Financial Data and Key Metrics Changes - Total company net sales for the quarter were $354.4 million, with U.S. consumer sales at $328.5 million, exceeding expectations due to early season load-in activities [29][30] - GAAP gross margin rate improved to 25%, up 90 basis points year-over-year, while non-GAAP adjusted gross margin rate was 25.4%, compared to 24.5% a year ago [34] - The GAAP net loss from continuing operations was $47.8 million, or $0.83 per share, an improvement from a loss of $66.1 million, or $1.15 per share in the prior year [36] Business Line Data and Key Metrics Changes - The divestiture of the Hawthorne business has been classified as a discontinued operation, contributing to a 40 basis point improvement in gross margin [12][28] - POS for indoor gardening increased by 7.7% in dollars and 9% in units, while Roundup saw a 24% increase in dollars and 27% in units [33] - E-commerce POS dollars for branded products were up 12% and units were up 17%, representing 14% of overall POS in Q1, a 150 basis point increase over the prior year [33] Market Data and Key Metrics Changes - The company is focusing on expanding household penetration, which is currently as low as 10% in some categories, while shifting demographics show a growing interest from Millennials and Gen Z [17][18] - Retailer shipments in January were at a record pace, indicating strong early season demand [30] - The company is enhancing its digital platform to consolidate brands and improve e-commerce capabilities, which is expected to drive further growth [23] Company Strategy and Development Direction - The company is investing nearly $1 billion annually in marketing and innovation to drive sales of high-margin branded products [5][6] - A new multi-year, $500 million share repurchase program has been approved, aiming to reduce share count to around 40 million shares over time [6][10] - The company plans to achieve $1 billion in top-line sales growth and total EBITDA of $1 billion by 2030, with a focus on modest tuck-in M&A to fill gaps in the lawn and garden portfolio [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in outperforming fiscal 2026 guidance due to strong retailer relationships and innovative product offerings [39][43] - The company is focused on long-term growth rather than quarterly results, emphasizing the importance of achieving milestones [54][56] - Management highlighted the positive consumer engagement in the lawn and garden category, which is expected to drive future sales growth [18][25] Other Important Information - The company is planning to hold an Investor Day in the summer to share more details about its long-term financial priorities [37] - The sale of Hawthorne is expected to close this quarter, which will further strengthen the company's balance sheet and eliminate cannabis sector volatility [12][14] Q&A Session Questions and Answers Question: Can you discuss the confidence in outperforming guidance this year? - Management indicated that improvements in gross margin and strong retailer relationships contribute to their confidence in outperforming guidance [40][43] Question: How has early retailer activity influenced your view on inventory loads? - Management noted that early retailer shipments have shown positive momentum, suggesting a return to more traditional inventory patterns [56][59] Question: What is the potential for e-commerce growth and its margin compared to brick-and-mortar? - Management believes e-commerce can be a significant growth area, with margins closely aligned to brick-and-mortar, showing less than a five percentage point delta [78]