following is a reconciliation of reported net sales to organic net sales for the three and nine month periods ended June 28, 2026 compared to net sales for the three and nine month periods ended June 29, 2025: Three Month Periods Ended (in millions, except %) June 28, 2026 Net Sales Effect of Changes in Foreign Currency Organic Net Sales Net Sales June 29, 2025 Variance GPC $ 263.7 $ (1.2) $ 262.5 $ 255.2 $ 7.3 2.9 % H&G 225.2 0.1 225.3 189.2 36.1 19.1 % HPC 264.4 (6.4) 258.0 255.2 2.8 1.1 % Total $ 753.3 $ (7.5) $ 745.8 $ 699.6 46.2 6.6 % Nine Month Periods Ended (in millions, except %) June 28, 2026 Net Sales Effect of Changes in Foreign Currency Organic Net Sales Net Sales June 29, 2025 Variance GPC $ 844.6 $ (17.3) $ 827.3 $ 784.4 $ 42.9 5.5 % H&G 468.6 — 468.6 433.6 35.0 8.1 % HPC 826.0 (31.6) 794.4 857.5 (63.1) (7.4) % Total $ 2,139.2 $ (48.9) $ 2,090.3 $ 2,075.5 14.8 0.7 % 27 Table of Contents Adjusted EBITDA and Adjusted EBITDA Margin. Adjusted EBITDA and adjusted EBITDA margin are non-GAAP metrics used by management, which we believe are useful to investors to measure the operational strength and performance of our business. These metrics provide investors additional information about our operating profitability excluding certain non-cash items, non-routine items we do not expect to continue at the same level in the future, as well as other items not core to our continuing operations. By providing these measures, together with a reconciliation of the most directly comparable GAAP measure, we believe we are enhancing investors' understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. These metrics are also useful to investors in that securities analysts and other interested parties use such calculations as a measure of financial performance and debt service capabilities, and they are regularly used by management and our board of directors for internal purposes in evaluating our business performance, making budgeting decisions, and comparing our performance against other peer companies using similar measures since interest, taxes, depreciation, and amortization can differ greatly between organizations as a result of differing capital structures and tax strategies. Adjusted EBITDA is also used for determining compliance with the Company’s debt covenants. EBITDA is calculated by excluding the Company’s income tax expense, interest expense, depreciation expense and amortization expense (from intangible assets) from net income. Adjusted EBITDA also excludes certain non-cash adjustments including share based compensation expense; impairment charges on property, plant and equipment, right of use lease assets, and goodwill and other intangible assets, as applicable; gain or loss from the early extinguishment of debt through the repurchase or early redemption of debt, as applicable; and purchase accounting adjustments recognized in income subsequent to an acquisition attributable to the step-up in value on assets acquired. Additionally, the Company will further recognize adjustments from adjusted EBITDA for other costs, gains and losses that are considered significant, non-recurring, or otherwise not supporting the continuing operations and revenue generating activity of the segment or Company, including but not limited to, exit and disposal activities, or incremental costs associated with strategic transactions, restructuring and optimization initiatives such as the acquisition or divestiture of a business, related integration or separation costs, or the development and implementation of strategies to optimize or restructure the Company and its operations. Adjusted EBITDA margin is adjusted EBITDA as a percentage of reported net sales. The following is a reconciliation of Net (Loss) Income From Continuing Operations to Adjusted EBITDA and Adjusted EBITDA margin for the three and nine month periods ended June 28, 2026 and June 29, 2025, respectively. Three Month Periods Ended Nine Month Periods Ended (in millions, except %) June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 Net (loss) income from continuing operations $ (20.3) $ 20.5 $ 31.6 $ 46.9 Income tax expense 28.8 1.5 34.2 22.9 Interest expense 8.2 8.4 22.3 22.1 Depreciation 14.5 14.6 44.0 42.6 Amortization 10.3 10.5 30.8 31.5 Share based compensation 6.0 4.8 16.3 14.7 Non-cash impairment charges 104.0 7.8 104.5 23.5 Exit and disposal costs 0.4 4.2 5.3 8.2 Global ERP transformation 1 3.5 2.3 8.3 7.1 Litigation costs 2 0.2 1.2 1.8 2.8 Other 3 2.7 0.8 5.8 3.4 Adjusted EBITDA $ 158.3 $ 76.6 $ 304.9 $ 225.7 Net sales $ 753.3 $ 699.6 $ 2,139.2 $ 2,075.5 Net (loss) income from continuing operations margin (2.7) % 2.9 % 1.5 % 2.3 % Adjusted EBITDA margin 21.0 % 10.9 % 14.3 % 10.9 % ________________________________________ 1 Costs attributable to a multi-year transformation project to upgrade and implement our enterprise-wide operating systems to SAP S/4 HANA on a global basis, including project management and professional services for planning, design, and business process review that do not qualify as software configuration and implementation costs recognized as capital expenditures or deferred costs under applicable accounting principles. The Company had recently extended the project to include its HPC segment and anticipates costs to be incurred through further deployments through calendar year 2026. 2 Litigation costs are associated with the Company's cost to facilitate various ongoing litigation matters associated with the Tristar Business acquisition in Fiscal 2023, previously disclosed in our 2025 Annual Report. Such costs are anticipated to be incurred until such litigation matters have been resolved. 3 Other is attributable to other project costs associated with strategic separation initiatives and distribution center transitions, plus certain non-recurring key executive severance costs in the prior year. 28 Table of Contents Overview For additional discussion and overview of the business, please refer to Item 1. Business and Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2025 Annual Report. Recent Developments U.S. Tariffs The changes to U.S. trade policy including the introduction of incremental U.S. tariffs under the International Emergency Economic Powers Act ("IEEPA") on imported goods in the prior year have had a significant impact to our operations, increasing costs for sourced products, materials and components, and pressuring profit margins. The IEEPA tariffs were introduced in March 2025, impacting operating results primarily during the second half of the prior fiscal year. Our mitigation strategies included adjusting pricing and actively managing supply chain by engaging suppliers to support cost sharing or expanding supply chain diversification. The changing tariff policies impacted our segments to varying degrees, most significantly with HPC, as most of its products supporting the U.S. business are imported from southeast Asia. HPC has pursued sourcing alternatives and has moved production to diversify its supply chain and more effectively manage risk. Over 60% of net sales in HPC are driven through international markets and are not directly impacted by U.S. tariffs. Comparatively, our other segments were less affected. GPC has certain aquatic equipment and chews & treats products that were sourced primarily from China, but have a higher degree of sourcing diversity with major suppliers elsewhere, which allowed it to move production more swiftly to alternative supply. GPC also manufactures aquatics nutrition products at its facility in Germany and imports them into the U.S., but such tariff-related costs have been predominantly mitigated through pricing adjustments and cost management. The H&G segment products are predominantly manufactured and sold within the U.S. with a small portion of material costs and portfolio of products, such as baits, traps and mops, that are internationally sourced and affected by U.S. tariffs, with such costs having been mitigated through pricing adjustments and vendor cost management. On February 20, 2026, the U.S. Supreme Court ruled the IEEPA tariffs were unlawful. Following the ruling, the U.S. Court of International Trade ("CIT") issued an order directing the U.S. Customs and Border Protection ("CBP") to process refunds of the IEEPA tariffs, although the CIT immediately suspended the order while CBP developed and implemented the refund process. On April 20, 2026, the CBP launched the Consolidated Administration and Processing of Entries ("CAPE") process to permit importers to seek refunds for most unliquidated and certain recently liquidated IEEPA tariffs ("Phase 1") and deferred implementation for other submission types including reconciliation entries, drawback entries and unresolved protests through the deployment of subsequent phases. Further, on June 2, 2026, the U.S. Department of Justice subsequently filed an appeal on the CIT's IEEPA tariff refund order contesting the CIT's authority to issue universal injunctions requiring duty refunds, whereas the CBP continues to process and fund submitted tariff refunds through the CAPE refund program. On June 29, 2026, the CBP launched further capabilities on CAPE to permit reconciliation entries where the entry is unliquidated ("Phase 2"), with subsequent phases expected in late July to cover liquidated entries which the CBP has indicated will be limited to filers with an active lawsuit. The Company has paid IEEPA tariffs on certain imported products and materials of approximately $66.4 million since the prior year through the date in which the IEEPA tariffs were considered unlawful. During the three and nine month periods ended June 28, 2026, the Company has recognized $60.6 million in tariff refunds as a reduction in Cost of Goods Sold on the Company's Condensed Consolidated Statements of Income. See Note 15 - Commitments and Contingencies in Notes to the Condensed Consolidated Financial Statements for additional discussion. Additionally, we are evaluating other implications attributable to such actions including effects on our customers and the potential risk of price concessions which may give rise to future obligations and affect future operating results. As of June 28, 2026, the consolidated financial statements do not reflect any impacts attributable to any prospective changes or refunds. Despite the IEEPA tariff refunds, the Company continues to be subject to ongoing tariff and duties for certain countries of origin, and for certain materials and components, for the Company's products, in addition to the incremental global tariffs implemented by the Trump administration under Section 122 of the Trade Act after the IEEPA tariffs were struck down by the U.S. Supreme Court, which have a limited duration and expire unless extended by U.S. Congress. As such, there continues to be a high degree of risk and uncertainty around potential changes to the U.S. trade policy and potential impacts of tariffs on prospective operating results of the Company. We continue to closely monitor the trade environment for impacts on our projections and forecasts. We have managed cash flow and secured our balance sheet to support the ongoing business through the evolving changes in U.S. trade policy and potential impacts on the global-macro economic environment. We are focused on supply chain diversification, operational efficiency, reducing waste, leveraging technology to enhance productivity, and strategic investments for sustaining growth and profitability amid trade uncertainties. International Conflicts and Geopolitical Environment The ongoing geopolitical conflicts, including the Russia-Ukraine war, the Israel-Hamas war, and the U.S.-Iran war, have contributed to meaningful macroeconomic headwinds that have affected, and may continue to affect, our business, operations, and financial results. The effects of these conflicts are multi-dimensional including, but not limited to, cost inflation, operational risk and domestic and international demand. International conflicts have meaningfully elevated input cost pressures across our global operations. The continuation of conflict in Eastern Europe and the Middle East has contributed to volatility and elevated pricing in energy and commodity markets, impacting input costs for products dependent upon plastics and certain metals; along with disruptions impacting freight and logistics costs associated with rerouting of shipping lanes impacting both transit times and transportation expenses for international sourcing and distribution channels. Our supply chain mitigation efforts and pricing have partially offset these inflationary pressures, though there can be no assurance that such measures will be sufficient to address future cost escalation. The breadth of active international conflicts creates elevated risks of supply chain interruption, foreign regulatory changes, and geopolitical sanctions that could affect our ability to source materials, manufacture products, or service key markets. Although our direct exposure to conflict zones is limited, secondary and tertiary effects, including disruptions to global shipping networks, sanctions on financial counterparties, and instability in emerging market currencies, have the potential to adversely affect our operations. Elevated macroeconomic uncertainty driven by geopolitical conflict has had a dampening effect on consumer confidence and discretionary spending in several key domestic and international markets, particularly in EMEA. Our HPC and GPC segments, which derive a significant portion of their revenues from international markets, have experienced periods of volume softness attributable in part to weakened household spending power and retailer inventory levels. Our GPC segment has seen more resilience given the non-discretionary nature of pet care spending, although foreign currency volatility arising from geopolitical tensions has presented headwinds to the translation of international revenues. We continue to closely monitor the evolving geopolitical environment and assess our exposure and managing the relevant risks, including through active engagement with our supply chain partners, hedging arrangements, and ongoing evaluation of our geographic footprint and sourcing diversification strategies. However, given the inherently unpredictable nature of international conflict and its downstream macroeconomic consequences, there can be no assurance that future developments will not result in material adverse effects on our net sales, operating costs, profitability, or liquidity. 29 Table of Contents HPC Transaction On May 1, 2026, the Company entered into a definitive agreement, through its indirect subsidiaries, for a strategic investment from funds affiliated with Oaktree Capital Management LP ("Oaktree") in its HPC business for $127.0 million in cash proceeds, before transaction costs and other fees, which effectively closed on May 11, 2026 (the "HPC Transaction"). The HPC Transaction consists of $67.0 million in proceeds from the issuance of convertible preferred equity ("HPC Preferred Equity") and $60.0 million in proceeds, less a $2.4 million original issuance discount, in the form of a first lien term loan on the HPC business ("HPC Term Loan"). Of the $67.0 million of HPC Preferred Equity, approximately $5.8 million was deferred until the completion of certain international regulatory approvals ("Deferred Purchase"), resulting in $61.2 million of HPC Preferred Equity having been issued as of the transaction close on May 11, 2026. Subsequently, all regulatory approvals were achieved and the Company closed on the Deferred Purchase on July 8, 2026. As of June 28, 2026, Oaktree held a 24.9% equity ownership in the HPC business which has subsequently increased to approximately 27.3% upon consummation of the Deferred Purchase. The noncontrolling equityholder holds a minority of seats on the board of the HPC business. The Company continues to consolidate the HPC business and report it as a reportable segment. The HPC Preferred Equity is recognized as Redeemable Noncontrolling Interest on the Condensed Consolidated Statement of Financial Position and is classified as mezzanine equity. Cumulative dividends on the HPC Preferred Equity accrete at 8.0% per annum and compound quarterly. The Company recognizes an adjustment to Redeemable Noncontrolling Interest for the liquidation preference on the HPC preferred ownership consisting of the higher of (i) the 8.0% dividend accretion and (ii) the allocation of comprehensive income reflective on an as-converted basis; which is recognized as Net Income Attributable to Redeemable Noncontrolling Interest on the Condensed Consolidated Statements of Income . See Note 8 - Redeemable Noncontrolling Interest in the Notes to the Condensed Consolidated Financial Statements for further detail. The HPC Term Loan has an aggregate principal amount of $60.0 million and a maturity date of May 11, 2029, including a one-year extension option exercisable by the Company, subject to lender approval, and is subject to a rate per annum equal to SOFR (as defined in the HPC Credit Agreement), plus a margin of 5.50% or the base rate plus a margin of 4.50%. See Note 7 - Debt in the Notes to the Condensed Consolidated Financial Statements for further detail. Additionally, during the three month period ended June 28, 2026, the Company and its HPC segment realized a triggering event in relation to the implied enterprise value of the HPC business associated with the noncontrolling interest recognized as part of the HPC Transaction, impacting market related inputs and assumptions used in assessing the value for certain indefinite lived intangible assets held by the HPC business unit. As a result, the Company recognized an impairment charge of $104.0 million for the three and nine month periods ended June 28, 2026. See Note 6 - Goodwill and Intangible Assets in the Notes to the Condensed Consolidated Financial Statements for further detail. Due to the completion of the HPC Transaction, employees of the HPC business participating in the Company's LTIP program were transferred into a new HPC-specific long term incentive plan that are cash-based liability awards indexed to the fair value of equity of the HPC business which may impact the level of share based compensation expense realized by the Company. See Note 12- Share-Based Compensation in the Notes to the Condensed Consolidated Financial Statements for further detail. Transactions, Restructuring and Optimization Initiatives We periodically evaluate and enter into strategic transactions that may result in the acquisition or divestiture of a business which impacts the comparability of the financial results of the consolidated group and/or certain reporting segments. Additionally, we enter into internal restructuring and optimization initiatives to improve efficiencies and utilization to reduce costs, increase revenues and improve margins, which may have a significant impact on the comparability of financial results on the condensed consolidated financial statements. These changes and updates are inherently difficult and our ability to achieve the anticipated cost savings and other benefits from such operating strategies may be affected by a number of other macro-economic factors, such as inflation and increased interest rates, which are beyond our control. Moreover, the comparability of financial information may be impacted by incremental amounts attributable to such strategic transactions, restructuring and optimization initiatives. The following is a summary of costs attributable to strategic transactions and business development costs that are considered as potentially having a significant impact on the comparability of our financial results as reflected on the consolidated financial statements and segment financial information, for each of the projects during the three and nine month periods ended June 28, 2026 and June 29, 2025, respectively: Three Month Periods Ended Nine Month Periods Ended (in millions) June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 Global ERP transformation 1 $ 3.5 $ 2.3 $ 8.3 $ 7.1 HPC separation initiatives 2 2.1 (0.1) 4.0 0.9 HHI separation costs 3 — 0.3 — 1.4 Other project costs 4 0.7 0.1 1.9 0.6 Total $ 6.3 $ 2.6 $ 14.2 $ 10.0 Reported as: Selling, general & administrative $ 6.3 $ 2.6 $ 14.2 $ 10.0 ________________________________________ 1 Costs attributable to a multi-year transformation project to upgrade and implement our enterprise-wide operating systems to SAP S/4 HANA on a global basis, including project management and professional services for planning, design, and business process review that do not qualify as software configuration and implementation costs recognized as capital expenditures or deferred costs under applicable accounting principles. The Company has extended the project to include its HPC segment and anticipates costs to be incurred through further deployments through calendar year 2026. 2 Costs attributable to efforts to facilitate a strategic separation of the HPC segment either through a spin, merger or sale, consisting of legal and professional fees to facilitate transaction opportunities and diligence efforts, including the recent HPC Transaction. Costs attributable to the issuance of the HPC Preferred Equity and HPC Term Loan associated with the HPC Transaction were deferred on the Company's Condensed Consolidated Statement of Financial Position . 3 Costs attributable to the HHI divestiture consisting of costs to facilitate separation and transition of systems and processes subject to transition service agreements ("TSAs"), which closed effective June 2025 with no further subsequent costs incurred. 4 Other project costs are attributable to distribution center transitions. Exit and Disposal Activity We periodically recognize exit and disposal costs primarily consisting of severance and contract termination costs that may be attributable to a reorganization or restructuring of the Company, cost savings initiatives, or in consideration of a recent strategic transaction. Such actions result in the recognition of costs to us that are considered incremental and not reflective of the continuing operating costs of the business and may impact the comparability of the consolidated company and its segments' results of operations. See Note 2 - Exit and Disposal Activities in the Notes to the Condensed Consolidated Financial Statements for further detail. 30 Table of Contents Consolidated Results of Operations The following is a summary of consolidated results of operations for the three and nine month periods ended June 28, 2026 and June 29, 2025, respectively. (in millions, except %) Three Month Periods Ended Variance Nine Month Periods Ended Variance June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 Net sales $ 753.3 $ 699.6 $ 53.7 7.7 % $ 2,139.2 $ 2,075.5 $ 63.7 3.1 % Gross profit 370.4 264.1 106.3 40.2 % 882.3 775.3 107.0 13.8 % Selling, general & administrative 250.5 225.0 25.5 11.3 % 691.3 656.3 35.0 5.3 % Impairment of intangible assets 104.0 — 104.0 n/m 104.0 15.7 88.3 n/m Impairment of property, plant and equipment and operating leases — 7.8 (7.8) n/m 0.5 7.8 (7.3) (93.6) % Interest expense 8.2 8.4 (0.2) (2.4) % 22.3 22.1 0.2 0.9 % Interest income (1.2) (0.6) (0.6) 100.0 % (2.3) (3.6) 1.3 (36.1) % Other non-operating expense, net 0.4 1.5 (1.1) (73.3) % 0.7 7.2 (6.5) (90.3) % Income tax expense 28.8 1.5 27.3 n/m 34.2 22.9 11.3 49.3 % Net (loss) income from continuing operations (20.3) 20.5 (40.8) n/m 31.6 46.9 (15.3) (32.6) % Loss from discontinued operations, net of tax (1.2) (0.8) (0.4) 50.0 % (2.6) (2.2) (0.4) 18.2 % Net (loss) income (21.5) 19.7 (41.2) n/m 29.0 44.7 (15.7) (35.1) % Net income from continuing operations attributable to redeemable noncontrolling interest 5.3 — 5.3 n/m 5.3 — 5.3 n/m Net (loss) income attributable to controlling interest (26.8) 19.9 (46.7) n/m 23.7 44.3 (20.6) (46.5) % n/m = not meaningful Net Sales. The following is a summary of net sales by segment for the three and nine month periods ended June 28, 2026 and June 29, 2025, respectively, and the principal components of changes in net sales between the respective periods. (in millions, except %) Three Month Periods Ended Variance Nine Month Periods Ended Variance June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 GPC $ 263.7 $ 255.2 $ 8.5 3.3 % $ 844.6 $ 784.4 $ 60.2 7.7 % H&G 225.2 189.2 36.0 19.0 % 468.6 433.6 35.0 8.1 % HPC 264.4 255.2 9.2 3.6 % 826.0 857.5 (31.5) (3.7) % Net Sales $ 753.3 $ 699.6 53.7 7.7 % $ 2,139.2 $ 2,075.5 63.7 3.1 % Three Month Period Ended (in millions, except %) GPC H&G HPC Total Amount Percent Amount Percent Amount Percent Amount Percent Volume $ (2.0) (0.8) % $ 34.5 18.2 % $ (11.2) (4.4) % $ 21.3 3.0 % Price 9.3 3.6 % 1.6 0.8 % 14.0 5.5 % 24.9 3.6 % Foreign Currency 1.2 0.5 % (0.1) (0.1) % 6.4 2.5 % 7.5 1.1 % Total $ 8.5 3.3 % $ 36.0 19.0 % $ 9.2 3.6 % $ 53.7 7.7 % Organic $ 7.3 2.9 % $ 36.1 19.1 % $ 2.8 1.1 % $ 46.2 6.6 % Nine Month Period Ended (in millions, except %) GPC H&G HPC Total Amount Percent Amount Percent Amount Percent Amount Percent Volume $ 24.1 3.1 % $ 29.4 6.8 % $ (94.3) (11.0) % $ (40.8) (2.0) % Price 18.8 2.4 % 5.6 1.3 % 31.2 3.6 % 55.6 2.7 % Foreign Currency 17.3 2.2 % — — % 31.6 3.7 % 48.9 2.4 % Total $ 60.2 7.7 % $ 35.0 8.1 % $ (31.5) (3.7) % $ 63.7 3.1 % Organic $ 42.9 5.5 % $ 35.0 8.1 % $ (63.1) (7.4) % $ 14.8 0.7 % Refer to the Segment Financial Data section below for further discussion on net sales results. 31 Table of Contents Gross Profit. The following is a summary of the gross profit and gross profit margin for the three and nine month periods ended June 28, 2026 and June 29, 2025, respectively, and the principal factors contributing to the change between the respective periods. Three Month Periods Ended Nine Month Periods Ended (in millions, except %) June 28, 2026 June 29, 2025 Variance June 28, 2026 June 29, 2025 Variance Gross profit $ 370.4 $ 264.1 $ 106.3 40.2 % $ 882.3 $ 775.3 $ 107.0 13.8 % Gross profit margin 49.2 % 37.8 % 1,140 bps 41.2 % 37.4 % 380 bps Three Month Period Ended Nine Month Period Ended (in millions, except margin) Gross Profit Margin Gross Profit Margin Price $ 25.1 210 bps $ 55.7 165 bps Mix 9.0 125 bps 4.9 25 bps Volume 10.9 35 bps (10.9) 20 bps Cost changes (5.6) (85) bps (30.1) (150) bps Tariff refunds 60.6 810 bps 60.6 280 bps Foreign exchange rates 6.3 45 bps 26.8 40 bps Total $ 106.3 1,140 bps $ 107.0 380 bps Gross profit for the three month period increased with a margin increase due to the recognition of a one time tariff refund, positive pricing adjustments and cost improvements mitigating tariff and inflationary costs, increased sales volumes with favorable product mix and lower trade spend, plus favorable foreign currency. Gross profit for the nine month period increased with a margin increase due to the recognition of a one time tariff refund, positive pricing adjustments and cost improvements mitigating tariff and inflationary costs and lower overall year-to-date volumes, plus favorable foreign currency. Selling, General & Administrative. The following is a summary of the selling, general & administrative costs for the three and nine month periods ended June 28, 2026 and June 29, 2025, respectively, including amounts as a percentage of net sales for each respective period. Three Month Periods Ended (in millions, except %) June 28, 2026 % of Net Sales June 29, 2025 % of Net Sales Variance Sales, marketing & advertising $ 104.5 13.9 % $ 85.4 12.2 % $ 19.1 22.4 % Distribution 61.7 8.2 % 60.4 8.6 % 1.3 2.2 % General & administrative 71.3 9.5 % 67.0 9.6 % 4.3 6.4 % Research & development 6.2 0.8 % 5.5 0.8 % 0.7 12.7 % Strategic transaction, restructuring and optimization 6.8 0.9 % 6.7 1.0 % 0.1 1.5 % Total selling, general & administrative $ 250.5 33.3 % $ 225.0 32.2 % 25.5 11.3 % Nine Month Periods Ended (in millions, except %) June 28, 2026 % of Net Sales June 29, 2025 % of Net Sales Variance Sales, marketing & advertising $ 258.3 12.1 % $ 244.0 11.8 % $ 14.3 5.9 % Distribution 187.1 8.7 % 182.2 8.8 % 4.9 2.7 % General & administrative 209.4 9.8 % 194.8 9.4 % 14.6 7.5 % Research & development 16.9 0.8 % 17.1 0.8 % (0.2) (1.2) % Strategic transaction, restructuring and optimization 19.6 0.9 % 18.2 0.9 % 1.4 7.7 % Total selling, general & administrative $ 691.3 32.3 % $ 656.3 31.6 % 35.0 5.3 % Selling, general and administrative expenses increased for the three and nine month periods primarily due to higher sales, marketing & advertising costs along with increased general and administrative costs. Sales, marketing and advertising costs increased between periods primarily due to the increased investment in marketing and advertising along with increased sales volumes. The increase in distribution costs between periods for the three and nine month periods was driven by the increased sales volume. General & administrative costs increased for the three and nine month periods due to higher overhead costs following the expiration of transition service agreements associated with the HHI divestiture in June 2025. Research & development costs were consistent between periods. Strategic transaction, restructuring and optimization costs, inclusive of exit & disposal costs, were consistent for the three and nine month periods due to incremental initiative spending associated with the HPC Transaction in the current year and and the expiration of transition service agreements associated with the HHI divestiture in the prior year. Impairment of Intangible Assets. During the three and nine month periods ended June 28, 2026, the Company recognized an impairment charge on indefinite lived intangible assets held by the HPC business in response to a triggering event identified during the three month period ended June 28, 2026. See Note 6 - Goodwill and Intangible Assets in the Notes to the Condensed Consolidated Financial Statements for further detail. During the three and nine month periods ended June 29, 2025, the Company recognized an impairment charge on its PowerXL® tradename in response to a triggering event identified during the three month period ended March 30, 2025. Interest Expense. Interest expense during the three and nine month periods was consistent to the prior periods. Interest Income. Interest income during the three month period increased with the receipt of proceeds from the HPC transaction, whereas interest income during the nine month period decreased due to higher cash balances held in term deposits in the first quarter of the prior period. Other Non-Operating (Income) Expense, Net. Other non-operating expense is primarily due to changes in foreign currency compared to the prior period. Income Taxes. Our estimated annual effective tax rate was impacted by income earned outside the U.S. that is subject to U.S. tax, including the U.S. tax on global intangible low taxed income, and certain nondeductible expenses, plus discrete changes realized during the three month period ended June 28, 2026 associated with the execution of the HPC Transaction, return to provision adjustments and a net benefit realized as part of an ongoing IRS audit. See Note 14 - Income Taxes in the Notes to the Condensed Consolidated Financial Statements for further discussion on the effective tax rate for the three and nine month periods. 32 Table of Contents Loss From Discontinued Operations. Loss from discontinued operations primarily reflect changes to indemnifications associated with divested businesses. Net Income Attributable to Redeemable Noncontrolling Interest. Net income attributable to redeemable noncontrolling interest reflects the accretion of earnings and liquidation preference attributable to the noncontrolling interest in the HPC business that was realized during the three month period ended June 28, 2026. See Note 8 - Redeemable Noncontrolling Interest in the Notes to the Condensed Consolidated Financial Statements for further detail. Se gment Financial Data Global Pet Care (in millions, except %) Three Month Periods Ended Variance Nine Month Periods Ended Variance June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 Net sales $ 263.7 $ 255.2 $ 8.5 3.3 % $ 844.6 $ 784.4 $ 60.2 7.7 % Adjusted EBITDA 84.4 44.0 40.4 91.8 % 190.2 145.5 44.7 30.7 % Adjusted EBITDA margin 32.0 % 17.2 % 1,480 bps 22.5 % 18.5 % 400 bps Net sales for the three month period increased with an organic net sales increase of $7.3 million, or 2.9%, excluding a favorable foreign currency impact of $1.2 million, with increases in North America driven by market share gains and category growth for Chews and Treats, Stain and Odor, and Grooming products, and benefit of prior year distribution delays from temporary suspension on shipments during pricing negotiations and temporary pause on China sourced purchasing. Net sales increase was partially offset by lower EMEA volumes in Companion Animal category primarily due to the advanced orders in the prior quarter in anticipation of planned system implementation despite increased sales volume from Companion Animal with continued GoodBoy® market expansion and Aquatics for improved market share in a declining category and year-over-year improvement in the e-commerce channel. Net sales for the nine month period increased with an organic net sales increase of $42.9 million or 5.5%, excluding a favorable foreign currency impact of $17.3 million with increase in North America due to the shift of orders out of the prior year in preparation of a system implementation, positive pricing adjustments, and positive e-commerce distribution for Companion Animal products with increased volumes in EMEA due to expansion of GoodBoy® in continental Europe. Adjusted EBITDA and adjusted EBITDA margin for the three month period increased with the recognition of one-time tariff refunds, favorable mix, with positive pricing and cost improvements mitigating impacts of inflationary costs, tariffs, and higher investment spend in marketing and advertising. Adjusted EBITDA and adjusted EBITDA margin for the nine month period increased with the recognition of one time tariff refunds, higher volumes, favorable mix, with positive pricing and cost improvements mitigating impacts of inflationary costs, tariffs and increased investment spend in marketing and advertising. Home & Garden (in millions, except %) Three Month Periods Ended Variance Nine Month Periods Ended Variance June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 Net sales $ 225.2 $ 189.2 $ 36.0 19.0 % $ 468.6 $ 433.6 $ 35.0 8.1 % Adjusted EBITDA 50.4 38.6 11.8 30.6 % 89.7 74.6 15.1 20.2 % Adjusted EBITDA margin 22.4 % 20.4 % 200 bps 19.1 % 17.2 % 190 bps Net sales and organic net sales for the three month period increased with increased retail sales and favorable weather earlier in the quarter driving replenishment volumes for our Spectracide® Controls product, plus improved distribution and retail sales for repellents and Hot Shot® household control products, with some unfavorable weather in the latter-half of the period negatively impacting retail sales momentum mitigated by strong brand and market presence. Net sales and organic net sales for the nine month period increased due to favorable retail sales and weather conditions driving replenishment volume in our Spectracide® Controls category, which was further benefited by lower prior year volumes with earlier seasonal inventory build up in the prior year, increased distribution and retail sales for repellents and Hot Shot® household control products, plus some pricing adjustments mitigating increased inputs costs. Adjusted EBITDA and adjusted EBITDA margin for the three month period increased due to higher sales volumes, recognition of one-time tariff refunds, and positive pricing and productivity improvements mitigating impacts of inflationary costs and higher trade spend. Adjusted EBITDA and adjusted EBITDA margin for the nine month period increased due to higher sales volumes, recognition of one-time tariff refunds, and positive pricing and cost improvements mitigating impacts of inflationary costs. Home and Personal Care (in millions, except %) Three Month Periods Ended Variance Nine Month Periods Ended Variance June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 Net sales $ 264.4 $ 255.2 $ 9.2 3.6 % $ 826.0 $ 857.5 $ (31.5) (3.7) % Adjusted EBITDA 40.6 7.0 33.6 480.0 % 69.4 41.0 28.4 69.3 % Adjusted EBITDA margin 15.4 % 2.7 % 1,270 bps 8.4 % 4.8 % 360 bps Net sales for the three month period increased with an organic net sales increase of $2.8 million, or 1.1%, excluding a favorable foreign currency impact of $6.4 million due to increased sales in EMEA and LATAM partially offset by decreased sales in North America. EMEA sales increased with growth in Home Appliance and Personal Care, benefited from one-time reduction in trade spend in our e-commerce and direct-to-consumer ("DTC") channels with expansion of DTC and e-commerce capabilities, with slower demand and increased retail competition. North America sales decreased with lower Home Appliance volumes reflecting category softness and increase in Personal Care sales with improved category performance and Remington® market share and partially benefited by prior year tariff related distribution delays. LATAM sales continued to grow with new product launches and market expansions within the region, predominantly with Personal Care and continued volumes within Home Appliances. Net sales for the nine month period decreased with an organic net sales decrease of $63.1 million, or 7.4%, excluding a favorable foreign currency impact of $31.6 million driven by lower net sales in both product categories in North America and EMEA. Decrease in EMEA sales was attributable to distribution timing and higher retail inventory following weaker than anticipated holiday sales reducing replenishment orders. North America sales decreased in both product categories as it was impacted by overall consumer softness due to increased pricing from tariffs and SKU rationalization actions in response to changes in trade policy to ensure overall profitability. LATAM sales increased with new product launches and improved volumes from successful holiday campaigns. Adjusted EBITDA and adjusted EBITDA margins for the three month period increased due to the recognition of one-time tariff refunds, with cost improvement initiatives, cost saving efforts, and pricing adjustments mitigating impacts of inflationary costs and tariffs, plus favorable foreign currency. Adjusted EBITDA and adjusted EBITDA margin for the nine month period increased due to the recognition of one-time tariff refunds, cost improvement initiatives, cost savings efforts, and pricing adjustments mitigating impacts of inflationary costs and tariffs, plus favorable foreign currency partially offset by reduced year-to-date volumes. Liquidity and Capital Resources The following is a summary of cash flow from continuing operations for the nine month periods ended June 28, 2026 and June 29, 2025, respectively. (in millions) June 28, 2026 June 29, 2025 Operating activities $ 161.2 $ 33.1 Investing activities (27.2) (25.2) Financing activities 2.2 (245.0) Cash Flows from Operating Activities Cash flows provided by operating activities from continuing operations increased $128.1 million, due to higher sales and improved profitability, lower investment in working capital and improved collections on receivables, and lower cash paid towards income taxes. Cash Flows from Investing Activities Cash flows used in investing activities increased $2.0 million due to increased capital expenditures. Cash Flows from Financing Activities Cash flows provided by financing activities increased $247.2 million due to proceeds from the issuance of the HPC Term Loan and the HPC Preferred Equity in a subsidiary by a noncontrolling interest as part of the HPC Transaction, net cash for related transaction costs, plus lower cash dividends and treasury share repurchase activity. During the nine month periods ended June 28, 2026 and June 29, 2025, the Company made quarterly cash dividend payments of $0.47 per share, with total dividend payments decreasing due to fewer outstanding shares following treasury share repurchase activity. Liquidity Outlook We believe our ability to generate cash flows from operating activities, coupled with our expected ability to access the credit markets, enables us to execute our growth strategies and return value to our shareholders. Our ability to make principal and interest payments on borrowings under our debt agreements and our ability to fund planned capital expenditures will depend on our ability to generate cash in the future, which, to a certain extent, is subject to general economic, financial, competitive, regulatory and other conditions. Based upon our current and anticipated level of operations, existing cash balances, and availability under our credit facility, we expect cash flows from operations to be sufficient to meet our operating and capital expenditure requirements for at least the next 12 months. It is not unusual for our business to experience negative operating cash flow during the first quarter of the fiscal year due to the operating calendar with our retail customers and the seasonality of our working capital. Additionally, we believe the availability under our credit facility and access to capital markets are sufficient to achieve our longer-term strategic plans. As of June 28, 2026, the Company had total cash and cash equivalents of $258.9 million and borrowing availability of $494.8 million under our credit facility with a total liquidity of $753.7 million. We maintain a capital structure that we believe provides us with sufficient access to credit markets. When combined with strong levels of cash flow from operations, our capital structure has provided the flexibility necessary to pursue strategic growth opportunities and return value to our shareholders. The Company’s access to capital markets and financing costs may depend on the Company’s credit ratings. None of the Company’s current borrowings are subject to default or acceleration as a result of a downgrading of credit ratings, although a downgrade of the Company’s credit ratings could increase fees and interest charges on future borrowings. As of June 28, 2026, we were in compliance with all covenants under the Credit Agreement, HPC Credit Agreement and the indentures governing the 3.375% Exchangeable Notes, due June 1, 2029 and the 3.875% Notes, due March 15, 2031. Short-term financing needs primarily consist of working capital requirements, capital spending, periodic principal and interest payments on our long-term debt, and initiatives to support restructuring, integration or other strategic projects. Long-term financing needs depend largely on potential growth opportunities including acquisition activity, repayment or refinancing of our long-term obligations, and share repurchase activity, amongst others. Our long-term liquidity may be influenced by our ability to borrow additional funds, renegotiate existing debt, and raise equity under terms that are favorable to us. We also have long-term obligations associated with defined benefit plans with expected minimum required contributions that are not considered significant to the consolidated group. 33 Table of Contents The Company has repurchased shares of common stock as further detailed in Note 11 – Shareholders’ Equity in the Notes to the Condensed Consolidated Financial Statements . We may, from time to time, seek to repurchase additional shares of our common stock, including through 10b5-1 plans, and any further repurchase activity will be dependent on prevailing market conditions, liquidity requirements and other factors. A portion of our cash balance is located outside the U.S. given our international operations. We manage our worldwide cash requirements centrally by reviewing available cash balances across our worldwide group and the cost effectiveness with which this cash can be accessed. We generally repatriate cash from non-U.S. subsidiaries, provided the cost of the repatriation is not considered material. The counterparties that hold our deposits consist of major financial institutions. The majority of our business is not considered seasonal with a year round selling cycle that is overall consistent during the fiscal year with the exception of our H&G segment. H&G sales typically peak during the first six months of the calendar year (the Company's second and third fiscal quarters) due to customer seasonal purchasing patterns and the timing of promotional activity. This seasonality requires the Company to ship large quantities of products ahead of peak consumer buying season that can impact cash flow demands to meet manufacturing and inventory requirements earlier in the fiscal year, as well as extended credit terms and/or promotional discounts throughout the peak season. Other than the changes to debt obligations previously noted, there have been no material changes to our debt obligations, lease obligations, employee benefit obligations, or other contractual obligations or commercial commitments previously disclosed. We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. Critical Accounting Policies and Estimates There have been no material changes to our critical accounting estimates as discussed in our 2025 Annual Report. New Accounting Pronouncements See Note 1 – Basis of Presentation and Significant Accounting Policies in the Notes to the Condensed Consolidated Financial Statements for information about accounting pronouncements that are newly adopted and recent accounting pronouncements not yet adopted. 34 Table of Contents Guarantor Statements Spectrum Brands, Inc. (“SBI”) has issued the 3.375% Exchangeable Notes, due June 1, 2029, under the 2029 Indenture and the 3.875% Notes, due March 15, 2031, under the 2031 Indenture (collectively, the “Notes”). The Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis by Spectrum Brands Holdings, Inc., as parent guarantor, and SBI’s domestic subsidiaries. The Notes and the related guarantees rank equally in right of payment with all of SBI and the guarantors’ existing and future senior indebtedness and rank senior in right of payment to all of SBI and the guarantors’ future indebtedness that expressively provide for its subordination to the Notes and the related guarantees. Non-guarantor subsidiaries primarily consist of SBI’s foreign subsidiaries. See Note 7 - Debt within the Notes to the Consolidated Financial Statements within the 2025 Annual Report. Effective May 11, 2026, following the closing of the HPC Transaction, the HPC business is no longer part of the collateral package of the Company's indebtedness and excluded as a guarantor. The following financial information consists of summarized financial information of the Obligor, presented on a combined basis. The “Obligor” consists of the financial statements of SBI as the debt issuer, Spectrum Brands Holdings, Inc. as the parent guarantor, and the domestic subsidiaries of SBI as subsidiary guarantors, excluding domestic subsidiaries associated with the HPC business. Intercompany balances and transactions between SBI and the guarantors have been eliminated. Investments in non-guarantor subsidiaries and the earnings or losses from those non-guarantor subsidiaries have been excluded. Nine Month Period Ended Year Ended (in millions) June 28, 2026 September 30, 2025 Statements of Operations Data Third party net sales $ 972.4 $ 1,665.4 Intercompany net sales to non-guarantor subsidiaries 5.6 53.1 Net sales 978.0 1,718.5 Gross profit 448.1 613.1 Operating income (loss) 105.8 (6.9) Intercompany dividend income 117.1 224.7 Net income from continuing operations 190.0 197.9 Net income 187.3 198.1 Net income attributable to controlling interest 187.3 198.1 Statements of Financial Position Data Current assets $ 918.8 $ 781.5 Noncurrent assets 5,648.2 4,963.7 Current liabilities 501.6 732.9 Noncurrent liabilities 825.4 865.9 The Obligor’s amounts due from, due to the non-guarantor subsidiaries as of June 28, 2026 and September 30, 2025 are as follows: (in millions) June 28, 2026 September 30, 2025 Statements of Financial Position Data Current receivables from non-guarantor subsidiaries $ 71.4 $ 119.8 Current note receivables from non-guarantor subsidiaries 30.9 20.8 Long-term note receivables from non-guarantor subsidiaries 199.3 — Current payables to non-guarantor subsidiaries 73.4 81.2 Current debt with non-guarantor subsidiaries 139.8 376.5 Long-term debt with non-guarantor subsidiaries 16.5 1.8 35 Table of Contents