Good day, and welcome to The Scotts Miracle-Gro Company's second quarter earnings conference call. As a reminder, today's call is being recorded. At this time, I would like to turn the conference over to Jim King. Please go ahead, sir. Thank you, Madison. Good morning, everyone. I'm Jim King, and I'd like to welcome you to the Scotts Miracle-Gro second quarter earnings conference call. This morning, joining me is Chairman and CEO, Jim Hagedorn, Chief Financial Officer, Cory Miller, as well as our President and Chief Operating Officer, Mike Lukemire, Chris Hagedorn, Group President of Hawthorne, and several other members of the management team. In a moment, Jim and Cory will share some prepared remarks, and then we'll open the call to your questions. I've already scheduled time with many of you after the call to fill in some of the gaps. Anyone else who wants time can call me directly at 937-578-5622, and we'll work to get you on the calendar as quickly as we can. One bit of IR housekeeping before we begin. Cory and I will be participating in the William Blair Conference in Chicago on June 9th. As many of you know, historically, we've used this event as an opportunity to update the investment community on the state of the business coming out of the critical month of May, and our current intent is to do that again this year. We'll publish more details related to the date and time of the event a couple of weeks in advance. With that, let's move on to today's call. As always, we wanna make you aware that we will be discussing forward-looking statements, so I want to caution everyone that our actual results could differ materially from what we say. Investors should familiarize themselves with the full range of risk factors that could impact our results, and those are filed in our Form 10-K, which of course, is filed with the Securities and Exchange Commission. I also want to remind you that today's call is being recorded and an archived version of the call will be published on our website. With that, let's get down to work, and I'll turn the call over to Jim Hagedorn. Jim. Thanks, Jim. Good morning, everyone. Our call this morning will be different than normal. Our prepared remarks will be shorter, and Cory's comments will be sandwiched between mine. I'll start by sharing a few high-level thoughts about both businesses and the implications for our guidance. Specifically, I wanna discuss how we navigated the first half, what we see coming in the second half, and how it impacts our current outlook on the year. Then Cory will cover the numbers. Later in the call, I'll discuss the impact the external environment is having on how we run the business. More specifically, I'll outline the steps we're taking to get our margins back in line. In addition to further pricing actions, we're implementing aggressive steps to improve productivity and maintain our financial flexibility as the U.S. economy heads towards some tough sledding. Let me start with the U.S. consumer segment, which had a very strong second quarter and sales consistent with our guidance. In fact, we were tracking to do even better, but lousy weather resulted in fewer replenishment orders in the second half of March. Our pricing strategy initially accomplished what we set out to do, which is cover higher input costs. Resurgent commodity prices after the start of the war in Ukraine added further downward pressure we couldn't cover. Still, though, it was a solid quarter. Because of our seasonality, I know the elapsed time between the end of Q2 and this call makes those results somewhat dated. This morning, we'll share what we know in real time. POS entering May is down 12% in dollars. The slowdown in consumer takeaway led to fewer orders in April from some of our retailers. As a result, we need shipments to improve double digits for the balance of the year to be flat against last year's levels. I wanna be clear, that number is achievable. In the first seven months of the year, we faced POS comps of +35%. From now through year-end, the comp is -9%. Still, finishing the year in positive territory is an admittedly aggressive goal. That's why we see the low end of our sales guidance, ±2% from last year, as a pretty good outcome. As you remember from our last call, we were hopeful we'd have upside to our guidance. You don't need to be a meteorologist to understand why the season is off to a rough start. In most parts of the country, I'd say spring was delayed by at least three weeks. The good news is the momentum now appears to be on our side. Not only have we seen explosive growth over the past two weeks, what's interesting and encouraging is that our earliest season products are what's going through the register right now. A year ago, those units would have moved three or four weeks ago. This is reinforcing our belief that the biggest challenge has been weather. POS in key Southern markets that was down double digits just three weeks ago, is now just mid-single digits down in response to warmer weather and retailer promotions that had been delayed until after the Easter weekend. Entering May, POS is down 13% and 20%, respectively, in the Northeast and Midwest. That's not far from where the Southern markets were a month ago. While the season has been compressed, it's important to remember that lawn and garden season typically stretches well into mid-June in these markets, sometimes later. We're confident we'll see POS levels continue to gain ground in the weeks ahead. At Hawthorne, consumable products like nutrients and growing media continue to outperform durables. This is an indication that growers are still engaged, but not yet in expansion mode. While we're seeing modest signs of improvement in the critical West Coast markets, the trends in this business have us tracking toward the low end of our guidance. That said, we're already seeing the benefit of our acquisition of Luxx Lighting, demonstrating this brand's value to experienced commercial growers. In fact, all of our recent acquisitions are showing strong growth. Rhizoflora, HydroLogic, and True Liberty Bags are all up triple digits since we closed on them. In addition, our European lighting business had a strong start to the year, and that business is on pace for a significant full-year growth. LED lighting, an area we brought meaningful innovation to the market, is starting to become a critical category for the professional non-cannabis horticulture market in Europe and Canada. We continue to explore opportunities to gain further ground going forward. That's what we know on a real-time basis, but I also wanna share what we don't know. Because of the late start to the spring, we don't have an accurate assessment right now, for example, on the potential impact of product mix this season on gross margins. While we always expected to see a negative impact this year from fixed cost leverage because of planned lower utilization rates, we can't get an accurate read just yet of whether that impact will be in line with what we had assumed. The delayed start to the season also has made it difficult to know if and to what extent inflation and other issues are impacting the consumer. Remember, an 8% decline in units was already baked into our guidance. While we know other CPG companies are seeing some price elasticity recently, we simply don't have enough data yet to have an informed view. Year to date, we're not seeing any trade down to private label, and most of our products appear to be holding or slightly gaining share. When you combine those facts with a commodity outlook that seems to change by the week, it makes our earnings outlook harder to predict than usual at this point in the year. We have concluded, however, that adjusted earnings of $8 a share seems like a challenging target. Given the way the stock has been trading, I don't believe that comes as a surprise. What is an accurate target? Frankly, there are simply too many moving pieces right now to give you anything more than an educated guess, and I don't wanna do that right now. To provide you with a more informed point of view, we need a few more weeks since 55% of our POS is still in front of us. I'll resume my comments in a few minutes, but let me pause for now and turn things over to Cory. Thanks, Jim, and hello, everyone. Jim commented on several major issues already, and I will dig a little deeper on a few of them. I especially wanna share a little more color on some of the margin issues we're seeing. Let's start on the top line. We were pleased to comp last year's sales number in the U.S. consumer business as we posted sales of almost $1.4 billion. Frankly, we expected to do slightly better than that. As Jim said, weather interrupted the reordering patterns from some of our retailers. This was especially true in the Northeast and Midwestern markets, where the slow break to spring was most pronounced. The strong POS we've seen over the past few weeks is a welcome sight, and reorders are keeping pace with consumer purchases out the door. However, because replenishment orders were impacted well into mid-April, we are facing a year-to-date deficit entering May. I share Jim's belief that we'll reduce that deficit in the weeks ahead, but probably not by enough to get us into positive territory for the year. Our sales team is working 24/7 to prove us wrong, and I hope they do. While the Hawthorne sales decline of 42% was outside of our guidance, organic sales were still essentially in line with what we expected. Let me explain. We had expected to begin selling Luxx lights on day one of us owning that business. The manufacturing issue Jim mentioned caused us to hold shipments of those products until after it was remedied. Once it was addressed, which happened after the end of the quarter, sales have been strong. If we had been able to ship Luxx product in Q2, we would have been roughly in range with guidance targets we provided. While Hawthorne sales on the low end of the guidance is our best case right now, the good news is that we've seen a number of order days over the past month that indicate we're starting to see some improvement in the market. We would expect the frequency of those strong order days to steadily increase as the year progresses. If that does not happen, however, we risk coming in short of our revised outlook. Let's move on to gross margin rate and a broader discussion of cost of goods. The adjusted rate in the quarter was 100 basis points below last year, leaving us 200 basis points lower through six months. The pricing actions we implemented have been largely successful in offsetting our higher costs. I say largely because we started to see a gap developing in March. You'll remember on our last call, I said our key commodities were starting to decline from their highs, and it felt like the worst was behind us. That changed with the war in Ukraine. In my public comments in early March, shortly after the start of the war, I said we had about $10 million-$15 million of increased risk at that time. That risk was not included in our earnings guidance. Since then, the dollar amount has doubled and has moved from risk to reality. We are now likely to see a shortfall of $25 million-$30 million between our pricing actions in the unhedged commodities we still need by the end of the year. Right now, we have about 80% of our costs locked for the year, including about 90% of urea. Diesel and pallets remain the areas with the largest exposure. Business segment mix is turning out to be a margin rate benefit to us due to the lower Hawthorne sales. However, U.S. consumer volume over the next two months remains the largest unknown factor that could shape the final gross margin rate. There's not a lot to share related to SG&A. I will say, though, it is likely to decline further than we expected this year. To offset some of the emerging gross margin issues, we've decided to pull back on some discretionary spending and hiring decisions for the balance of the year. We're also planning other actions that will benefit the P&L in Q4 and carry into next year, which Jim will explain in a minute. Also, variable comp is in SG&A, and we would expect that number to be no more than 1/3 of what it was last year and possibly lower. While variable comp is an important reward and retention tool, it also has to align with performance. Below the operating line, interest expense was $9 million higher in the quarter and $17 million higher year to date. The change was driven by higher borrowing levels. Our leverage ratio at the end of the quarter was 3.8 x, in line with what I had suggested on our last call. On a related note, we recently completed a new $2.5 billion credit facility. Of that, $1.5 billion is our revolver, with the balance being a term loan. Combined with our recent bond issuances, we now have about 2/3 of our debt locked at an average interest rate of 3.4%. As you noted in the press release, adjusted earnings per share was $5.03 in the quarter compared with $5.64, and the GAAP number was $4.94 compared with $5.44. Taking a quick look at the balance sheet, the story remains the same as last quarter. Inventory is $575 million higher than this time last year. Again, the drivers are lower volume, particularly at Hawthorne and higher costs within the U.S. consumer business. As it relates to Hawthorne, we had initially planned the year assuming double-digit growth and had been building inventory to meet that demand. While we slowed and in some cases ceased production as we lowered our sales forecast, much of the inventory had already been built or purchased. In the U.S. consumer business, our goal was to be in a better competitive position to meet the needs of our retail partners. Indeed, while we are flushed with inventory, we are seeing signs of stress with some of our competitors who are not able to build ahead of the season. While we accomplished what we set out to do, inventory levels are now higher than we expected as retailers adjusted their shipments in March and April due to the slow start of the season. Depending on what we see with volume in the weeks ahead, we may decide to slow down some of our manufacturing earlier in the year than normal. While this has a P&L impact on gross margin rate, it will help accelerate an inventory improvement. As you can see, there are a lot of moving pieces in the story right now, and they leave us with a higher level of uncertainty than we would normally have at this time of the year. We'll have a great deal more visibility as we move through May. The goal is to provide an update when Jim King and I appear at the William Blair event next month. I'm sure there are other topics you want to discuss, and I'm glad to cover them in the Q&A session, but for now, I'll turn the call back over to Jim. Thanks, Cory. As I said at the outset, I'm pleased with our performance in the first half of the year. We'll know more about consumer behavior over the next few weeks, but so far, what we're seeing reinforces what we've known for years, weather matters. As it relates to Hawthorne, the issue of industry oversupply is one we can't control. We do remain bullish on the category long term and are encouraged by the progress we've been making in East Coast markets where growth has been strong. In both businesses, I'll admit it's been a bit of a whipsaw over the past three seasons. If we sat together in 2019 and predicted the future, none of us would have gotten it right. With all the momentum we saw in 2020 and 2021, we leaned in hard. In our core business, the step change in consumer activity, especially in our growing media businesses, left us without enough future capacity, and we had to address that issue. The lack of capacity in the short term meant we also had to build and hold more inventory to ensure we could service the needs of our retail partners. Given the facts at the time, we'd make the same decisions again. At Hawthorne, the business had doubled in a two-year period, and there was tremendous enthusiasm in the cannabis and hydro space. As markets were expanding on the East Coast, we believe we needed more extensive footprint there. Developing the physical footprint also meant we had to build inventory to serve those markets. Although we knew the growth long term was not sustainable, we never anticipated the level of rapid reversal that we've seen. Clearly, a lot has changed. In the U.S. consumer business, our inventory challenge is not related just to physical units, it's the cost of building them. At Hawthorne, we simply built more than we needed, and we own that, and we're gonna deal with it. Mike and his supply chain team are taking immediate steps to reduce the inventory and turn that inventory into a source of cash. There is one more challenge none of us control, which is commodity prices. By the end of this year, we'll likely have given up roughly 400 basis points of gross margin in two years, despite what we thought were aggressive double-digit price increases. We're taking more pricing in the fourth quarter, and again, it will be aggressive. The truth is, we're still just chasing it, like other people. Even if commodities start to ease, it will take a few years to claw back the margin we've lost. That sucks. We're taking other decisive actions, effective today, to realign the business, reduce our SG&A, and get the company back on appropriate, to an appropriate level of profitability. We've set a target to reduce our overhead structure by roughly 10% before the start of fiscal 2023. The effort will be in all areas of the business. At Hawthorne, we'll shrink the size of our supply chain network and reduce staffing levels. In our U.S. consumer businesses and corporate cost centers, we'll also run skinnier and be more mindful of redundant roles, processes, and other structural issues that can lead to inefficiencies. You should anticipate restructuring charges in Q3 and Q4. I wanna make sure I'm clear here. I am committed to the five pillars of our strategy. Our core brands still offer real growth opportunity. We can do more with live goods and use the category to strengthen our relationship with consumers. Our e-commerce efforts will only provide more opportunity as we move ahead. At Hawthorne, the potential of the hydro category remains strong. Growers will start growing again, and we will still be the provider of choice, thanks to our product offering and technical expertise. Finally, the opportunities in the emerging areas of cannabis are also very real. Our creation of the Hawthorne Collective and subsequent investment in RIV Capital provides substantial opportunity in the long run. In both Hawthorne and the Collective, we see the opportunity to create a leadership position throughout the entire value chain within cannabis, from grower to consumer, as the market expands. Pursuing these pillars and driving long-term value requires us to have the financial firepower to execute. If we sit back and wait for the commodity market to give our margins back, we could be waiting for a while. We're not gonna wait. We're gonna swiftly move to make changes and better position us for success. In addition to commodities, the realities of the broader U.S. economy also require us to be proactive. We've worked closely over the past year with some of the most respected and well-known economists in the country, and they have been telling us for months what other economists started saying only a few weeks ago: a recession is looming. Given the economic headwinds surely coming our way, we have two choices. We can wait and see how windy it gets and then react, or we can get in front of the storm. We choose the latter. Scotts Miracle-Gro is a great company. We have a set of competitive advantages that no one else in our industry enjoys. Frankly, regardless of the category, few other CPG companies enjoy them either. One of those competitive advantages is our people. I'd ask your patience as I wanna deliver a message to our associates for a moment because I know many of them are listening. Our decision to make the moves we are undertaking this week will have a human impact. They're also sudden and probably jolting. I know that. Every member of my team does, too. We regret the impact it will have on some of our colleagues and friends, but I want you to know the fundamentals of our business remain strong, and we have no concern about our long-term financial health. What we're doing here is working to make this a better company, a stronger company. The changes we're making will start at the senior level, people I work with every day. These changes will also result in an organizational structure that is better suited for how we see the business evolving in the years ahead. To our shareholders, I said earlier, you deserve transparency and informed views of our guidance. What you mostly deserve is our best effort to give you a strong return on your investment. The steps we're announcing today are designed to strengthen our business, get us back on the right track, and ensure we maintain the financial flexibility to drive value well into the future. I wanna thank you for your time this morning. I know there'll be a lot of questions, so let's turn things over to the operator for the Q&A session. All right. Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question. We'll go ahead and take our first question from Chris Carey with Wells Fargo Securities. Hi. Good morning, everyone. Hey, Chris. I appreciate the challenges in guiding with so much POS ahead. Certainly, you have a practice of updating the market in June, but you're still calling out expectations for U.S. consumer to track to the low end of the guidance range. There's one thing I wanted to clarify. Jim, you said that you're taking pricing in fiscal Q4, and so do you expect U.S. consumer pricing to be better than this kind of 8% range? And does that imply volumes are actually down maybe in the 10%-11%, and that's the number that we should think about as far as, you know, POS ending for the full year? And then the second related question on U.S. consumer is just around, you know, profit. If you're coming in within the range as you expect, then can you just expand a bit on the lack of visibility on profit? I know you mentioned unhedged commodities. It sounds like mix with some of these higher margin early season categories, still not catching up as a factor. But any additional commentary on that lack of visibility, which seems around the profit line would also be helpful here. Thanks for those two on U.S. consumer. You got it. I'll take, I think, what was the first part of it, which is pricing. No, I think you're probably not correct in that, on the volume side in sort of units or dollars. We're not counting on pricing to sort of give us higher number. I think the guidance we gave sort of would be without pricing. The pricing in the fourth quarter is, I don't know, near double digits, I think. It's double digits. That's just what we gotta get based on what we're seeing costs doing. You know, in regard to sort of just overall profitability, Cory, you want that? Yeah. Profitability and we've had a lot of discussions about profitability publicly and internally here in the last couple months as commodities have been all over the board. We just continue to see pressure from the commodity front on what we face on our unhedged commodities. Costs have been kind of all over the board. When I talked in March, the war in Ukraine had just started. We were trying to get an understanding of what that meant to our business. We think now we've kind of defined what that means, and it is more of a hit to us than we expected in early March. That that's leading to the pricing. That's also leading to some of the uncertainty we have around our bottom line earnings at this point because we wanna see the reaction that consumers have to our products. We wanna see what the commodities do as we buy that remaining 20% that's not hedged at this point and see how all that nets out. We'll just know a lot more here in five, six weeks that will allow us to nail down that number a little more accurately. Look, you know, listen, I was very much involved in sort of, I wouldn't say lack of guidance, but in trying not to be specific on it, largely because we had a board meeting last Friday, and as people were preparing for the board meeting, I asked our operators, you know, they're gonna be pushing for, like, where are we ending? They were all like, "Dude, don't do it." It's just there's too much moving right now. You know, I don't view it as super critical. I just think that if I'm gonna give you a range of like $1.50, it's like we've changed the guidance twice already this year, and I really don't wanna be on the wrong side of that again. When that conference happens in June, we'll have a lot more visibility. We'll understand mix. You know, we're not seeing bad stuff happen with the consumer. You know, this doesn't mean that I/we aren't concerned about cost, but not just this year, but next year as well. But you know, we're not seeing where consumers are buying private label. In fact, I think virtually everywhere we're like gaining share, so you know, relative to private label. I think we're just asking for a little bit of flex here just because I don't wanna give you a wrong number, and I think we're just trying to be safe. Yeah. I just add to that. If you think about the season breaking three weeks later, the changes we're seeing in our year-to-date POS are pretty dramatic over the last two weekends and dramatic improvements. Things look really good. It's getting back to the point of a season that's breaking three weeks later, and we just wanna see how that plays out for a few more weeks. Yeah. I mean, we were talking about, Chris, before the call started, which is, of the sales deficit, like, a third of it, like, disappeared in, like, 10 days. The business is on a pretty good track right now. We just need to sort of keep that weather. Our comps are pretty easy for the rest of the year, and that'll really help. That's very helpful. Cory, can I just with the move in commodities, you know, is there any way to frame your exposure now to urea, resin, diesel as a percentage of your overall COGS? And then, you know, maybe Jim, just, you know, big picture, you talked about inventory levels in Hawthorne being elevated. Would you expect to perhaps do any elevated promotions to clear said inventory and maybe improve your profit, you know, potential going into the back half of the year? That's it for me. Thanks. Yeah, Chris, I'll answer the first question. If you look at commodities, which would include urea, diesel, and resins, as a percentage of our total COGS were about 32%, is what we're forecasting this year to be. I wanna compare that to fiscal 2020 when commodities were 19% of our COGS. The increase in commodities is definitely driving an increase in that percentage of our total COGS. That's pretty dramatic when you look at the three-year period. Yeah, I remember that. Chris looks like he's all excited about taking this one. I'm not that excited. Hey, Chris, this is other Chris. Yeah, look, we're long in a number of categories at Hawthorne. We are exploring a bunch of different promotions, but what we're seeing is, you know, we got retailers that are still holding inventory from kind of the end of last fiscal year. There's only so much work that promotions can do for us in the category right now. We're experimenting with some different programs with retailers to try to move some inventory around. We're also looking at some pretty non-traditional channels to move some long inventory. You know, we recently announced a deal with Psycho. That business has a strong, sort of separated Australian distribution network. We're seeing if we can move some product into Australia and other places. We're exploring a lot of different things to bleed that inventory level down. Promotions will be part of it. They won't be the only part. You know, there are good stories. I think that, you know, some of our partner companies' customers are starting to see, I think good things happen on the West Coast. Some of the high-end guys that we work with, I think are seeing some really good results. The East Coast business is seeing good results. Our qualified reseller, which is kind of a different way of saying a near direct path, that's also seeing good results. I think a lot of this is driven by sort of California. Again, we're hearing from customers that they actually have had a pretty decent last four weeks, and you're starting to see wholesale prices drift up, which I think we're kind of looking at is saying it's a decent leading indicator. The question is: how long does it take to work inventory through the trade, which is pretty high right now. There are glimmers of goodness within the story that you don't have to kick the rocks too hard to see. I don't think it's misleading. It's just that when you're looking at sort of Michigan and California that are pretty seriously down, it just takes a while to work through that. Thanks for all those. All right. As a reminder, that is star one to ask a question. If you find your question has been answered, you may remove yourself from the queue by pressing star two. We'll go ahead and take our next question from Joe Altobello with Raymond James. Hey, guys. Good morning. Can you hear me okay? Yep. Okay, great. I guess the first question, if my math is right, the Q4 price increase that you guys talked about today, that's number four this year. I guess secondly, how much do you expect pricing overall to contribute to U.S. consumer sales this year? Yeah, Joe, the first part of that, this is the fourth price increase in 12 months. It'll be the third one we've taken this fiscal year. Right. We took last August as our first of the 12 months. Okay. What was the second question again? How much will pricing have contributed throughout the year? I think we were saying, Joe, about 8% up to now, so it depends on kind of the phasing on Q4. I don't know. I would say maybe a point or two, you know, would be, you know, for the fiscal year we're in. People are nodding on my couch. Okay. Thank you. I probably add another point or two, something like that, Joe. Call it around 10%. That's helpful. I guess, secondly, and maybe more importantly, big picture question on Hawthorne. Does the current environment make you question at all the long-term opportunity or attractiveness of this business? Does it impact your thinking on the likelihood or timing of a potential separation of that business? Well, you know, since I'm related to the boss, you know, I would say, he's younger, he's a nicer guy than I am. He's been through less drama. I can see that he's not enjoying sort of this journey, you know, the idea of when everything's great and you feel like a genius, he seemed pretty happy then. I think, you know, I warn people, don't look at the stock price too much because when it's bad, you'll think you're, you know, the dumbest dude on the earth. You know, I think what's happened is COVID. You know, to be honest, and let's not make excuses. I own. I have a sign in my bathroom my father gave me, I think when I was promoted to president of the company back a long time ago. It says, you know, "Horace to Jimmy: Someday this will all be your fault." I'll take the credit for, you know, if people are angry, you know. I'm the CEO, I'm responsible, not anybody else. I have partners who work for me and do a great job, and are doing a great job dealing with, you know, a very bumpy ride. If you look at just what happened, we had 10 years of growth in consumer in two years. We thought we'd give some of that back last year. We didn't. We gained, you know, 10%, I think, roughly in unit volume last year. We had 100% growth in two years at Hawthorne, and we expanded our footprint. We probably beat our chest a little bit. I, you know, it's one of those things that it didn't feel crazy at the time. I think we basically were looking to enable the business. We've now had sort of this year and 2018 and, you know, I think it's just, it's a lot more volatile, I would say, than sort of our consumer business, which ultimately still gets me to the point where I think the opportunity. I know the opportunity is there. My team is not sort of looking to pull back on our five pillars. I do think separating the business probably is helpful. You have, you know, a much more steady-eddy business, high cash flow that people understand real well. I think the cannabis side of the business, that people, I assume the investing community can sort of understand that at least until federal law and sort of more maturity creeps into that business, that it could be a little more volatile. I think we're working, we continue to work toward that separation. I don't see it as being farther off. I do think that, you know, I did something unusual. You know, I went like three weeks ago down to D.C. and yelled at senators and, you know, said, "Do your goddamn job, please." You know, there's billions of dollars being invested in this space by us and others. You know, with 280E and banking being, you know, a real drag on what's already, you know, a volatile business, particularly in the time of COVID. You know, in addition to that, you know. Joe, this is just mind dump a little bit. You know, the supply chain is a little bit longer. You know, we like the durable side of the business. We've done what I'm really proud of in the LED market. You know, I think we're the, I'm pretty sure we're the global leader in LED horticultural lighting in the world. Very proud of what everybody's done here to create that business. The lead times are longer and the vulnerability to people saying, "I can't make money temporarily." Now, again, as I said, I think we're starting to see wholesale prices creep up, and a lot of the people who we are very friendly with, you know, at the high end of the market, have done well through this period. It does make us a little more vulnerable to a market downturn when we have chosen to be powerful in the sort of technical side of the business. Regret it? No. I think it's, you know. Before the call started, I said, "Goddammit, it's been a bit of a ride here." You know, I don't know, Joe, if that was helpful. Chris is raising his finger. I would. Yeah, no, I'd like to add something. Just, you know, I guess elaborating on a little bit of what Jim said. Look, obviously, running the business when the business is going through the kind of disruption it is right now is a lot less fun than when you're kind of posting consecutive 70% growth quarters over and over. That I think goes without saying. That being said, look, the opportunity that we see here is still in front of us. Everybody at Hawthorne, I think, is still pretty optimistic despite the current market conditions. As Jim said, you know, I've spent a long time on the phone with a guy from California who is really one of the preeminent kind of players in the California cannabis industry, and has been for a long time. He's beginning to see positive results. Again, there's a long tail from when cultivators start to see their businesses turn around, they start to become kind of enthusiastic about reinvesting in their businesses. That sell through retail, and then it finally reaches us. But when we look at the emerging markets here, I mean, we've got, you know, New Mexico, and these are all small bases. New Mexico up over 250%, Pennsylvania up over 120%. There's still a lot of runway here as the market kind of rebalances, I think, a little bit away from more traditional markets like California, Michigan, Oregon. We're optimistic. It's tough managing through this, and it forces us to make some decisions I wish we didn't have to make, just to run the business more efficiently. The long-term outlook, I think for us, is still super positive, and we're really excited about the business. I think that's reinforced by the fact that we continue to invest because we can get businesses we love at much more advantageous prices. Okay. Great. Thank you, guys. All right. We'll go ahead and take our next question from Jon Andersen with William Blair. Hi, everybody. Hey, John. I wanted to ask about POS trends that you kind of talked about in the trends so far. You mentioned weather a number of times, and clearly that has been a major factor. I'm wondering how you're thinking about kind of the consumer behavior and this year being a year where there's more kind of ability to spend time away from home, returning to travel and experiences versus kind of locked up in and around your home and buying products that support, you know, that. Is that a dynamic that you think could be affecting consumer engagement as well, and how do you discern that? I would say that we're seeing more return to the weekend. During COVID, we saw people buying during the week. We're seeing it during the weekend, but we're not. You know, when the weather's hot, they're not necessarily going away yet. We're still having people engage on some of the early market, like the crabgrass preventer. Usually, that's done in March. It's the highest index fertilizer product as of last week. So that tells you that the season has really just begun. You know, John, it's a very fair question. You know, I think we ask ourselves, especially in the absence of data, you know, 'cause it just seems like, you know. This feels like if we're instead of May 1st, it's like April 1st and we're trying to call the year. Clearly, consumers. They had a little bit more choices last year. Remember, like, basically people who stopped wearing masks started doing stuff, and it went up. Our research says that homeowners are not looking to spend sort of less time in maintaining their yard and garden. You know, I think that we just don't know, and it's pretty early. I, you know We are seeing a tendency to buy more on weekends like it was before COVID. That's for sure. Our research says that consumers haven't walked away, and they still love lawn care. You know, John, part of it is promotions. You know, we worked really hard with retailers to get them to agree to push, I mean, you guys will remember that, you know, you know, we were spending back before COVID, probably 75% of our promotional dollars on, like, three or four Black Friday events. When you looked at the hit rate on them, a lot of them were sort of late March, early April, and there were just lots of weather issues. You know, we've spent years telling retailers your hit rate on these. If it's cold and wet, people just aren't in the stores no matter what price on the products. Mm-hmm. The first big Black Friday event was, I think, Home Depot last week. Two weeks. Two weeks. Right, right after Easter. I mean, what I was told, I think, was this like maybe their biggest single day with lawn and garden, you know. Go ahead. A week. Yeah. The biggest week they've had in our history with them. You know, this is, there's a lot of variables out there that just make it very hard to say, "Well, what is it?" You know, you could say. I was standing in line at a hardware store. A guy's got a bag of Step One. It was, like, $78.50 out the register, Massachusetts, last weekend. He was super nice. I had a bunch of stuff, and he only had this bag of Step One. He looked at me and said, "You know, do you wanna go first?" I said, "No, you're ahead of me. You go." But I was watching his face, and I didn't wanna say, you know, "Dude, I'm the CEO of Scotts," when it was, like, $80 for, like, a single bag of Step One. He didn't seem bothered. He was pleasant on the way out the door. I was expecting to say, "What the hell has happened to pricing?" You know, I think if you look at we're not seeing a shift down to private label. I mean, not. You know, it's there are a lot of things you could worry about. I think the biggest thing is if you believe us that we're sort of three weeks behind, it's like trying to be in April and call the year. I think Mike, just before we started, said, you know, 'cause we were saying, "They're gonna push hard on, like, call it a year." Mike said, "Dude, it's May 1st. Yes. Well, I've been doing this for 26 years. Finance always wanted to call it a year. I wouldn't call it till June 15th to reforecast. In fact, I wouldn't reforecast because there's so much volatility. This year it's later than ever. Yet I look at what's selling right now, and it's the early season stuff, and we're over-indexing on our higher price items. So that gives me a different sign. I am acting aggressively right now to sort of cut expenses, make orders to get inventory down. That's coming from me. Not that Mike wouldn't have done the same thing ultimately, but you know, I live in this world, in this role between kinda Cory and Mike. Mike was on the road last week. He was doing very important stuff that if it gets done, you guys are all gonna appreciate it. I think Cory just was looking pretty serious. I think Mike's view is, and it has been my view as an operator, is I'm not doing these in the middle of the early half of the season continual reforecasting, especially when things are behind. It's a lot of work to do it and, you know, I think half the time the operators are much more relaxed about the year. You know, we had a board meeting. This is sort of inputs that I was getting from Cory, and what I've done is basically said, "If you think that could happen, then we're acting on it right now." On Friday we have a board meeting, we're briefing the board up on it, and the head of North American sales came up, and he just said, "Oh, bullshit." You know? That's kinda where we're at right now, is I'm just trying to be safe and make the right decisions for the company. I'm not sure there's complete buy-in at the operating level that these are the right numbers, but it's. I'm taking the safe and aggressive action. I have to say, it's hard because, you know, we started dealing with people changes this morning. That comes out of Cory looking at me pretty seriously, sort of the middle of last week. That's how fast we've acted and, you know, aggressively. I hope we've got it right, that we haven't overreacted. I think if you look and say, you know, who are. You know, Larry Lindsey and Larry Summers are the economists that we use, and they're both pretty grim. We hire them for exactly this reason, you know, over a year ago, to sort of help us predict the future a little bit. You know, as you guys know, both of them are sort of think there's gonna be a car wreck with the American economy. Cory gets all serious the middle of last week. Mike's on the road. Season's starting to catch up, but we're behind. You have our economist saying, "Careful," then we're acting. That's what you're hearing. That's part of why we're not willing to call the bottom line number. Just give us. Again, imagine this is April 1st, not May 1st, and you kinda see the issue at that point. Okay? Yeah. That makes sense. Thanks for the color on that. One quick follow-up. You know, if I made the simplification that, you know, the early season product is more in the lawn care area, mid-season to late season, more in gardening, is there a correlation? You know, if you have a late start to the spring and maybe a little bit softer lawn care season, do you typically see that kinda carry through to gardening or are they really, you know, bifurcated and kind of separate, driven separately? Thanks. I would say very much separate. You know? I think that if I had a concern, it would be commitment of the retailers to stay in with a bumpy start of the season. What they're telling us is extremely positive. Now, back to this issue of garden, you know, we're seeing I think it's at least the same weakness in live goods- Yes ... that we're seeing it in our business. Remember, these are not like super expensive things when you buy a plant. I think that for those people, King was telling me that they put some plants out and already had frost damage. You know, he's, his main domicile at this point is the Carolinas. You can't put anything in. We had snow in Vermont, like last week. You know, I think that it's just the season is pushed back, but I think gardening very much is separate. You know, you're not seeing a lot. Like, for those of you who, there are people I'm sure on this call that do live in the suburbs. You know, dandelions are not. I mean, I love dandelions because what it means for our business. You're not seeing, even out here, just dandelions really popping yet. You know, it's not like maybe we're behind. We are behind, the weather is behind, and, you know, gardening is kind of a short-sleeved business. We're seeing, like, pretty wicked pickup in the southeast markets, which I think means people are getting in T-shirts, and that's working. Dude, what I don't wanna do is sort of promise you guys a bunch of hooey, and then you basically say, you know, "Hagedorn is just so full of crap." You know, that's. I just don't wanna get in there. Just give us a couple weeks, y'all. Yes. King is saying, "Hurry up. Addis, let's move on to the next question. All right. We can go ahead and move on to our next question from Peter Grom with UBS. Morning, Peter. Hey, good morning, everyone. Hope you're doing well. You know, I appreciate the lack of visibility, but can you just help frame what POS needs to kind of be exiting May to hit the low end of their U.S. consumer target? You know, second, you know, this is, you know, I know you said it's probably the latest start to spring you've seen, but, you know, it's probably not the first time you've seen a late start. Can you maybe help us, you know, frame what you've seen historically? You know, if weather improves in May, are you able to more than offset some of the weakness you've seen, you know, in April to kind of, you know, be even for the year versus original plan? I guess just what is kind of the key point in May from a weather perspective where, you know, you kind of lose those sales permanently for the season? Thanks. Oh, there's a lot there. You know, listen, what we want is the kind of warm weather. I mean, for what's happening here right now in Ohio is the flowers are in bloom, the leaves are coming out, the lawn's starting to sort of really get green out here. That's what we want, okay? Kinda everywhere. Honestly right now, I would be happy for it to be fairly cool and, you know, not too rainy, especially on the weekends. We have made up these kind of deficits and more. Remember we had super easy comps ahead of us. Right. You know, comps are like 9% our friend right now. Like, -9% is what we're comping against, compared to up till May first, like, +35%, I think is what we had to comp against. We have easy numbers. I think what you probably need is, like, kinda double-digit numbers between now and, you know, the sorta season end. Yeah. At least in the big weeks between now and kind of, call it the middle of June, something like that. That's kind of what we'd see. Again, we're dealing with -9% comps. Yeah. It's not crazy hard to do. We've seen it before. Like I said, we took a global deficit, and, you know, just a little over a week, cut it in a third. That's. You know, people were looking pretty shell-shocked here. Just two good weekends was very helpful. Yeah, I tried to put a number on it. 'Cause we look at the big three. I'd say around +10%. Yet we have a lot of other accounts that are leaning in as well, and I couldn't give you a POS number, but that's where we'll make up those shorts. You know, that's another dynamic, you know, that I think is affecting the season and will affect the season go forward. If you say all promotions have really pushed till after Easter, which is a good thing, not a bad thing, and it was not by accident. It was advice that we have been working with the merchant teams on for a couple years now. You are seeing since COVID, a lot more retailers playing in lawn and garden pretty hard and looking to win. I think there's a lot more internal competition for share within the retail footprints, where they're gonna be promoting on their own for getting the lawn and garden business into their footprint versus somebody else's. There's a pretty competitive place out there right now, which I think is actually helpful for the business. Yeah, there's more people in lawn and garden now than just traditionally. I'm always cautious to use the, our big three traditional numbers or when you're looking at our total season. There's some that are actually approaching to be in the top three, that are not what you think of. Well, thank you so much. I'll pass it on. Thanks, Peter. All right. We'll go ahead and get our next question from Andrew Carter with Stifel. Hey, thanks. Good morning. I wanted to understand just to frame where EPS will go, and I understand you're not giving guidance, but you said pressure in the second half. Does that mean pressure to your original guidance or pressure on a year-over-year basis suggesting the trailing 12 number, I believe $7.40-ish could be the right number for this year? Thanks. That's my first question. Hey, Andrew, it's Cory. I'd say there's some pressure on our most recent guidance that we've put out there. The pressure's coming. As we've talked about, commodity has been a huge cost pressure, late start to the season. We're clawing that back now. Still got a lot of runway ahead of us, but the pressure that we're seeing is against that last round of guidance that we gave, beginning of March. Okay, thanks. Second question, just speaking higher level, and I appreciate all the uncertainty and the quick action you're making. Just backing up on the investment behind RIV Capital, I think it's gonna be just over $200 million commitment. They just bought Attain in New York last month. Just help us better understand that as a use of capital right now. You did mention the separation, no doubt pushed off. It's something you still wanna do. Am I wrong to think that the Attain business would require further capital commitments, therefore subsidization that might be difficult for a standalone Hawthorne to do? Thanks. Okay. I'm just gonna go sort of right to RIV/Attain. You know, one of the things I wanna try to do without freaking out bankers and lawyers is talk about what I believe, you know, RIV's strategy is and why we found it attractive. Let's just go back to saying, remember, they had about $200 million in capital there. We've contributed, I think all, and it'll be around $215 or something like that, I think is the number. I think they have the capital they need to not only make the acquisition or made the acquisition, but also develop the footprint for New York. That's what we're interested in and what we, I think, see eye to eye with Mark Sims, who's the CEO at RIV Capital, who was my head of strategy. We believe that as this industry matures, that the money will be earned with branded consumer products, just like what we're in today. We believe that eventually, I don't wanna use bad language with the Congress of the U.S., but they'll get off their ass. I think we made it pretty clear to them, I did, to sort of the leadership folks on the Senate side that, you know, the Republicans taking the House and maybe the Senate, you know, they will have missed a wicked opportunity to sort of deal with safe banking and 280E, which are major issues for this space. Regardless, our intent is to build with RIV the finest branded consumer pot company the world has ever seen. I mean, I'm not exaggerating that. The part is people look at Attain, they say, "Oh my God, what is that?" And it's a lot of money, which it is. But when we do the math, we can make money at it, okay? Start with that. I mean, Riv can make money at it, and we want to invest in that space. We believe that, you know, when banking happens, and, you know, I'm actually modestly confident banking will happen before, hopefully, you know, Democrats lose a bunch of seats in D.C. But I do think that safe banking will happen, possibly even 280E, you know, dealing with sort of the tax implications of it. So we really like the space. We believe that, you know, once banking happens and the U.S. exchanges are open to pot companies being listed, that that's the time we'd convert. We intend fully to convert once those things happen. Our strategy, which you're not seeing yet, and that's part of the problem, is the people we wanna participate with to build the finest branded pot company at the consumer level that the world has ever seen. We intend to do that, and that's why we're pretty serious about this, and that's why we view our investment in the space as being long-term worth it. It's as you see that develop, and you'll start seeing things happen, I hope soon coming out of RIV. I think you'll start to understand more and more what it is we're trying to build, and you'll see that. We're not all defocused and stuff. This is one of the things that I think we have to do for you guys, my family is not in a different place than I think the investment community in general, which is to say, "All right, so fine, you put $215 million in it. You're not gonna keep chasing that space, right, until you prove it out." My advice to RIV is that we got the state we wanted. We got New York. We have one of the 10 legacy permits. It's vertical all the way from cultivation through processing, distribution, all the way up to retail. We wanted New York, prove we can make it work. We will give you all the tools, and they have the tools to get this done. You'll see more coming. What do I think? If we screw it up, it's because it's either way harder than we think, or we just screwed it up 'cause we're a bunch of lame brains. I don't think those things are gonna happen. I think a year from now, a year and a half from now, you'll see what we've done, and you'll see that this is extendable to other parts of the U.S. We are limited on what we're doing to this Attain New York deal. They are fully capitalized to get that done. You'll see more stuff in the future. You know, I intend for this whole thing to be sort of combined. We need the Congress of the U.S. To do what the American people want, which is to fix the legal issues for this category. Thanks. I'll pass it on. We will go ahead and take our next question from William Reuter with Bank of America. Good morning. First is, you know, there were some comments that were made about, you know, continuing to want to be active in Hawthorne's, you know, business segments. I think they may have referred to M&A. There was also the commentary about, you know, how your economists have a pretty grim view on the outlook in terms of recession. I guess, how does that leave you in terms of your interest in M&A in the near term? I don't think we're interested in a ton of money going out the door. Let's start with that. No, I think we have actually a pretty limited appetite for M&A, would have to be highly strategic. You know, I've already told my team that sort of normal returns in sort of wartime don't do it for me. You know, the Cyco deal, I think I told them, you know, 15% returns just don't do it for me. We inputted a minimum requirement on IRR of 30%, and that deal was completed with that as our planning. Our deals have been, you know, I'm gonna say, all the small deals that we've done have been very successful. I would say we've got a very limited appetite at this point on M&A. I don't think we're looking for cash out the door on pretty much anything at this point. Right now we're just looking to get through where we are. Anything would be highly strategic and probably non-cash. Perfect. Just secondly for me, when you were discussing earlier, Jim, the separation of Hawthorne, you acknowledged that it still continues to make sense in your view. There was a comment from another analyst earlier referring to, you know, the timing of it having been pushed off. I guess, what does that leave you in terms of, I guess, the interest with regard to timing and how we should think about that? Look, what I would say is, stand by for words. That's what I would say, which is, we're working on it. I think everybody's engaged in this and sees the advantages of doing it. I would just say stand by for words. Makes sense. All right. That's all for me. Thank you. Okay. We'll move on to our next question from Eric Bosshard with Cleveland Research. Good morning. Two things. In terms of consumer, I'm just trying to get perspective on the restructuring you're talking about. You built a lot of inventory. A year ago, you talked about adding capacity. Today, you're talking about restructuring to some degree. Trying to understand the context of that and also trying to understand if this is just related to a slow start in commodity costs, or is this related to a different view of demand and the consumer's willingness to continue to pay higher prices. All right. I think it's the former, to be honest. It does seem a bit abrupt, but I think, you know, we're sitting on, like, +$600 million in inventory. North America is behind. Hawthorne is behind. I think that's driving us to say, "Yo, careful, dude." Mike and I started looking at the business, I mean, really just about a week ago and saying, "Look, I want some expenses out the door." I think. Remember, Eric, if you look at sort of what's happened in the last, like, two and a half years, the business is +30, a business that we were saying, like, was 0-2. To some extent, we had to build out our footprint, and I think that our experience through COVID was, it sucks being tied up in inventory. I think the choices we made to expand our manufacturing footprint, redeploy that capital, expand our distribution footprint and add more inventory to it, I think are pretty natural. I think what we're looking at now is saying, "Yo, pull it back." Some of it is not wise. I mean, we're not gonna shrink our manufacturing, but we do have a lot of inventory. If you look at the inventory, a lot of that is way more expensive than it was, call it, a year and a half ago. I'm asking Mike to sort of aggressively attack the inventory and get that down, in part because I think it's in excess of what we need. You know, I think our go-forward view. Listen, to be fair, I don't know that we have really developed a point of view of whether we're going back to a low single-digit growth rate. I think you know, you look at housing, and I don't know what interest rates are gonna do to that, but you know, Jim King's kids are trying to or at least one of them is trying to buy a house in Atlanta and just keeps making bids and not getting it. There's a lot of places in the U.S. Where housing is just you know. There were some really interesting articles last week in the journal about it, and these are young people who want homes. It says one thing about our space, you know, that we've talked about a lot, which is, are people gonna live in condos inside the beltways? Do they want homes? If anything, that market is still hot. Now, is it harder to get a mortgage? Is it more expensive? Housing is still a big positive, and that's young people who want homes and have voted that they want a garden and a dog and kids. We've talked about the demographics there. I feel actually good about it, but I don't think we've really glommed onto with the ride we've been on right now to say, is the future 1% or 2% growth, or is it sort of 3% or 4%? You know, and how do we come off of this +30%? We thought we'd be down last year. I, you know, I don't know that I have as good an answer as you'd probably like to say it's developed, but that's where we are. Just a point of clarity, and then my Hawthorne question. The excess inventory, if you have too much inventory, did you make too much, or do you now expect to sell less than you had originally planned? I'd say both. That's what I would say. Okay. We have longer lead time items out of China, so you're making a bet. Part of our supply chain improvement is we're actually going to more assembly in the U.S., and we'll be able to flex that- You're talking Hawthorne now. Talking Hawthorne. Same for the U.S. Quite frankly, it was availability of materials is part of the reason we built, 'cause we've left sales on the table. We've been adding some capacity, but that capacity become flex capacity to be more nimble. Yeah, Eric, I think it's, you know, we look back on it. We're trying to, like, blame ourselves a little bit for this. The thing is, if you look back a year ago and said, we don't wanna live in the world where we don't have product. You know, year one of COVID, we didn't even get yelled at by retailers, although they were missing a lot of stuff, and I think we put a number of, like, we missed $100 million of Hawthorne sales and like $200 million of retail- Mm-hmm ... in consumer. Last year we were tighter than hell. I think we just said we should run fatter on inventory, and that was a decision that Mike made, and I supported it. You look now that we're behind and you say," I wish I had a little bit less product out there," but I wanna, you know, I wanna tighten the screws down, and we're willing to be pretty hardcore to get there without trying to screw next year up. That's, I know what Mike is. Well, that and we just gotta get it right back in balance. I look at it, inventory as a timeframe, where we're trying to look at it yearly to hit numbers. We can rightsize the supply chain. We get the capacity right. We're getting a better, more reliable supply chain, again, from our raw material suppliers. Remember, we couldn't get materials. We were, you know, some cases four or five weeks behind on just getting raw materials to convert. You know, Eric, another thing that's really interesting from my point of view is how fast the changeover has happened to LEDs on the Hawthorne side. It's not just there. It's in horticultural lighting, too, both in Europe and Canada on the sort of non-cannabis side. Everybody is going LEDs, and this is something, you know, we're the leader in the world in this. Even the people we bought those businesses from said, "Oh, it's gonna be a lot longer. This changeover is gonna..." These are pretty long lead items and expensive. You know, I think we're pretty fat on these long lead items. You know, that's part of that is this change over to LEDs. Part of it is just the length of the supply chain. Yeah. I mean, when the 1700 came out, our first LED light, we made a bet about $30 million to make an investment, and that wasn't enough. We said we'd be more aggressive when we brought out the next generation of innovation and a little heavy. Well, I mean, in our pro-hort business right now, you know, we're seeing really phenomenal results. We were able to deliver them some LED innovation as well. It's a different type of light. The way that those growers use their fixtures is different than the cannabis growers. We gave them some innovation. They've run with it, and now the kind of governor on that business is just how much can we make and get delivered before the end of the year. Yeah. When we get the innovation out there, it tends to hit. Right. You have to make a bet, and we sometimes bet right, and sometimes we bet wrong. Right. the more that you can be flex on your capacity and do it where you can convert, the better your inventory control gets. All right. You were headed to Hawthorne, sir? Okay. On the Hawthorne side, your commitment and conviction is pretty obvious. You've made five acquisitions in the last year. You talk about the RIV deal. Your comment about return expectations of 30% for acquisitions, I understand all of that, but it's a business this year that is, from a profit standpoint, gonna be maybe marginally profitable. The spin is interesting, but from an investor standpoint, what is the margin expectation for this business that investors should be holding onto? I think you talked about leading the share at 8% or 10% margins. I mean, is this business on a path or do you have conviction of getting this to a 10% margin business next year? Or should investors look beyond? Eric, I don't wanna get into next year at this point 'cause there's a lot of planning happening for that. I would say, if you said to my folks, what kind of margins do we want on that business? I'm gonna say in the relatively short term, which means I'm not so much looking at next year at this point, but saying maybe beyond next year. It's not impossible for next year, I just haven't seen the work yet on it. I would say north of 15%, not south of 15%. I wanna be careful on that because with what we're going through now, people have like laser beam eyes, and I wanna make sure that what people are building to is the business. As we go through, you know, change as the result of a significant emotional event. You know, I would say significant emotional event time. I want to make sure that people are building a business that is the partnership we want with the cultivation community, and we don't just decide we're gonna be a distributor. I think, Eric, that the numbers are north of 15, but a lot of that depends on who are we and what's it gonna take to get there. Yeah, I would say 15 +, sir. Perfect. Thank you. We'll go ahead and take our next question from Gaurav Jain with Barclays. Hi, good morning. Thank you. Most of my questions have been answered. I had just a quick question on share repurchases. Given the comments that, you know, the economy could be a car crash and, you know, you're preparing for the worst, should we assume that there won't be any share repurchases now for quite a considerable period of time? I think that's probably reasonable assumption. I would say the only exception to that would possibly be just trying to keep up with dilution from share options. I think generally the answer would be low to zero. The only thing I think that we'd look at is saying, what do we gotta do to keep our share count pretty constant? Through the end of Q2, we've done $175 million this year. Nothing planned for Q3 and Q4, in line with Jim's comments. Jim, just a, you know, follow-up question to that. Like, look, you know Lawrence Summers, as you pointed out, he's probably the most bearish economist out there. You know, you yourself have sort of acknowledged that, you know, the company got too bullish last year. Is there a risk that you might now get too bearish on how things unfold here? Yes. Yes. How do you ensure that? I mean, it's a difficult thing for you to, what I'm trying to understand is that for you also to plan your workforce and what could happen two, three years down the line. How do you judge that and plan and construct a company for something like this? Here's how I justify it. I don't know if this is real, but it's in my head, it's real. I think Mike and I and the rest of the leadership team can look at the corrections we're gonna take the business through right now and say, what helped decision-making, what helped make us a better company going forward? What do we need to do to get that inventory out and sort of clean up our balance sheet and get us more in fighting trim? I think that if the world is less grim, at least in the lawn and garden world. Remember, we've got a lot of experience coming through recessions. They're not terrible for us. You know, I think if you looked at sort of 2010, there were two things, two groups of products that were selling at home centers, paint and lawn and garden. You know, projects that were less than $100. I wouldn't say we're recession-proof, but I do believe we're recession-resistant. Now, if we're overcorrecting, I think that what Mike and I will feel better about is that we've created some opportunities for some younger people to have more stuff to do, that we'll have a more snappy decision-making culture that I think is very important in parts of our business, and that we'll be looking at a really impressive young group of people who've got a lot more responsibility in the company. I don't know, Mike, if you say is this all worth it, especially if the sales aren't as bad as, like, Cory thinks? Well, we were operating unconstrained up till the commodity. We wanted as much growth, and we were doing a lot of investing. I think it's time to recalibrate, reset, and go back. When I first took over as COO, when Jim gave me the job, we flatlined the organization and we built. We had a great run. We're kind of going back to basics, flatline, rebuild. That's. Yeah. I mean, I think, I mean, what do I think? I would view this as a positive, even though it involves of some sadness. Yeah. within the business, is we're looking to take, I would say, at least a layer out of the decision-making tree. I think- It creeps in when you're getting all this growth. I think getting rid of it while it's hard and involves people, I think Yeah. We do see a lot of decision-making advantages coming out of that, and so we can take advantage of things. We're trying to build flexibility here, and the resources to get to chase the things we wanna be chasing and not be on the wrong side of everything is, you know, just a gauntlet. Okay, thanks a lot. All right. We'll go ahead and take our next question from Carla Casella with JPMorgan. Hi. You answered a lot of questions about inventory, but I'm wondering if you could help us to get our arms around how much of the increase in inventory was pricing versus volume and Hawthorne versus consumer. Also, my second question is somewhat related. I mean, your short-term borrowings are up considerably. How much of that is revolver versus accounts receivable facility? Hey, Carla, this is Cory. If you look at inventory, we're up, we'll call it $600 million to make the math easy. It's about half and half, Hawthorne and U.S. Consumer. In each of those businesses, it's about 2/3 up in units, 1/3 up in cost. The commodity cost is driving the cost of our inventory up about a third of the increase in total in each of the businesses. Second part of your question is on, Short-term borrowings. Short-term borrowings. Short-term borrowings are up. Inventory is part of the reason why short-term borrowings are up. The short-term aspect of our debt is mainly the revolver. We're utilizing the revolver. The banks love that we're utilizing the revolver, and that's why we wanted to make sure we had a facility that we just closed on that was sized appropriately for the business. When you look at the short-term, it's mainly revolver usage. Okay. Should that start coming, I mean, are you at the peak, or are we past peak season? We're kind of right about the peak. Peak sell-in's happening now. Inventory is high. As we start collecting on the sales that are happening now, we'll start paying down that revolver balance to get down to where we normally are at the end of the year. Drive inventory down. Okay. Drive inventory down. Yes. Did you get rid of the accounts receivable facility or some of that drawn as well? No, we haven't gotten rid of it. It is being drawn. I don't have the amount right here compared to last year, but it is still being used very consistently with how we've used it in the past. Okay, great. I'll wait for the queue for the exact numbers, but thank you very much. Okay. Thank you. Thanks, Carla. All right. It appears there are no further questions at this time. Mr. King, I would like to turn the conference back to you for any additional or closing remarks. All right. Thank you, Madison. Thank you, everybody, for joining us this morning. Again, as a reminder, on June 9th, Cory and I will be in Chicago at the William Blair event. More likely than not, we will have a public communication in advance of that event, probably the day before. In the meantime, if you've any questions that I can help you with, please call me directly at 937-578-5622. Thanks again for joining us. Have a great day. Go Garden. Bye. This concludes today's call. Thank you all for your participation. You may now disconnect.