Ladies and gentlemen, thank you for standing by. Welcome to the Central Garden & Pet Q3 fiscal 2023 earnings call. My name is Doug, and I will be your conference operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Instructions will be given at that time. If anyone should require assistance during the call, please press star zero on your touchtone phone. As a reminder, this conference call is being recorded. I would now like to turn the call over to Friederike Edelmann with Vice President, Investor Relations. Please go ahead. Thank you. Good afternoon, everyone. Thank you for joining us. With me on the call today are Tim Cofer, Chief Executive Officer, Niko Lahanas, Chief Financial Officer, J.D. Walker, President, Garden Consumer Products, and John Hanson, President, Pet Consumer Products. As usual, Tim will provide a business update, and Niko will discuss results for our Q3, ended June 24, 2023, in more detail. After the prepared remarks, J.D. and John will join us for the Q&A. Our press release and related materials are available at ir.central.com and contain the GAAP to non-GAAP reconciliation for the non-GAAP measures discussed on this call. Lastly, unless otherwise stated, all growth comparisons made during this call are against the same period in the prior year. Before I turn the call over to Tim, I would like to remind you that statements made during this call, which are not historical facts, including earnings per share and other guidance for fiscal 2023, expectations for new capital investments, product launches, and future acquisitions, are forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from those implied by forward-looking statements. These risks and others are described in Central's filings with the Securities and Exchange Commission, including our annual report on Form 10-K, filed on November 22, 2022. Central undertakes no obligation to publicly update these forward-looking statements to reflect new information, subsequent events, or otherwise. Now, I will turn the call over to our CEO, Tim Cofer. Tim? Thank you, Friederike, and good afternoon, everyone. As we exit our fiscal Q3, we're in a fundamentally improved position versus last quarter. Our main focus all year long has been on cost and cash, and the strength of our Q3 performance underscores the good progress our team has made in these areas. We're pleased with our record results and the momentum we're building on our multi-year Cost and Simplicity program. With that, let me start the call with three key messages. First, our quarterly performance. Thanks to our financial discipline and the strong execution by Team Central, we delivered record operating income and earnings per share in Q3, while expanding gross margin, growing market share, and significantly improving our cash position. I want to thank our 7,000 associates for their hard work driving this record performance. Our garden business, which had a challenging start to the season earlier in the year, improved in the Q3 with top line growth, gross margin expansion, and continued market share gains. The strong garden performance, coupled with the ongoing strength in pet, driven by our consumables brands and our short-term actions to cut controllable costs, are the key drivers of our Q3 results. Specifically, our net sales grew 1%, our non-GAAP gross margin improved by 160 basis points, and non-GAAP operating income increased by 20% to $137 million, translating into a non-GAAP earnings per share of $1.75. Our operating income and EPS for the quarter are both all-time highs, both on a GAAP and non-GAAP basis. Importantly, our focus to turn inventory into cash is starting to pay off, as demonstrated by more than $300 million of cash on our balance sheet at quarter end. The second key message relates to the progress we're making on our Cost and Simplicity program. As we've shared on prior calls, we've embarked on a journey to simplify our business and improve our efficiency across the organization by rationalizing our footprint, streamlining our portfolio, and improving our cost structure. Today, we will update you on the successful closure of our private label pet bed facility we announced last quarter. In addition, we will share details about another important project supporting our Cost and Simplicity program. We just announced the sale of our independent garden center distribution business. This sale significantly simplifies our garden business and improves margins while we continue to serve our top three garden retail partners and select other national accounts. We're building a pipeline of projects to reduce cost and simplicity our business, focused on a number of key areas, including procurement, logistics, manufacturing, portfolio optimization, and administrative costs. We'll share more about our plans for fiscal 2024 in our November earnings call. Finally, our guidance for the balance of the year. When we updated the market in May, we took a prudent approach to guidance, given the poor start to the garden season, driven by weather and retailer inventory dynamics. We were cautiously optimistic that garden could improve in Q3, and indeed, our teams delivered. While favorable weather was hit-and-miss during the last few months, we navigated the quarter well across both segments. Taking our record Q3 performance into account, coupled with the early visibility we have into the Q4, we're raising our fiscal year non-GAAP EPS guidance to $2.55 or better. This implies delivering modest Q4 EPS in what is typically a small quarter, albeit this year benefiting from the 53rd week. Let's look at the quarter from a segment perspective, starting with pet. Overall, we're pleased with our gross margin, operating income, and market share performance. Sales continued to grow in our pet consumables business across all categories, including dog and cat, bird, small animal, and equine. Offsetting the mid single-digit increase in pet consumables, we saw ongoing downward pressure on pet durables, with declines versus prior years in the teens. This aligns with the softness the overall industry has experienced in enclosures and other durable supplies, driven by the slowdown in pet ownership, affecting most species after the COVID spike. Thanks to our continued work over the last couple of years to build capabilities around consumer insights, brand marketing, innovation, and category management, we took market share in many of our key categories, including dog toys and treats, bird, small animal, and equine. E-commerce remains the growth driver for the category at the expense of pet specialty. Our efforts to lean into online and digital are paying off, as demonstrated by a double-digit increase of our e-commerce sales, which now represent 25% of total pet sales. Given our investments in digital marketing excellence and the talent of our e-commerce teams, we once again grew online market share broadly across many of our categories, including dog treats and toys, equine, flea and tick, small animal, and bird. Our pet brands continue to strengthen, with our brands outperforming private label, driving positive mix shift in our portfolio to generally higher-margin branded products. Pet ownership data suggests that while total pet ownership is down slightly versus the COVID peak in 2020, pet parents are more engaged than ever in their pets' lives. Pet parents stated that spending on their pets is the least likely of all spend categories to be reduced over the next 12 months, underscoring the resilience of the category, even in a recessionary environment. All of these dynamics contributed to POS growth in the low single -digit and helped to normalize the inventory dynamics across our pet retail partners. Moving now to our garden segment. Following a challenging start to the season, we're pleased with the achievements of our garden business in the Q3, growing versus prior year on all key financial metrics, including net sales, gross margin, and operating income. We also continued to grow market share in wild bird and held share in grass seed and the overall garden category. Our teams executed well, and we saw strong performance, particularly in May and early June, when the weather was more favorable. Live goods, packet seeds, and wild bird were the primary drivers for the sales growth. Retailers continued to reduce their inventory and are shifting to just-in-time replenishment, as demonstrated by stronger POS than net sales. Certain retail partners decreased their lawn and garden off-shelf display activity for the season. Foot traffic across home centers and mass channel remains below prior year, although improving over Q2. Garden e-commerce sales are growing faster than brick-and-mortar as consumers shift more and more of their purchasing to online. While still small, our e-commerce business increased more than 20% and now represents over 5% of total garden sales, thanks to strong improvement in our retail media efforts, expanded assortment, winning content, and enhanced ship-to-home options across our top three customers. Turning now to our Cost and Simplicity program. Let me briefly recap. We're on a multiyear journey to reduce cost and simplify how we operate. We have a meaningful opportunity to better leverage the scale of our business. We're building a pipeline of projects across a number of key areas, including procurement, manufacturing, logistics, portfolio optimization, and administrative costs. We expect to reduce complexity, which means fewer SKUs and fewer facilities. We seek to lower cost of goods sold through lower logistics costs and better procurement, lower administrative costs by leveraging our scale, and we plan to shift more of our focus to our branded pet and garden consumer products. We believe the result of these efforts will drive higher margins and generate more fuel to invest in organic growth and advantageous M&A, supporting our long-term financial algorithm. In our Q2 call, we shared the first project of our Cost and Simplicity journey, the closure of a manufacturing and distribution facility in Athens, Texas. Our teams executed on plan and on budget. The Athens production facility is now closed. The warehouse is empty and has been returned to the landlord. Pet bed manufacturing has ramped up, and we're now shipping all customers from our Arden facilities. The entire team has done an amazing job managing the elements of this transition. We expect this project to deliver a cash-on-cash payback in less than two years and drive a step-up in operating income for our more streamlined pet bed business. As I mentioned earlier, today, we're pleased to share yet another example of our Cost and Simplicity program in action. Just yesterday, we closed the sale of our independent garden center distribution business to BFG Supply, a leading national garden distributor specializing in the independent garden channel and regional chains. The independent garden center channel is highly complex to serve. With 4,500 SKUs, 4,400 customers, and over 6,000 stores, this channel represented less than 5% of our Garden net sales and was dilutive to our Garden operating income margin. Going forward, BFG will distribute our branded garden products to the independent garden center channel. This partnership will allow both companies to focus on their core strengths. While we're exiting the fragmented independent garden center channel, we will retain our third-party distribution business with our largest three retail partners and select other national accounts. This is an important step to meaningfully simplify our garden business, as it enables us to accelerate our Cost and Simplicity program and optimize our customer service footprint. As a consequence of this sale, we also intend to close our Portland, Oregon, garden distribution facility by the end of this calendar year. We are extremely proud of the men and women who have built and grown this business throughout the years, thankful for their many contributions. We're pleased that many of them will continue to service this channel as they transition to BFG. This sale aligns to our strategy to be a more focused, higher margin, branded consumer products company, and is just one of many projects on our journey. Now, before I turn the call over to Niko, let me say a few words about our outlook for the remainder of the year. The Q4 is off to a good start, and we expect our focus on cost and cash to continue to yield benefits. This gives us confidence in delivering fiscal year 2023 non-GAAP EPS of $2.55 or better. To summarize, we remain confident in the competitive strength of Central and our Central to Home strategy. Our record Q3 results underscore our team's ability to execute and navigate in challenging times, and we remain bullish on the fundamental trends that support long-term pet and garden industry growth. With that, let me turn it over to Niko, who will share more details of our Q3 results. Niko? Thank you, Tim. Good afternoon, everyone. Building on Tim's remarks, I'll share with you details of our record Q3 results for fiscal 2023. Net sales increased 1% to $1,023 million, with the largest contributions coming from dog and cat, live goods, and packet seeds. Non-GAAP gross profit reached $326 million, an increase of 6%, and non-GAAP gross margin expanded by 160 basis points to 31.9%, driven by both segments due to pricing actions and cost management initiatives offsetting commodity inflation. Non-GAAP SG&A expense was $189 million, compared to $194 million in the prior year, and as a percentage of net sales, decreased 60 basis points to 18.5%. In Q3, we incurred $14 million of one-time charges related to the closure of our pet bedding facility in Texas, the majority of which were non-cash. These charges include severance, liquidation of inventory, and related intangibles. We expect an annual benefit of $4 million-$6 million, a cash-on-cash payback in less than two years, and more importantly, a material step up in operating income contribution from our streamlined pet bed operations. Non-GAAP operating income increased by 20% or $23 million, to a record $137 million. A non-GAAP operating margin increased by 220 basis points to 13.4%, driven by our pricing actions, productivity efforts, and lower commercial spend. Net interest expense of $13 million was $1 million below the prior year quarter. Non-GAAP net income increased by $18 million to $94 million. Our non-GAAP earnings per share grew $0.36 to an all-time high of $1.75, from $1.39 in the prior year quarter. GAAP EPS was $1.56, adjusted EBITDA increased to $166 million, up from $141 million. Our tax rate was 24.4% compared to 23.7% in the prior year quarter, primarily due to a lower tax benefit from stock-based compensation and a higher impact of nondeductible executive compensation versus a year ago. Turning now to the segments, starting with pet. Pet segment sales of $503 million were essentially in line with our prior year. Our dog and cat treat and toys, as well as our wild bird businesses, performed strong, offsetting lower sales in our durable pet products across several categories. Think of fish tanks, small animal enclosures, and pet beds, as well as weather-related softness in our outdoor cushions. Non-GAAP pet segment operating income increased 18% to $74 million. Non-GAAP pet operating margin expanded by 230 basis points to 14.7%, thanks to our pricing actions and cost management initiatives. Pet segment adjusted EBITDA was $84 million, compared to $72 million a year ago. Let's switch to garden. Our garden segment had a great Q3, with sales growing 2% to $520 million, driven by our live plants, packet seed, and wild bird businesses, offsetting lower sales in distribution and grass seed. Garden segment operating income increased 17% to $88 million, and garden segment operating margin expanded by 210 basis points to 16.9%, driven by improved pricing, favorable product mix, and our focus on cost. Garden segment adjusted EBITDA grew to $99 million from $85 million a year ago. Now moving to the balance sheet and cash flows. Cash and cash equivalents at the end of the Q3 increased by $137 million to $333 million. Thanks to our financial discipline and our focus on turning inventory into cash, net cash provided by operations was $325 million for the quarter, compared to $190 million a year ago. This is a record for Central. For pet and total company, our inventory is down, while for garden it is up in dollar value and flat in units. Additionally, the spread versus prior year has narrowed significantly, we're clearly trending in the right direction. CapEx was $11 million for the quarter, 54% below prior year. This quarter, we invested in automation and expansion of our live plants, dog and cat, small animal, and our outdoor cushion businesses. Total debt of $1.2 billion was in line with the prior year. Our gross leverage ratio was 3.1x at the end of the quarter, compared to 2.9 x a year ago, well within our target range of 3x-3.5x. We had no borrowings under our credit facility at the end of the Q3. Depreciation and amortization for the quarter was $22 million, compared to $20 million in the prior year quarter, primarily driven by higher depreciation due to our recent investments in capacity expansion across our businesses. During the quarter, we repurchased approximately 466,000 shares or $16.7 million of our stock. Finally, turning to our fiscal 23 outlook. As we've previously said, this fiscal year, we've tightened our belts. As we've demonstrated this quarter, our teams are working hard on converting inventory into cash. In addition, we are advancing our Cost and Simplicity program to simplify our business and improve our efficiency across the organization to drive higher margins and generate more fuel to invest in both organic growth and M&A, and to support our long-term algorithm. As Tim said, we will share more details on our Q4 earnings call in November. We are now planning for CapEx in the range of $60 million-$70 million, much less than the prior year. The majority of which is carryover and required maintenance. Thanks to our strong financial position, with more than $330 million of cash on our balance sheet at quarter end and an unused $750 million credit facility, we remain on the lookout for great growth and margin accretive companies in both pet and garden. We expect a tax rate of approximately 24% for the year. Given our Q3 record performance and early visibility we have in the Q4, we are raising our outlook and now expect non-GAAP EPS for the year to be $2.55 or better. This implies delivering modest EPS in the Q4. Our guidance reflects our belief in the competitive strength of Central and the long-term trends supporting growth in the pet and garden industries. Fiscal 2023 will have 53 weeks, compared to 52 weeks in fiscal 2022. As always, this outlook excludes any impact from potential acquisitions, divestitures, or restructuring activities undertaken during the year. With that, we'd like to open the line for questions. Thank you. Ladies and gentlemen, at this time, we will be conducting a question and answer session. If you'd like to ask a question, you may press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment while we poll for questions. Our first question comes from the line of Bill Chappell with Truist Securities. Please proceed with your question. Thanks. Good afternoon. Hey, Bill. Hey, Bill. I just wanted to, to zero in a little bit on the, the exit of part of the distribution business. Maybe, and I, and I assume it, it will happen at fiscal year-end, and so it's not in this year's numbers. You know, any kind of idea of I guess I'm trying to understand how it works, of you're still distributing for three large retailers, but I guess, out of different warehouses to the other ones. Would you look to do anything like this on the pet side going forward? Hi, Bill, it's J.D. Thanks for the question. The distribution business that we are exiting is the distribution business to the independent garden center channel, which, first of all, it's a big move for us. This is a business that we've been in since Central was founded in 1980. It's a business that we know well, and it's near and dear to our heart, but I think this is us acknowledging that it's far too complex, and this will allow us to focus on our core competencies. The independent garden channel that we're talking about here, this is your nurseries, garden centers across the country. 6,000 stores altogether, roughly 4,000 customers, 4,500 SKUs altogether, you know, just a complex business, and it represents 5%, less than 5% of the overall garden business. We will continue to distribute to the big three, as Tim said in his script, and some other select national accounts. The SKU count to those larger customers is actually much smaller, and the volume is much higher. We will continue to distribute out of those same distribution centers. We mentioned in the script also that we are exiting one of our distribution centers. We'll continue to distribute for the big three out of the existing distribution centers, so that won't change. The sale is effective immediately, so we signed that deal this week, and we will be in a transitional services agreement with the acquiring company for the next several months until they start to service and fulfill from their own distribution centers. Bill, this is Tim. I'll, I'll build on everything J.D. said. Look, I think this is, first of all, a real win-win deal for both Central and for BFG. BFG is a great partner and, and distributor, and they've been in this space a long time. Really, this is about playing to each company's strengths, and that's what BFG is. They, they are a, a, a distributor, a full line distributor. That's what they do, and they do it well. For us, this obviously represents, Bill, another important step in our Cost and Simplicity program towards simplifying our company, towards shifting our portfolio to a higher margin branded consumer products. It's also an accelerant for our supply chain and network optimization program. As you heard me say in the prepared remarks, one of the immediate consequences is we will close another facility in Portland, Oregon. It's, it's a nice move for us. It's also a nice move for, for BFG, obviously. We're, we're quite pleased with that, and I think a strong indication of our seriousness and our commitment to continue to evolve this portfolio in favor of our strengths, which is consumer products, great brands and great margins. With regard to the second half of your question, in terms of any read across for pet, our pet distribution business is very different than, than the portion of garden that we sold. It's a, it's a larger business, more profitable business than the business we sold. You know, as we sit today with that business, we continue to be happy with it. At the same time, Bill, we're gonna continue to kick the tires on our portfolio, looking for opportunities for optimization in line with our long-term strategy to, to build value. Got it. Then just one more on garden. Well, I know Scott said this morning that they felt like POS where the category was up kind of mid single -digit for the year, and they also talked about some weakness in grass seed. I just wanted to kinda compare notes of what you were seeing, and if maybe it seemed like your grass seed business gained share, and so maybe that was just the offset. Any kind of color around that would be great. Sure. J.D. again here, Bill. You're, you were right. Grass seed gained share for the H1 of the year, and in Q3, we held share. Overall for fiscal year 2023, we took share in the category. The, you know, in terms of overall POS, we're in the same range, mid single -digit for the full year. Great. Thank you. Yeah. Our next question comes from the line of Brad Thomas with KeyBanc Capital Markets. Please proceed with your question. Hi, good afternoon, nice quarter here. Thanks, Brad. My first question was just gonna be around, around the gross margin. You know, as, as I go back in, in our model and look at, you know, the, the past decade the Q3 gross margin here, really, really coming in at, at, at one of the strongest levels, you know, in, in history. Hoping you could just add a little bit more context to, you know, where, where pricing is today, you know, versus how much of this is mix, versus some of the, the productivity initiatives that you have in place, and how you're thinking about gross margin going forward. Thanks. Yeah, Brad, the majority of it was, was pricing. Units continue to still be down. Again, our, our cost savings initiatives have played out as well. If you look at, you know, we've been laser focused on cost and cash, as Tim and I have mentioned the last few quarters. You, you hit the nail on the head, you know, the last piece of it was, was favorable mix that helped our margins there. You know, going forward, you know, I've said this a bit like a broken record, you know, we're always looking to expand margins. We are very focused on it, you know, we're gonna continue to drive that, you know, going forward. Look for more to come. That's great. Thanks. Then just, you know, to, to follow up on kind of the question, you know, Bill's question earlier, talking about sort of volume trends. I guess, you know, we're seeing some green, green shoots, if you will, in many home-related areas that had tough pandemic comparisons. And I guess I was hoping you could just talk a little bit more about maybe your optimism that we're through the toughest part of things and, and may have better growth prospects on the horizon. Yeah, Brad, look, no doubt about it, these last couple of years, we saw, you know, I'd say three dynamics, the third being on garden. Meaning, one, you had kind of a post-COVID consumer behavioral shift going on. Two, you had really unprecedented inflation back-to-back two consecutive years, which of course, we matched with pricing in order to protect our margins and still deliver value to our consumers. Then certainly on the garden side, we've had a couple of years of less than optimal weather. So all that has put pressure on units takeaway. you know, I think as you'll start to look forward, you see that inflationary cost envelope getting more and more benign. This year, the inflation still hit us, and we had to price, and we priced kind of mid single -digit across the enterprise. Obviously, category by category, it differed. We saw a corresponding decay in, in volume, kind of mid single -digit. We're now at a point where we're seeing that cost inflationary pressure begin to mitigate. That sets up a different dynamic next year, really, in all three of those variables. One is, I think a lot of that post-COVID consumer behavior starts to roll off, and we can get to a little bit more normal, as opposed to an unfavorable situation versus during COVID. Two, I mean, who knows on the weather, but it's hard to think, you know, three years in a row of rough weather. Then I think you're not gonna have as much price elasticity going on. The one other call-out on our business is on the pet side, and it's related to durables versus consumables. Durables, as you know, are most closely aligned with pet ownership and adoption. Here we are seeing, and I said it in my prepared remarks, more downward pressure in the teens on the durables. Again, think fish tanks, small animal enclosures, pet beds, et cetera. I think that probably still hangs with us through the front half of 2024, given pet ownership dynamics. With the exception of that, I think we get to a, to a more favorable environment on, on unit takeaway as we roll into 2024. That's very helpful. Thanks so much, Tim. Our next question comes from the line of Jim Chartier with Monness, Crespi, Hardt. Please proceed with your question. Hi, thanks for taking my question. Yeah. Where do you feel like you are in terms of, you know, inventory destocking at retail for both businesses? You wanna go? Sure. I'll, I'll, I'll jump in first. It's J.D., Jim, then I'll turn it over to John. The, you know, we've seen significant destocking over the course of the year in a few different ways. You know, 1, the retailers devoted less space for off-shelf displays this year. They also were seeing a difference in the way they stock the stores at the beginning of the year, their initial orders. Also on replenishment, they moved to more of a just-in-time type replenishment model, which was the first for us. We were adjusting on the fly during the course of the year. Now our units are, you know, our, our in-store inventories, the units are down versus prior year, down, you know, high single- digit, let's call it. We feel like now that the, the correction has taken place, and we're in a good position going into fiscal 2024. John? Yeah, for, for pet on the pet side, you know, if you go back to Q1, I would say, you know, destocking, you know, was, was, did happen. You know, as we got through Q2, I think, we still saw some. Q3, we're normalized, I would say. We feel really good about where retail inventories are, you know, on the pet side, you know, as we come out of Q3 and throughout Q3. Yeah, I would, I would just add our own, our own inventories are down, you know, total company, about 2%. ... garden, garden is up 7.6, but flat in units. We still see some inflationary pressure, you know, within, within our cost. Then pet was down, like, 13%, year-over-year. We're, we're working ours down as well, and feel like it's, it's really headed in the right direction, Jim. Great. Just, you know, you know, seems like there's, you know, like a 7%-8% difference between garden POS and your shipments, right? As we kind of lap that next year, you know, do you feel like that becomes a tailwind, where POS is positive, but you're lapping, you know, shipments that were lower, because of the destocking? Is there, you know, kind of a mid-single-digit tailwind to sales in those businesses next year, shipments and POS are more aligned? Jim, you know, I don't have a crystal ball, so that one would be tough to predict what the future looks like. But I will say this, you're absolutely right. There is a, you know, I'd call it, you know, a 6%-7% gap between POS and shipments. You're right about that. We've seen destocking. We think we're in good position going into next year, but in terms of projecting that as a tailwind, you know, I'll stop short of that. Okay. Then just, you know, Niko, you know, you guys mentioned $330 million of cash on the balance sheet. You know, how are you thinking about kind of the pace of, you know, share repurchases going forward? And then what's kind of a good interest rate to use on the cash balance? Yeah, you know, we will continue to be pretty opportunistic on share repurchase. You know, we'll meet with our board next week and, and probably discuss where and how much we want to buy. You know, we have a matrix that we submit during the open trading period. As far as the cash goes, you know, we're earning in that 4%-4.5% range in terms of our investments there. I would use 4%-4.5%. Great. Thank you. Yeah. Our next question comes from the line of Andrea Teixeira with JPMorgan. Please proceed with your question. Hi, this is Shabana Chaudhary on for Andrea. How are you? Good. Doing well. Congrats on the good quarter. Very quickly, couple questions. Your top line trends. Now that we're exiting garden season, seems like you are passing on the beat in the quarter. But then again, it seems at the same time, the pet category has been decelerating a little bit. If you could just give us more color on that. Secondly, I just wanted to clarify something. Your fiscal 2023 guidance now of EPS, non-GAAP EPS of $2.55, can you give us what the GAAP EPS version would be? Because previously, you've mentioned it was $2.35 for the GAAP EPS, just to bridge the two. Thank you. Okay. Well, I'll start. You wanna lead? Sure. $2.35 is actually non-GAAP. Right. as well. Yep. That matches up with the $2.55. $0.20 raise. Yeah, $0.20 raise. that was largely because, you know, when you look at our H1, we were behind, you know, prior year, about $0.74, and we felt it was the right thing to do to guide down because the H1 of the year was a real challenge. you know, the Q3 has ended up being a record. we've seen a nice extension in terms of weather, and the garden season has sort of played out, you know, late because the weather stayed mild. we had that play out well. the $2.55 is apples to apples with the $2.35. Thanks for clarifying that. Yep. You know, in, in pet, the, the headwind that we're facing, you know, is durables, right? If you think about the category, it's 75% consumables, 25% durables. You know, the consumable business for the category, you know, was, was roughly flat, but durables was down, you know, double- digit. If you think about Central, you know, our business is more 80-20. Think about it, we're actually 82% in the latest, latest quarter, but think 80-20. Our consumables were up mid single -digit, and our durables were down high single- digit, right? That's a headwind for the category, and it ties to, you know, the overlap in pet adoption. You know, I think inflation plays a little bit of a role in that, you know, as some of these items are discretionary spend. You know, as we look forward, it certainly is a near-term headwind, you know, but, but I think, you know, as we get through the H1, we feel much better about the category, and we also feel very good about the long-term projections for the category. Thank you for that, and I'll pass it on. Our next question comes from the line of William Reuter with Bank of America. Please proceed with your question. Hi, I just have a couple. To make sure I understand this, the business that you're exiting of the independent garden, retailers, that will be 5% of the garden sales, that are going away, but essentially that wasn't really profitable, so maybe you actually. It's additive to your EBITDA. Is that right? Yeah, that's right. I would say it was profit-challenged segment of the business. I'd say that's fairly accurate. Okay. Then with, with the exit of this relationship or the transition, were there proceeds, from the, the buyer or the entity that BFG that's taking this? There were, and at this point, we're not disclosing the sale price. There was a sale price. You know, what we can say is, you know, I think a fair and good win-win proposition for both sides. As you noted and J.D. confirmed, this was a business from a sales side, less than 5% of total Garden and de minimis on the operating margin side. Okay. When you were discussing the outlook for hard goods on the pet side, you kind of said that I think that it could be a couple more quarters of weakness. Is that more based upon weakness at POS? Or is it more that you think your shipments are going to be weak because inventory levels remain high in those categories? It's more POS and, you know, syndicated data that we get. You know, our inventory levels, we've made a ton of progress on inventory levels and continue to make progress on the pet side. Yeah, really, John said it, absolutely right. What I'd point to is really the underlying consumer fundamentals supporting that unfavorable trend, right? We have seen off the COVID highs of 2020 and 2021, we've seen pet ownership drop down a couple of points. You know, these hard goods are most correlated with that, you've just got a built-in tailwind. We've seen this in the past, in other recessions, in times where pet ownership dips, there tends to be, you know, a four to six quarter lag on or impact on the durable side, we're just cycling through that. It is more of a POS thing, fueled by that underlying consumer behavior. You know, we don't have a complete crystal ball, I would think by the middle of next year, we've worked through that. Okay. I guess inventory levels at retail in those categories of your products, they are not out of line. They're kind of okay at this point, so you're selling? They're not. That's correct. That's correct. All right. That's all for me. Thank you. Thanks. Our next question comes from the line of Hale Holden with Barclays. Please proceed with your question. Afternoon. I just had two questions. The first one was related to a comment you made around some of the garden sales moving online this season. I was wondering what categories that was. The second one is if you could just give us a sort of updated thoughts around what the M&A environment looks like. Sure. This is J.D. I'll take the first part of that question around e-commerce. Overall, e-commerce continues to grow in Garden. It's growing at a faster rate than our brick- and -mortar business. It's still overall a relatively small percentage of our business, growing 5% and growing. Quarter-to-quarter, that business is growing at +20% each quarter. It's one of the fastest growing segments, the fastest growing segment. You asked which SKUs, which products? It's really across our entire portfolio. We're finding that the consumer, especially during the pandemic, some consumers started to shop online, and we're seeing that become very sticky, and they're continuing to do that post-pandemic. Second part of the question? Yeah, I can take that. This is Niko. Yeah, as far as, you know, M&A, you know, it's, it's been slow the last few quarters. We're seeing, you know, a little bit of a pickup, and I think it's also reflective in the, in the public markets. You're starting to see a little bit more IPO activity. It's still much slower than, than what we've become accustomed to, during the pandemic. It, it's okay. We're gonna be patient, and, you know, we're gonna, we're gonna look for the right deals to do, and we'll just continue to, you know, accumulate cash on our balance sheet to, to get those deals done. The firepower is there. Yes, for sure. Firepower is there, 4.5%. I get it. Thank you very much, guys. Thank you. This was our last question. Thanks, everyone, for joining our call today. The IR team is available for any follow-up questions you may have. Have a great rest of the day. Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.