CHD 10-K & 10-Q changes, risk factors and insider trading

We face intense competition from consumer products companies, both in the U.S. and in international markets. Most of our products compete with other widely-advertised promoted and merchandised brands within each product category and from retailers, including supermarkets, mass merchandisers, wholesale clubs, drugstores, convenience stores, home stores, dollar and other discount stores, pet and other specialty stores and websites and other e-commerce channels, which are increasingly offering private label and retailer-branded brands and generic non-branded products in certain categories, which typically are sold at lower prices, and consumers are increasingly seeking lower cost “private label” products. In China, in particular we face strong competition from local manufacturers offering both generic and branded products. The use of evolving technology to develop more complex pricing models by retailers has led and may continue to lead to pricing pressures in some categories. In addition, an increase in consumers purchasing more “private label” or other lower price brands has increased competition in certain product categories in particular, including dietary supplements, diagnostic kits and oral analgesics, and there has been increased consumer shifts to private label products across multiple categories. In addition to competition across all our product categories, there continues to be significant product competition in the gummy dietary supplement category, which has grown from about 10 competitors a decade ago to more than 60 competitors of significance in recent years, contributing, together with supply chain challenges that resulted in increased shelf space and/ or display for certain of our competitors, to an impairment in our VMS business in the third quarter of 2024. Shifting consumer behavior, including continuing shifts to online shopping, havehas also increased competition in e-commerce in many of our categories, from our larger legacy competitors and newer digitally native brands which have increasingly moved into consumer products and staples.

Many of our competitors are large companies, including, among others, P&G, The Clorox Company, Colgate-Palmolive Company, S.C. Johnson & Son, Inc., NestleNestlé Purina PetCare Company and Nestle Health Science,S.A., Haleon plc, Henkel, Reckitt Benckiser Group plc, LifeStyles Healthcare, Kenvue Inc., Pfizer Inc., Bayer AG, NBTY, Inc., Koninklijke Philips N.V., Unilever PLC, Sanofi, Pharmavite LLC, Edgewell Personal Care, Panoxyl, StarfaceStarface, GOJO Industries, Inc., and Peach & Lily. Many of these companies have greater financial resources than we do, and these competitors, as well as new market entrants, may therefore, have the capacity to outspend us on advertising and promotional activities and introduce competing products or adopt new technologies, such as artificial intelligence and machine learning, more quickly, successfully and effectively, and respond more effectively to changing business and economic conditions than we can.

Our products generally compete based on the basis of performance, brand recognition, price, value or other benefits to consumers. Significant price competition may require us to reduce the prices for some of our products to price levels that do not offset manufacturing cost increases, to respond to competitive and customer pressures and to maintain market share. Increases to our prices, as a resultbecause of inflationary pressures or otherwise, could cause declining sales of products whose prices we have increased. In response to inflationary pressures and other factors, we have raised prices on many of our products across our global portfolio of brands in recent years. Ongoing periods of high inflation or increased costs resulting from higher tariffs imposed by the U.S. or other countries could lead to additional price increases on these or our other products, adversely impacting demand for our products. Advertising, promotion, merchandising and packaging also have a significant impact on retail customer decisions regarding the brands and product lines they sell and on consumer purchasing decisions. A newly introduced consumer product (whether improved or newly developed) usually encounters intense competition requiring substantial expenditures for advertising, sales promotion and trade merchandising. If a product gains consumer acceptance, it normally requires continued advertising, promotional support and product improvements to maintain its relative market position. If our advertising, marketing and promotional programs, including the use of digital and social media to reach consumers, are not effective, our sales growth may decline.

Despite increasing shifts to e-commerce, sales of our products remain highest in the traditional mass merchandiser, food and drug retail stores, and our products are also sold in club stores and dollar store channels. However, alternative retail channels, including direct to consumer, e-commerce retailers, hard discounters, subscription services and buying clubs, have become more prevalent and the volume of consumer products that are sold through such alternative retail channels is continuing to increase, which may affect customer and consumer preferences, including any pricing pressures for consumer goods as retailers face added costs to build or further expand their e-commerce capacity. In addition, a growing number of alternative sales channels and business models, such as niche brands, native online brands, private label and store brands, direct-to-consumer brands and channels and discounter channels, have emerged in the markets we serve. In particular, the growing presence of, and increasing sales through, e-commerce retailers have affected, and may continue to affect, consumer behavior or preferences (as consumers increasingly shop online and via mobile and social applications) and market dynamics, including any pricing pressures for consumer goods as retailers face added costs to build their e-commerce capacity. In 2024,2025, some of our largest customers launched private label brands that compete with our products and may continue to expand those offerings in the future. Further, consumer preferences continue to evolve due to a number of factors, including fragmentation of the consumer market and changes in consumer demographics, including the aging of the general population and the emergence of Generation Z and Generation Alpha who have different spending, consumption and purchasing habits and are increasingly shifting to “private label” products and new nontraditional brands rather than maintaining allegiance to historical brands; evolving consumer concerns or perceptions regarding ESGsustainability practices of manufacturers, including the environmental impacts of products and the sourcing and sustainability of, packaging materials, such as plastic packaging, and their environmental impact; greenhouse gas emissions; waste disposal practices; a growing demand for natural or organic products and ingredients; changing consumer sentiment toward non-local products or sources among different demographic groups; evolving consumer concerns or perceptions regarding the effects of ingredients or substances present in certain consumer products; reduced brand loyalty; and concerns regarding human capital practices.

We and many of our competitors have increased our online sales as a result of shifting consumer behavior, benefiting from scale, brand recognition, and other factors. However, as consumers continue to shift their behavior, retailers may incur higher e-commerce operating costs and will seek to recover those costs by passing them onto customers and manufacturers. Additionally, we cannot predict the extent to which our increased e-commerce demand will continue or the impact on our profits as retailers seek to recover higher e-commerce related operating costs. Any significant changes in consumer preferences or behavior could materially and negatively impact demand for our products and, in turn, our net sales and results of operations. Consumer preferences are also influenced by the perception of our brand images or those of our products, the success of advertising and marketing campaigns, our ability to engage with consumers in the manner they prefer, including through the use of digital media or assets, and the perception of our advertising content, use of social media and extent of engagement in political and social issues. If we are not successful in continuing to adapt to changing consumer preferences and market dynamics or expanding sales through e-commerce retailers or alternative retail channels, consumers may reduce their purchasing of the Company’s products which would negatively impact our business, financial condition and results of operations and cash flows may be negatively impacted.flows.

The principal raw materials and packaging used by us and certain of our suppliers and contract manufacturers include surfactants (cleaning agents), paper products and resin-based molded components. Volatility, and increases in the costs of raw materials without offsetting price increases, disruptions in production or transportation, or increases in the costs of energy, labor, shipping and other necessary services, or other inflationary pressures, including market conditions, inflation, banking failures, supplier capacity restraints, geopolitical developments (including the ongoing conflicts in Ukraine and the Middle East and political upheaval in the Middle East and Europe), the impact of the new presidential administration in the U.S., potential tariffs on imported materials or the impact of tariffs on products or materials exported outside of the U.S., new regulations or economic policies, federal government spending disputes and government shutdowns, port congestions, strikes or delays, transport capacity restraints, or other disruptions, could significantly affect our profit margins if we are unable to pass along any higher costs in the form of price increases or otherwise achieve cost efficiencies, such as in manufacturing and distribution. GeneralWhile slowing year-over-year, inflationary pressures continued in 2024,2025, and we maycontinue stillto be affected by increased costs impacting our supplies, transportation or manufacturing processes which could impact our gross margin. While we have increased prices on a majority of our products in recent years, there is no assurance that we will be able to fully offset any input costs increases, through cost reduction programs or price increases of our products or enter locked-in price arrangements or hedge agreements, especially given the competitive environment. Sustained, those price increases may lead to declines in volume as competitors may reduce their prices or customers may decide not to pay higher prices or to purchase lower priced alternatives, which could lead to sales declines and loss of market share. While we seek to project tradeoffs between price increases and volume, our projections may not accurately predict the volume impact of price increases. In addition, volatility in certain commodity markets could significantly affect our production cost. Additionally, increased tariffs, or proposed increases to tariffs, imposed by the U.S. or other countries could have the impact of increasing costs on a wide range of products and services, including on our products and items used to manufacture and deliver our products, and could lead to increased prices, price volatility and reduced demand for our products.

A limited number of customers account for a large percentage of our net sales and/or net sales of specific product lines. Walmart is our largest customer, accounting for approximately 23% of net sales in 2024, 23%each of net2025, sales in 2023,2024, and 24% of net sales in 2022.2023. Our top four customers accounted for approximately 44%, 43%, 44% and 42%44% of net sales in 2025, 2024, 2023 and 20222023, respectively. We expect that a significant portion of our net sales will continue to be derived from a small number of customers and that these percentages may increase if the growth of mass merchandisers continues. As a result, changes in the strategies of any of our largest customers, including a reduction in the number of brands they carry or of shelf space they dedicate to private label products, could materially harm our net sales and profitability. Any loss of or significant reduction in sales to one of our key customers could have a material adverse effect on our business, financial condition and results of operations. Changes in consumer behavior, including continued shifting to online shopping instead of physical retail shopping, could also impact our sales to our largest customers. Some of our retail customers have experienced and may experience in the future declining financial performance, which could affect their ability to pay amounts due to us on a timely basis or at all. If these impacts are prolonged, they can further increase the difficulty of planning for operations. Moreover, the use of evolving technology by our customers to develop more complex pricing models may lead to category pricing pressures. We could also lose a significant customer due to customer service levels or real or perceived product quality or appearance issues. As our business is based primarily upon individual sales orders rather than long-term contracts and most customer agreements include customer termination rights after short notice, many of our customers could reduce their purchasing levels or cease buying products from us at any time and for any reason.

A significant percentage of our revenues come from mature markets that are subject to high levels of competition where product differentiation is more challenging and price competitors can erode profit margins. During 2024,2025, approximately 82% of our sales were generated in U.S. markets. U.S. markets for consumer products are considered mature and commonly characterized by high household penetration, particularly with respect to our most significant product categories, such as laundry detergents, deodorizers, household cleaning products, toothpastes, dietary supplements, antiperspirants and deodorants. Our ability to quickly innovate to differentiate our products (including product packaging and sustainability profiles) to meet changing consumer demands is essential, especially in light of e-commerce significantly reducing the barriers for even small competitors to quickly introduce new brands and products directly to consumers. Even if we are successful in increasing sales within our product categories, a continuing or accelerating decline in the overall markets for our products could have a negative impact on our financial results. We have implemented price increases and may implement additional price increases in the future, including to account for increasingincreased costs, which may slow sales growth or create volume declines in the short term as customers and consumers adjust to these price increases. In addition, our Specialty Products business has been and may continue to be negatively impacted by the entrance of new foreign competition in the United States dairy market. We expect that low-priced imports will continue to enter the market. During the first quarter of 2024, due to declining sales, we exited the MEGALAC supplement portion of our Animal Nutrition business within our Specialty Products Division segment and during the second quarter of 2024, we sold our food safety business, Passport Food Safety Solutions, Inc. During the fourth quarter of 2024, our 50% interest in The ArmaKleen Company was sold to our joint venture partner.

Factors that can affect demand include competitors’ products, advertising and pricing actions, inflationary pressures, rates of unemployment, consumer confidence, health care costs, including increased costs as a result of changes in federal regulations, significant shifts in government policies, the deterioration of economic or trade relations between countries or regions, commodity costs, fuel and other energy costs and other economic factors affecting consumer spending behavior, including gasoline and home heating oil pricing, reduced unemployment benefits in periods of high unemployment, restrictions on travel and access to public spaces, and changes in tax policies, other effects of governmental shutdowns or a lapse of appropriations or fear of exposure to or actual impacts of a widespread disease outbreak. In particular, we derive a substantial percentage of our revenues from sales of laundry detergent, and the continued customer demand for these products areis critical to our future success. SomeThere has been a decrease in demand for some of our products have seen decreasing demand in recent years, including condoms, as a result of demographic and other changes. We believe that inflation is continuing to drivedrove a decline in consumer spending for our most discretionary brands, Waterpik and Flawless,brand, as consumers reduce spending in these categories and shift to lower cost alternatives. Most notably, a growing number of water flosser consumers are continuing to switchswitched to competitors' value-branded products. Moreover, in our vitamin business, we are experiencing significant product competition coming from new category entrants, including private label, which contributed to the previously announced impairment in our VMS business. In addition, our Specialty Products business has been negatively impacted by the return of foreign competition in the United States dairy market.

An increasing number of our products are more discretionary in nature and, thereforetherefore, are more likely to be affected by consumer decisions to control spending.

We rely on the policies of our key retailerretail customers.

Larger and increasingly consolidated retailers have an increasing influence, and have sought to obtain lower pricing, special packaging inventory practices, logistics or other changes to the customer-supplier relationship as a result of this influence. To the extent we provide concessions or better trade terms to those customers, our profit margins are reduced. Further, if we are unable to effectively respond to the demands of our customers, these customers could reduce their purchases of our products and increase their purchases of products from competitors. Reductions in inventory by our customers, including as a result of consolidation in the retail industry, or these customers managing their working capital requirements, could result in reduced orders for our products and adversely affect our results of operations and cash flows for financial periods affected by such reductions.

In addition, private label and retail-branded products sold by retail trade chains are typically sold at lower prices than branded products. As consumers look for opportunities to decrease discretionary spending, our customers have discontinued or reduced distribution of some of our products to encourage those consumers to purchase the customers’ less expensive and, in some cases, more profitable private label and retail-branded products (primarily in the dietary supplements, stain fighters, diagnostic kits and oral analgesics categories).

Acquired companies or operations or newly-created ventures may not be profitable or may not achieve sales levels and profitability that justify the investments made. In addition, future acquisitions or investments could result in substantial cash expenditures, the potentially dilutive issuances of new equity by us or the incurrence of additional debt or business acquisition liabilities, or the assumption of contingent liabilities, such as those relating to advertising claims, environmental issues and litigation. To the extent that the economic benefits associated with an acquisition or investment diminish in the future we may be required to record impairments of intangible assets. In addition, if the performance of an acquired company or business is less robust than expected, the Company has in the past recorded, and may, in the future, be required to record, impairments of intangible assets. Any impairment charges could adversely affect the Company's financial condition, margins and results of operations.

The Company has divested and may, in the future, divest certain assets, businesses or brands. AIn divestiture2025, we exited from the Flawless, Spinbrush, Waterpik showerhead businesses and divested of our VMS business. We completed the sale of our VMS business at the end of 2025. These and other future potential divestitures could affect the profitability of the Company as a result of the gains or losses on such sale of a business or brand, the loss of the operating income or sales resulting from such sale or the costs or liabilities that are not assumed by the acquirer that may negatively impact profitability and cash flow subsequent to any divestiture. When we undertake to divest assets or a business, we may encounter difficulty finding buyers or executing alternative exit strategies, which could impact the achievement of our strategic objectives. We could also fail to obtain necessary regulatory approval or incur unexpected or higher costs or charges than planned and could experience unanticipated impacts to our business, any of which could have a negative impact on our results of operations. If the Company is unable to complete a divestiture or successfully transition a divested business, including the effective management of the related separation and overhead costs, transition services, and the maintenance of relationships with customers, suppliers, and other business partners, its business and financial results could be negatively impacted. The Company may also be required to recognize impairment charges or other losses as a result of a divestiture.

Any event that disrupts or otherwise negatively impacts manufacturing facilities, manufacturing systems or equipment, or contract manufacturers or other suppliers could result in the delivery of inferior products or affect our ability to meet customer requirements or service levels.

We distribute our products and receive raw materials and packaging components primarily by truck, rail and ship and through various ports of entry. Reduced availability of trucking, rail or shipping capacity due to labor shortages, adverse weather conditions, natural disasters, including climatic eventsand (includingweather-related any potential effect of climate change),events, allocation of assets to other industries or geographies or otherwise, work stoppages, closure of operations due to government restrictions or sick employees or other impacts of pandemics, strikes or shutdowns of ports of entry or such transportation sources, could lead to inflationary cost pressures, cause us to incur unanticipated expenses and impair our ability to distribute our products or receive our raw materials or packaging components in a timely manner, which could disrupt our operations, strain our customer relationships and competitive position.

Our financial success is directly dependent on the reputation and success of our brands, particularly our power brands. Seven of our brands are designated as "power brands" because they compete in large categories, and we believe they have the potential for significant global expansion. Those seven brands are ARM & HAMMER®; OXICLEAN®; VITAFUSION® and L’IL CRITTERSTOUCHLAND®; BATISTE®; WATERPIK®; THERABREATH®; and HERO® and represent approximately 70% of our net sales and profits. The effectiveness of these brands could suffer if our marketing plans or product initiatives do not have the desired impact on a brand’s image or its ability to attract consumers. Our brands could suffer damage to their reputations due to real or perceived, sustainability, quality or safety issues, including as a result of, among other things, significant product recalls, product-related litigation, defects or impurities in our products, product misuse, changing consumer perceptions of certain ingredients or environmental impacts (including packaging, energy and water use and waste management), or allegations of product tampering. In addition, as our sales on various e-commerce platforms grow, we may be unable to prevent sales of counterfeit, pirated, or stolen goods, unlawful or unethical sales, unauthorized resellers online, or sales in violation of our policies. DuringAs thea third quarterresult of 2024, the Company continued to experience a decline in market share and a deterioration in the financial performance forof itsour Vitamins, Minerals and Supplements (“VMS”) business, which includes the VITAFUSION and L’IL CRITTERS trade names, primarily due to significant product competition coming from new category entrants, including private label, and supply chain challenges that resulted in increased shelf space and/ or display for certain of our competitors. The continued decline in profitability caused management to reassess its long-term strategy and financial outlook of the business.Company Therecorded revisedimpairment financial outlook reflects lower estimates of future sales growth and cash flows which resulted in a triggering eventcharges in the third quarter.quarter Theof triggering2024, eventand requiredcompleted the Company to review the carrying value of long-lived assets supporting the business in connection with the preparationdivestiture of the Company’sVMS financialbusiness statements,on resultingDecember in31, impairment2025. chargesOn May 1, 2025, we announced that we would exit the Flawless, Spinbrush and Waterpik showerhead businesses, which we exited by the end of $357.1 in the quarter ended September 30, 2024.2025.

Widespread use of social media and networking sites by consumers has greatly increased the accessibility and speed of dissemination of negative information and misinformation. Negative online consumer reviews or inaccurate posting or comments about us or our brands in the media or on any social networking website, whether accurate or inaccurate, or the disclosure of non-public sensitive information through social media, could generate adverse publicity that could damage the reputation of our brands. In addition, given the association of our individual products with us, an issue with one of our products could negatively affect the reputation of our other products, or us as a whole. In addition, the legal, regulatory and ethical landscape around the use of artificial intelligence and machine learning is rapidly evolving. The Company’s ability to timely adopt to and adapt to this emerging technology in an effective and ethical manner may impact its reputation and ability to compete, and this technology could be, among other things, false, biased, or inconsistent with the Company’s values and strategies. Further, the use of generative artificial intelligence tools may compromise confidential or sensitive information, put the Company’s intellectual property at risk, or subject the Company to claims of intellectual property infringement, all of which could damage the Company's reputation.

Major developments in trade relations, including the imposition of new or increased tariffs or sanctions by the U.S. and/or other countries or other changes put in place by the new U.S. presidential administration, and any emerging nationalist trends in specific countries could alter the trade environment and consumer purchasing. All the foregoing risks could have a significant impact on our ability to commercialize our products on a competitive basis in international markets.

In addition, in all foreign jurisdictions in which we operate, we are subject to laws and regulations that govern foreign investment, foreign trade and currency exchange transactions. The recent imposition of tariffs on products imported from certain countries in recent years has introduced greater uncertainty with respect to trade policies and government regulations affecting trade between the U.S. and other countries. The sanctions introduced in response to the Ukraine conflict have further exacerbated these issues. Major developments in trade relations, including the imposition of new or increased tariffs by the U.S. and/or other countries, and any emerging nationalist trends in specific countries could alter the trade environment and consumer purchasing behavior which, in turn, could have a material effect on our balance sheet and results of operations. All the foregoing risks could have a significant impact on our ability to commercialize our products on a competitive basis in international markets and may have a material adverse effect on our results of operations, cash flows or financial position.

We have a material amount of goodwill, trademarks and other intangible assets, as well as other long-lived tangible assets, which are periodically evaluated for impairment in accordance with current accounting standards. Declines in our profitability and/or estimated cash flows related to specific intangible assets, as well as potential changes in market valuations for similar assets and market discount rates, hashave resulted in impairment charges from time to time, and may result in future impairment charges. In the third quarter of 2024, dueRefer to continued decline in market share and a deterioration in the financial performance for Vitamins, Minerals and Supplements business, which includes the VITAFUSION and L’IL CRITTERS trade name, we reassessed our long-term strategy and financial outlook of the business. The revised financial outlook reflects lower estimates of future sales growth and cash flows resulting in a triggering event which required the Company to review the carrying value of long-lived assets supporting the business and resulted in impairment charges as discussed in more detail in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report on Form 10-K.10-K for a more detailed discussion.

From time to time, we are the subject of, or party to, various pending or threatened legal actions (including class actions), government investigations and proceedings, including, without limitation, those with allegations relating to,to commercial transactions, product liability, ingredients, consumer, employment, antitrust, environmental, health, safety and compliance-related matters. Such proceedings are subject to many uncertainties and the outcome of certain pending or threatened legal actions, investigations and proceedings may not be reasonably predictable and any related damages, injunctions and/or settlements may not be estimable.

We must comply with various environmental laws and regulations in the jurisdictions in which we operate, including those relating to the handling and disposal of solid and hazardous wastes and the remediation of contamination associated with the use and disposal of hazardous substances. A release of such substances due to an accident or an intentional act could result in substantial liability to governmental authorities or to third parties. We have incurred, and will continue to incur, capital and operating expenditures and other costs in complying with environmental laws and regulations.

Changing focus and sensitivity by governmental, non-governmental organizations, customers, consumers and investors to ESGsustainability issues, including those related to diversity and inclusion, climate change,resilience, plastic usage and ingredients, could result in increased operating or manufacturing costs and compliance challenges, which could adversely affect our business.

As climate changeresilience and other ESGsustainability issues became more prominent in recent years, so has scrutiny by federal, state and local governments, non-governmental organizations and our customers, consumers and investors. This has resulted in new regulatory requirements such as various state-level Extended Producer Responsibility programs, California’s recently enacted climate reporting legislation, the European Union’s (“EU”) Corporate Sustainability Reporting Directive (“CSRD”) and customer and consumer standards.standards, as well as regulatory actions and executive orders issued by the current U.S. presidential administration that have targeted these areas. In addition, our stakeholders may continue to demand transparency regarding our diversity and inclusion efforts and they may receive scrutiny from U.S. regulators, investors and policy groups in connection with the new presidential administration’s priorities.priorities, and certain stakeholders have expressed negative sentiment regarding certain corporate sustainability initiatives. Our efforts to mitigatemanage ourenvironmental impacts onincluding climate change, and to eliminateaddressing chemicals of concern and otherwise reducereducing or mitigatemitigating adverse effects on the environment, may alsonot continuealign with the expectations of all stakeholders and could expose us to beincreased scrutinized.regulatory or legal scrutiny. For example, some of our major customers have requested that we respond to various questionnaires, including the Carbon Disclosure Project ("CDP") Climateintegrated Change,corporate Waterquestionnaires, and Forests Questionnaires, andthen use our responses and CDP scores regarding climate change, water and forests to evaluate us. Compliance with these requirements, standards and disclosure requests may be challenging and could cause disruptions in the manufacture of our products and/or result in increases in operating costs, and additional legal, compliance and regulatory risks and costs. We may also be required to contribute funds to support recycling and other waste management infrastructure, and/or incur costs associated with making necessary changes to our operations and controlling, assessing and reporting on certain ESGsustainability metrics. These disruptions and additional costs could make our products more costly and less competitive than other products, which would adversely affect our business.

Any failure to achieve our ESGsustainability goals or to effectively respond to new or current legal, regulatory or stakeholder ESGsustainability requirements could adversely affect our business and reputation.

While we strive to minimize adverse impacts of our global operations, our ability to achieve any stated ESGsustainability goal, target, or objective is subject to numerous factors and conditions, many of which are outside of our control. We could lose revenue if our consumers change brands, major retailers delist our products or our retail customers move business from us because we have not effectively responded to regulatory requirements, complied with their ESGsustainability requirements or met their expectations related to our sustainability efforts, including with respect to DEI, climate change,resilience, plastic usage, or ingredients. In addition, our actual or perceived failure to achieve or make sufficient progress towards our stated ESGsustainability goals or comply with ESGsustainability related regulations could result in litigation, regulatory scrutiny or adverse publicity, which could damage our reputation, reduce consumer demand and devalue our brand equity. Further, ESG-conscioussustainability-conscious investors may choose not to invest in our securities if we do not comply with their expectations, and investment managers may not include our securities in ESG-designatedsustainability-designated funds. These areas have become increasingly politicized, and our efforts to address the concerns of some stakeholders could cause adverse impact to our relationships with other stakeholders.

We are subject to increasingly stringent privacy and data security regulation.

We collect, use and store personal data of our employees, customers and other third parties in the ordinary course of business, and we are required to comply with increasingly complex and changing data privacy and security laws and regulations, as well as self-regulatory regimes, that apply to the collection, storage, use, transmission and protection of personal information and other consumer and employee data, including particularly the transfer of personal data between or among countries. High-profile security breaches of the information systems of a number of government agencies and U.S. companies may result in increased regulations and new security laws. The current administration and Congress in the United StatesStates, as well as state legislators, may seek to pass more stringent regulations in these areas, or more aggressively enforce existing regulations.

Failure to comply with applicable privacy, cybersecurity, or data protection requirements, or failure to prevent or promptly detect and remediate a security incident, could materially and adversely affect our business, financial condition, and results of operations. We may also face auditsaudits, inquiries or investigations by one or more domestic or foreign government agencies relating to our compliance with these regulations. An adverse outcome under any such investigation or auditprocess could subject us to fines, penalties or orders to cease, delay or modify collection, use or transfers of personal data. We could also face rights requests, complaints, claims, or litigation from those persons whose data we collect, use and store as well as governmentrelated investigationsenforcement actions and fines.penalties. Any of these events or other circumstances related to our collection, use and transfer of personal data could also lead to negative media attention, damage to our reputation in the market or otherwise adversely affect our business.

On October 4, 2021, members of the Organization for Economic Co-operation and Development (“OECD”) agreed to a global minimum tax rate of 15%. On December 20, 2021, OECD published its model rules on the agreed minimum tax known as the Global Anti-Base Erosion (“GloBE”) rules. The GloBE Rules consist of an interlocking and coordinated system of rules which are designed to be implemented into the domestic law of each jurisdiction and operate together to ensure large multinational enterprise groups are subject to a minimum effective tax rate of 15% on any excess profits arising in each jurisdiction where they operate. On December 15, 2022, the European Council approved its directive to implement Pillar Two of the GloBE rules regarding a 15% global minimum tax rate. Many aspects of Pillar Two will bewere effective for tax years beginning in January 2024, with certain remaining impacts to bebecoming effective in 2025. AsOn January 5, 2026 the OECD published Tax Challenges Arising from Digitalisation of the Economy- Global Anti-Base Erosion Model Rules (Pillar Two), legislationSide-by-Side evolvesPackage. The Package includes certain safe-harbors applicable to certain U.S. parented multi-national corporations, and countriesis enact new legislation, we will continuerequired to evaluatebe Pillaradopted Twoby andOECD member States to be effective. However, if these safe harbors are modified or not adopted, Pillar Two may increase our future effective tax rate. We will continue to monitor Pillar Two legislation as it evolves and and assess its potential impact on our global tax position.

Other financial uncertainties in our major markets and unstable geopolitical conditions in certain markets, including civil unrest and governmental changes, could undermine global consumer confidence and reduce consumers’ purchasing power, thereby reducing demand for our products. Restrictions on our ability to transfer earnings or capital across borders, price controls, limitations on profits, retaliatory tariffs, targeted boycotts of U.S. products and services, import authorization requirements and other restrictions on business activities which have been or may be imposed or expanded as a result of political and economic instability, deterioration of economic relations between countries or otherwise, could impact our profitability. In addition, U.S. trade sanctions against countries designated by the U.S. government as state sponsors of terrorism and/or financial institutions accepting transactions for commerce within such countries could increase significantly,increase, which could make it difficult or impossible for us to continue to make sales to customers in such countries. The imposition of retaliatory sanctions against U.S. multinational corporations by countries that are or may become subject to U.S. trade sanctions, or the delisting of our branded products by retailers in various countries in reaction to U.S. trade sanctions or other governmental action or policy, could also negatively affect our business. OnIn February 1, 2025, President Trump announced new tariffs on imports from certain countries, including Canada, Mexico and China. TheseThe scope, duration and magnitude of these additional tariffs, as well as a government’s adoption of “buy national” policies or retaliation by another government against such tariffs or policies, as well as the potential impact of changed purchasing decisions of consumers and retailers in these or other countries in response to these policies, have introduced significant uncertainty into the market and may affect the prices of and demand for our products,products. whichWhile the current impact of such actions may vary by market and may not be material in all cases, future changes in trade policies, particularly if escalated or sustained could have a material and adverse effect on our business, financial condition and results of operations. Ongoing political uncertainty in many countries, has resulted in, and we have experienced, and expect towill continue to experience, the indirect impacts of the conflict in Ukraine and increased hostilities and political volatility in the Middle East, including increases in the cost of raw and packaging materials and commodities (including the price of oil), supply chain and logistics challenges and foreign currency volatility,volatility. and itIt is not possible to predict the broader or longer-term consequences ofthese this conflictconflicts or the sanctions imposed to date. Increasing natural disasters in connection with climate changeand weather-related events could also be a direct threat to our third-party vendors, service providers or other stakeholders, including disruptions of supply chains or information technology or other necessary services for our Company.

Increased information technology security threats and more sophisticated computer crime, including viruses and malware, ransomware attacks, misuse of artificial intelligence and machine learning technologies, denial of service and phishing attacks and advanced persistent threats, pose a potential risk to the security of our information technology systems, networks, and services, and those of our customers and other business partners, as well as the confidentiality, availability, and integrity of our data, and the data of our customers and other business partners. The rapid evolution and increased adoption of artificial intelligence technologies may intensify our cybersecurity risks. As a result, our information technology systems, networks or service providers could be damaged or cease to function properly or we could suffer a loss or disclosure of business, personal or stakeholder information, due to any number of causes, including catastrophic events, power outages and security breaches. Although we have business continuity plans in place and have implemented an incident response plan to address cybersecurity incidents, if these plans do not provide effective alternative processes on a timely basis, we may suffer interruptions in our ability to manage or conduct our operations which may adversely affect our business. In addition, if our service providers, suppliers or customers experience a breach or unauthorized disclosure or system failure, their businesses could be disrupted or otherwise negatively affected, which may result in a disruption in our supply chain or reduced customer orders or other business operations. Moreover, any costs related to a breach may exceed the amount of insurance coverage or be excluded under the terms of our cybersecurity policy. As cyberattacks increase in frequency and magnitude, we may be unable to obtain cybersecurity insurance in amounts and on terms we view as appropriate for our operations.

Our information technology systems and,and our third-party providers’ systems, have been, and will likely continue to be, subject to advanced computer viruses or other malicious codes, ransomware, unauthorized access attempts, denial of service attacks, phishing, social engineering, hacking and other cyberattacks. These risks also may be present to the extent that any of our partners, distributors, joint venture partners or suppliers using separate information systems, not integrated with our information systems, suffers a cybersecurity incident and could result in increased costs related to their inability to timely deliver on their commitments to us and/or our involvement in investigations or notifications conducted by these third parties. These risks may also be present to the extent a business we have acquired that does not use our information systems, experiences a system shutdown, service disruption, or cybersecurity incident. Due to the conflictconflicts in Ukraine and the Israel-HamasMiddle war,East, as well as other evolving geo-political tensions, there is a possibility that the escalation of tensions could result in cyberattacks that could either directly or indirectly affect our operations. Such attacks may originate from nation states or attempts by outside parties, hackers, criminal organizations or other threat actors. In addition, insider actors-maliciousactors–malicious or otherwise-couldotherwise– could cause technical disruptions and/or confidential data leakage. To date, we have seen no material impact on our business or operations from these attacks; however, we cannot guarantee that our security efforts will prevent attacks and resulting breaches or breakdowns of our, or our third-party service providers’ databases or systems.

In recent periods, several of our peer or similarly situated companies have experienced cybersecurity incidents. In addition, although we have policies and procedures in place governing cybersecurity risk, the secure storage of personal information collected by us or our third-party service providers, data breaches due to human error (including through the improper use of AI) or intentional or unintentional conduct may occur in the future, especially as we have shifted to more employees and other workers working remotely and having access to our technology infrastructure remotely.

WeWhile we continuously perform enterprise-wide upgrades to our systems and will continue to monitor and upgrade systems as appropriate, legacy systems may be vulnerable to increased risk. Additionally, if a new system does not function properly, it could affect our ability to order supplies, process and deliver customer orders and process and receive payments for our products. This could adversely impact our results of operations and cash flows. Upgraded or new technology may not function as designed and any such upgrades may not go as planned. Moreover, because the techniques, tools and tactics used in cyberattacks frequently change and may be difficult to detect for periods of time, we may face difficulties in anticipating and implementing adequate preventative measures or fully mitigating harms after such an attack. As such, we may need to expend additional resources and incur additional costs in the future to continue to protect against or address problems caused by any business interruptions or data security breaches. Cyber threats are becoming more sophisticated, are constantly evolving and are being made by groups and individuals with a wide range of expertise and motives, and this increases the difficulty of detecting and successfully defending against them. WeCyberattacks have incurred,also become more difficult to detect and will continuerespond to incur,since expensesthey toincreasingly complyexploit with privacyAI and datamachine protectionlearning standardstechniques, such as generative AI-phishing, deepfake impersonations, automated vulnerability discovery, adaptive malware, and protocolslarge-scale imposedcredential-stuffing by law, regulation, industry standards and contractual obligations. Increased regulation of data collection, use, and retention practices, including self-regulation and industry standards, changes in existing laws and regulations, including reporting requirements, enactment of new laws and regulations, increased enforcement activity, and changes in interpretation of laws, could increase our cost of compliance and operation, limit our ability to grow our business or otherwise harm our business.campaigns.

The labor market in the United States is very competitive. Our future performance depends in significant part upon the continued service of our executive officers and other key personnel, including at our plants. Competition for qualified plant personnel remainremains intense. In 2024, we announced changes to our executive leadership team, including that our Chief Financial Officer will assume the role of our new Chief Executive Officer and that we will be appointing a new Chief Financial Officer and President of the U.S. business. The inability to identify and hire qualified candidates for those roles or the unexpected loss of the services of one or more executive officers, the failure to effectively manage executive succession planning, or the loss of other key employees could have a material adverse effect on our business, prospects, financial condition and results of operations. This effect could be exacerbated if any officers or other key employees left as a group or at the same time. Our success also depends, in part, on our continuing ability to attract, retain and develop a diverse and highly qualified workforce. Competition for such talent remains, and there can be no assurance that we can retain our key employees or attract, assimilate and retain other highly qualified personnel in the future, and the U.S. labor market has experienced wage inflation, sustained labor shortages, and a shift towards remote work. Factors that may affect our ability to attract and retain sufficient numbers of key employees include employee morale, our reputation, competition from other employers and the availability of qualified personnel in a tightening labor market. WeOur experiencedretention anrates increaseremain inrobust. laborCurrently, global voluntary turnover infor 20222025 (21.5%)was butat saw this ease in 2023 (17.6%) and in 2024 (15%). We may continue to experience increased personnel turnover in the future6.9%, compared to 2024,7.7% eitherin 2024. Overall turnover for 2025 is 24.9%, up from 14.3% in 2024. This includes one-time involuntary actions within Waterpik and supply chain, the closure of the New Zealand site as awell resultas the divestiture of our businessVMS operationsbusiness. orDue otherto broad-basedthese economiclarge orreductions culturalin factors.our workforce, we finished 2025 above the industry average of 18.7%. The overall turnover rate, excluding VMS, would have been 16.8% and below industry average. Global plant voluntary turnover for 2025 was at 6.9%, down from 7.9% in 2024. The total plant turnover was 33%, which is higher than the industry standard for plants at 29.5%. International turnover for 2025 was down to 14.9%, compared to 15.5% in 2024.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting for external purposes in accordance with generally accepted accounting principles in the U.S. Because of its inherent limitations, internal control over financial reporting cannot provide absolute assurance that a misstatement of our financial statements would be prevented or detected. Our continuing growth and expansion in domestic and globally dispersed markets, such as our acquisition of the ZICAM, THERABREATH, HEROHERO, TOUCHLAND and other businesses, may place significant additional pressure on our system of internal control over financial reporting and require us to update our internal control over financial reporting to integrate such acquisitions. Moreover, we engage the services of third parties to assist with business operations and financial reporting processes, which injects additional monitoring obligations and risk into the system of internal control, including as a result of cyberattacks. When we are required to comply with new or revised accounting standards, we must make any appropriate changes to our internal control over financial reporting to fully implement the standards, which may require significant effort and judgment. Any failure to maintain an effective system of internal control over financial reporting could limit our ability to report our results of operations accurately and on a timely basis, or to detect and prevent fraud and could expose us to regulatory enforcement action and stockholder claims.

In recent years, proxy contests, unsolicited takeovers and other forms of stockholder activism have been directed against numerous companies in our industry, including us. If such a campaign or proposal were to be made against us, we would likely incur significant costs. Stockholder activists may also seek to involve themselves in the governance, strategic direction and operations of our business, or in our ESG and sustainability management and disclosure, through stockholder proposals or otherwise disrupting our business and diverting the attention of our management and employees, and any perceived uncertainties as to our future direction resulting from such a situation could result in the loss of potential business opportunities, the perception that we need a change in the direction of our business, or the perception that we are unstable or lack continuity, which may be exploited by our competitors, cause concern to our current or potential customers, and may make it more difficult for us to attract and retain qualified personnel and business partners. Actions of activist stockholders may cause significant fluctuations in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business. We may also be the target of short sellers who engage in negative publicity campaigns that may use selective information that may be presented out of context or that may misrepresent facts and circumstances.

We develop, manufacture and market a broad range of consumer household, personal care and specialty products. Our well-recognized brands include ARM & HAMMER® baking soda, cat litter, laundry detergent, carpet deodorizer and other baking soda-based products; OXICLEAN® stain removers, cleaning solutions, laundry detergents and bleach alternatives; VITAFUSIONTOUCHLAND® andhand L’IL CRITTERS® gummy dietary supplements for adults and children, respectivelysanitizers; BATISTE® dry shampoo; WATERPIK® water flossers and showerheads; THERABREATH® oral care products; HERO® acne treatment products; TROJAN condoms, lubricants and vibrators; SPINBRUSH battery-operated toothbrushes; FIRST RESPONSE home pregnancy and ovulation test kits; NAIR depilatories; ORAJEL oral analgesic; XTRA laundry detergent; and ZICAM cold shortening and relief products. Seven of those brands are designated as "power brands" because they compete in large categories, and we believe they have the potential for significant global expansion. Those seven brands are ARM & HAMMER®; OXICLEAN®; VITAFUSION® and L’IL CRITTERSTOUCHLAND®; BATISTE®; WATERPIK®; THERABREATH®; and HERO® and represent approximately 70% of our net sales and profits. Prior to the sale of our VITAFUSION® and L'IL CRITTERS® (“VMS”) business at the end of 2025, we included VMS as an eighth “power brand.”

GraphicoTouchland Acquisition

On January 29,28, 2025,2026, the Board declared a 4%4.2% increase in the regular quarterly dividend from $0.28375$0.295 to $ 0.295$0.3075 per share (equivalent to an annual dividend of $1.18$1.23 per share) payable to stockholders of record as of February 14,13, 2025.2026. The increase raises the annualized dividend payout from $277.0$287.0 to approximately $287.0$291.0 on an annualized basis.

Net sales for the year ended December 31, 20242025 grew 4.1%1.6% over 2023,2024, with gains in Consumer Domestic and Consumer International, partially offset by lower sales in SPD. The gains are primarilySPD due to favorabledivestitures. volumes,The and2025 pricing/productgains mix across all three segments, includinginclude the benefit of recent acquisitions in Consumer Domestic and Consumer International, partially offset by the exit of product lines in SPDall three segments, a decline in vitamin sales in Consumer Domestic and unfavorable foreign currency exchange rates in Consumer International. Excluding these items, Consumer International and SPD experienced favorable volumes and pricing/product mix, partially offset by lower price/mix in Consumer Domestic.

Operating margin decreased 470 basis points to 13.3% in 2024 from 18.0% in 2023. The 2024 operating margin includes a non-cash charge of $357.1 or 580 basis points$357.1, related to the impairment of the VITAFUSION and L'IL CRITTERS indefinite-lived trade name as well as a definite-lived customer relationship intangible asset and PP&E specific to the VMS business. Excluding the impairment charge, operating margin increased 110 basis points due to favorable gross margins, slightly offset by higher marketing expenses.

Cash provided by operations was $1,156.2$1,215.4 in 2024,2025, a $125.6$59.2 increase from the prior year primarily duedriven toby an increase inhigher cash earnings (netand incomeworking adjustedcapital forimprovement non-cash items).actions.

We returned $277.0$1,187.2 to stockholders in 20242025 towith our$900.0 stockholdersof throughshare repurchases and $287.2 of cash dividends paid.

Our ability to generate sales depends on consumer demand for our products and retail customers’ decisions to carry our products, which are, in part, affected by general economic conditions in our markets. While a vast majority of our products are consumer staples and less vulnerable to decreases in discretionary spending than other products, certain of our products,products are more likely to be affected by consumer decisions to control spending. Some retail customers have responded to economic conditions by increasing their private label offerings (primarily in the dietary supplements, stain fighters, diagnostic kits and oral analgesics categories), launching their own brands, and consolidating the product selections they offer to the top few leading brands in each category. In addition, an increasing portion of our product categories are being sold by club stores, dollar stores, mass merchandisers and internet-based retailers. These factors have placed downward pressure on our sales and gross margins.

We intend to continue to aggressively pursue several key strategic initiatives: maintain competitive marketing and trade spending, tightly control our cost structure, expand our online market share by continuing to invest in e-commerce (global on-line sales were 21.4% of consumer sales in 20242025), expand our presence and product offerings to consumers outside of the United States, continue to develop and launch new and differentiated products, pursue strategic acquisitions, continue to grow our product sales globally and maintain an offering of premium and value brand products to appeal to a wide range of consumers. Our global product portfolio consists of both premium (64% of total worldwide consumer revenue in 2024) and value (36% of total worldwide consumer revenue in 2024) brands, whichFinally we believe enables us to succeed in a range of economic environments. We intend towill continue to developfocus on core growth and have recently announced long-term targets to accelerate our core growth by (1) increasing Arm & Hammer from a portfolio$2 ofbillion appealing new productsbrand to builda loyalty$3 amongbillion cost-consciousbrand, consumers.(2) Wedriving deriveglobal oral care expansion from $1 billion to $1.5 billion behind TheraBreath, and (3) investing in our international businesses with a substantialfocus percentageon ofM&A ourto revenuesgrow from sales$1 of liquid laundry detergent. We continuebillion to evaluate$2 and vigorously address pressures on this business through, among other things, new product introductions and increased marketing and trade spending.billion.

Over the past two two decades, we have diversified from an almost exclusively U.S. business to a global company with approximately 18% of sales derived from countries outside of the United States in 2024,2025, and we believe ongoing international expansion represents a significant opportunity to grow our business. We have subsidiary operations in eight countries (Canada, Mexico, U.K., France, Germany, China, Australia, and Japan). We also export products to over 130100 other countries through our Global Markets Group using a broad network of third-party distributors. In 2024,2025, we benefited from our expanded global footprint and expect to continue to focus on selectively expanding our global business.

We also continue to focus on controlling our costs. Historically, we have been able to mitigate the effects of cost increases including tariffs primarily by implementing cost reduction programs and, to a lesser extent, by passing along cost increases to customers. We have also entered into set pricing and pre-buying arrangements with certain suppliers and hedge agreements for diesel fuel and other commodities. Additionally, our focus on tight cost controls has enabled us to effectively navigate challenging economic conditions. However, the current domestic and international political environment, including existing and potential changes to U.S. policies related to global trade and tariffs, including tariffs imposed by other countries in response to or in anticipation of U.S. tariffs, have resulted in uncertainty regarding the global economy and with respect to our operations and costs.

The identification and integration of strategic acquisitions areis an important component of our overall strategy and product category diversification. Acquisitions have added significantly to our sales, profits and product category diversification over the last decade. This is evidenced by our 2015 acquisition of certain assets of Varied Industries Corporation (the “Vi-cor Acquisition”),Corporation, the 2016 acquisitions of Spencer Forrest, Inc., the maker of TOPPIK (the “Toppik Acquisition”), and the ANUSOL and RECTINOL businesses from Johnson & Johnson (the “Anusol Acquisition”), the 2017 acquisitions of the VIVISCAL brand from Lifes2Good Holdings Limited (the “Viviscal Acquisition”), and the WATERPIK brand from Pik Holdings, Inc. (the “Waterpik Acquisition”), the 2020 acquisition of the ZICAM brand from Consumer Health Holdco LLC, the 2021 acquisition of the THERABREATH brand from Dr. Harold Katz, LLC and HK-IP International, Inc, the 2022 acquisition of the HERO brand which includes the MIGHTY PATCH acne treatment productsproducts, andthe 2024 acquisition of Graphico, Inc. (the “Graphico Acquisition”), a Japan-based distributor.distributor, and the 2025 acquisition of TOUCHLAND® hand sanitizers. We actively seek acquisitions that fit our guidelines, and our strong financial position provides us with flexibility to take advantage of acquisition opportunities. In addition, our ability to quickly integrate acquisitions and leverage existing infrastructure has enabled us to establish a strong track record in making accretive acquisitions. Since 2001, we have acquired six of our seven “power brands.”

We believe we are well positioned to meet the ongoing challenges described above due to our strong financial condition, experience operating in challenging environmentsenvironments, talented and dedicated employees and continued focus on key strategic initiatives. Our focus is to maintain competitive marketing and trade spending, manage our cost structure, continue to develop and launch new and differentiated products, while pursuing strategic acquisitions. This focus, together with the strength of our portfolio of premium and value brands, has enabled us to succeed in a range of economic environments. Moreover, the generation of a significant amount of cash from operations provides us with the financial flexibility to pursue acquisitions, drive new product development, make capital expenditures to support organic growth and gross margin improvements, return cash to stockholders through dividends and share buy backs, and reduce outstanding debt. These factors position us to continue to increase stockholder value over the long-term.

Virtually all of our revenue represents sales of finished goods inventory and is recognized when received or picked up by our customers. The reserves for consumer and trade promotion liabilities and sales returns are established based on our best estimate of the amounts necessary to settle future and existing claims on products sold as of the balance sheet date. Promotional reserves are provided for sales incentives, such as coupons to consumers, and sales incentives provided to customers (such as slotting, cooperative advertising, incentive discounts based on volume of sales and other arrangements made directly with customers). All such costs are netted against sales. Slotting costs are recorded when the product is delivered to the customer. Cooperative advertising costs are recorded when the customer places the advertisement for our products. Discounts relating to price reduction arrangements and coupons are recorded when the related sale takes place. Costs associated with end-aisle or other in-store displays are recorded when product that is subject to the promotion is sold. We rely on historical experience and forecasted data to determine the required reserves. For example, we use historical experience to project coupon redemption rates to determine reserve requirements. Based on the total face value of Consumer Domestic coupons redeemed over the past several years, if the actual rate of redemptions were to deviate by 0.1% from the rate for which reserves are accrued in the financial statements, a difference of approximately $0.1 in the reserve required for coupons would result. With regard to other promotional reserves and sales returns, we use experience-based estimates, customer and sales organization inputs and historical trend analysis in arriving at the reserves required. If our estimates for promotional activities and sales returns reserves were to change by 10%, the impact to promotional spending and sales return accruals would be approximately $14.7. While management believes that its promotional and sales returns reserves are reasonable and that appropriate judgments have been made, estimated amounts could differ materially from actual future obligations.$12.8.

During the third quarter of 2024, we continued to experience a decline in market share and a deterioration in the financial performance of our VMS business, which includes the VITAFUSION and L'IL CRITTERS trade name, primarily due to significant product competition coming from new category entrants, including private label. The continued decline in profitability caused management to reassess its long-term strategy and financial outlook of the business. The revised financial outlook reflectsreflected lower estimates of future sales growth and cash flows which resulted in a triggering event in the third quarter. The triggering event required the Company to review the carrying value of assets supporting the business. The assets supporting the VMS business includeincluded the VITAFUSION and L'IL CRITTERS indefinite-lived trade name, a definite-lived customer relationship intangible asset and PP&E specific to our VMS business.

We used an excess earnings discounted cash flow model to determine the fair value of the trade name. The assumptions used in the model requirerequired significant judgement in determining the expected future cash flows. The key assumptions utilized in our impairment analysis included, but were not limited to, net sales growth rates between -15.2% and 2.1%, EBITA margins in the low single digits, and a discount rate of 8.25%. Estimates arewere based on market conditions and management’s current expectation of the success of growth and profitability initiatives. The valuation resulted in a full impairment of the $281.3 trade name and a $15.8 impairment for the remaining carrying value of the customer relationship intangible asset. The remaining carry value of both the trade name and customer relationship intangible asset at December 31, 2024 is $0.0. The VMS business was sold in December 2025.

Income and other Taxes

We develop, manufacture and market a broad range of consumer household and personal care products and specialty products focused on animal nutrition, chemicals and commercial products. Our well-recognized brands include ARM & HAMMER® baking soda, cat litter, laundry detergent, carpet deodorizer and other baking soda-based products; OXICLEAN® stain removers, cleaning solutions, laundry detergents and bleach alternatives; BATISTE® dry shampoo; WATERPIK® water flossers; THERABREATH® oral care products; HERO® acne treatment products; TOUCHLAND® hand sanitizers; TROJAN® condoms, lubricants and vibrators; FIRST RESPONSE® home pregnancy and ovulation test kits; NAIR® depilatories; ORAJEL® oral analgesic; XTRA® laundry detergent; and ZICAM® cold shortening and relief products.products and MISS MOUTH'S® stain removers. Seven of those brands are designated as "power brands" because they compete in large categories, and we believe they have the potential for significant global expansion. Those seven brands are ARM & HAMMER®; OXICLEAN®; BATISTE®; WATERPIK®; THERABREATH®; HERO® and TOUCHLAND® and represent approximately 70% of our net sales and profits.

Net sales for the quarter ended MarchJune 31,30, 2026 were $1,469.3,$1,530.0, an increase of $2.2$23.7 or 0.2%1.6% as compared to the same period in 2025. Net sales for the six months ended June 30, 2026 were $2,999.3, an increase of $25.9 or 0.9% over the comparable six month period of 2025. The components of the net sales increase are as follows:

For the three and six months ended MarchJune 31,30, 2026, the volume change reflects increased product unit sales in all three segments.

For the three and six months ended MarchJune 31,30, 2026, price/mix was unfavorablefavorable in theall Consumerthree Domestic and Consumer International segment, partially offset by the SPD segment.segments.

In the fourth quarter of 2025, we divested the vitaminVMS business. In the second quarter of 2025, we announced that we arewere exiting the Flawless, Spinbrush, and Waterpik showerhead businesses. The business exits were completed by the end of 2025.

In the second quarter of 2026, we completed the acquisition of Miss Mouth's. In the third quarter of 2025, we completed the acquisition of Touchland.

Our gross profit was $681.4$693.9 for the three months ended MarchJune 31,30, 2026, a $21.8$46.9 increase as compared to the same period in 2025. Gross margin increased 140240 basis points (“bps”) in the firstsecond quarter of 2026 compared to the same period in 2025. TheExcluding increaseone-time costs associated with exiting the Flawless, Spinbrush, and Waterpik showerheads businesses in the prior year, gross margin wasincreased primarily40 duebps towhich includes favorable volume and mix of 180 bps, the impact of productivity programs of 150 bps, the mix benefits of the Touchland Acquisitionacquisitions combined with the favorable impact of business exits of 110 bps, favorable volume/price/mix of 50 bps and favorable foreign exchange of 10 bps, partially offset by the impact of higher manufacturing and logistics costs of 180400 bps (including labor, inflationcommodities, in commoditiestariffs and transportation and higher tariffs, net of tariff mitigation actionscosts).

Marketing expenses for the three months ended MarchJune 31,30, 2026 were $139.4,$165.3, an increase of $2.8$8.2 or 2.0%5.2% as compared to the same period in 2025. Marketing expenses as a percentage of net sales in the firstsecond quarter of 2026 increased by 2040 bps to 9.5%10.8% compared to 9.3%10.4% in the same period in 2025 due to 60 bps on higher expense from increased investment in our brands and new products, supporting our innovation initiatives and organic growth.growth, offset by 20 bps of leverage on higher net sales. Marketing expenses for the six months ended June 30, 2026 were $304.7, an increase of $11.0 or 3.7% as compared to the same period in 2025. Marketing expenses as a percentage of net sales for the first six months of 2026 increased by 30 bps to 10.2% as compared to 9.9% in the same period in 2025 due to 40 bps on higher expense from increased investment in our brands and new products, supporting our innovation initiatives and organic growth, offset by 10 bps of leverage on higher net sales.

SG&A expenses were $251.0$252.2 in the firstsecond quarter of 2026, an increase of $23.3$24.0 or 10.2%10.5% as compared to the same period in 2025. SG&A as a percentage of net sales increased 160140 bps to 17.1%16.5% in the firstsecond quarter of 2026 as compared to 15.5%15.1% in the same period in 2025. The increase isreflects primarily160 duebps toof acquisition-related expenses from the Touchland Acquisitionand Miss Mouth's acquisitions and focused investments in new growth initiatives, e-commerce and our international business.business, offset by 20 bps of leverage associated with higher sales. SG&A expenses for the first six months of 2026 were $503.2, an increase of $47.3 or 10.4% as compared to the same period in 2025. SG&A as a percentage of net sales increased 150 bps to 16.8% in the first six months of 2026 compared to 15.3% in 2025. The increase reflects 160 bps of acquisition-related expenses from the Touchland and Miss Mouth's acquisitions and focused investments in new growth initiatives, e-commerce and our international business, offset by 10 bps of leverage associated with higher sales.

Operating margin decreasedincreased 4060 basis points to 19.8%18.1% for the three months ended MarchJune 31,30, 2026, as compared to 20.2%17.5% in the same period in 2025. Operating margin increased 20 basis points to 18.9% for the six months ended June 30, 2026, as compared to 18.7% in the same period in 2025.

Interest income for the three and six months ended MarchJune 31,30, 2026 decreased $6.8$7.8 and $14.6 to $2.5$1.4 and $3.9 as compared to the same period in 2025 due to lower investment income from lower average cash balances.

Interest expense for the three and six months ended MarchJune 31,30, 2026 increased $0.7 and $1.4 to $24.0,$24.2 and $48.2 respectively, as compared to the same period in 2025.

Other income (expense) was nominal for the three and six months ended MarchJune 31,30, 2026 and 2025.

The effective tax rate for the three months ended MarchJune 31,30, 2026 was 20.8%, compared to 23.8% in the same period in 2025. The effective tax rate for the six months ended June 30, 2026 was 20.7%, compared to 22.0%22.8% in the same period in 2025. The decrease isfor both the three and six month periods was primarily due to lowerour statecontinued incometax taxesplanning offset by lower stock option exercises.initiatives.

Segment net sales and income from operations for the three and six months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025 are as follows:follows. In 2025, we exited the VMS, Flawless, Spinbrush and Waterpik showerhead businesses.

Consumer Domestic net sales in the firstsecond quarter of 2026 were $1,117.7,$1,155.8, an increase of $1.7 or 0.1% as compared to the same period in 2025. Consumer Domestic net sales for the six months ended June 30, 2026 were $2,273.5, a decrease of $12.1$10.4 or 1.1%0.5% as compared to the same period in 2025. The components of the net sales change were as follows:

In the fourth quarter of 2025, we divested the vitaminVMS business. In the second quarter of 2025, we announced that we arewere exiting the Flawless, Spinbrush, and Waterpik showerheads businesses. The business exits were completed by the end of 2025.

Net sales excluding business exits, the acquisition of Touchland and changes in foreign exchange rates increased in the firstsecond quarter ended MarchJune 31,30, 20262026. The increase was primarily driven by THERABREATH® mouth wash and HERO® acne treatment products in the Global Markets Group ("GMG") and the subsidiary markets, BATISTE® dry shampoo in GMG, Europe, and Canada, and STERIMAR® nasal congestion relief in GMG. Net sales excluding business exits, the acquisition of Touchland and changes in foreign exchange rates increased in the six months ended June 30, 2026. The increase was primarily driven by THERABREATH® mouth wash, BATISTE® dry shampoo and HERO® acne treatment products in the Global Markets Group, and HERO® acne treatment products in Germany and UK, and ARM & HAMMERBATISTE® Catdry Litter in Canada partially offset by lower salesshampoo in the middleUK, eastGermany, region.and Canada.

Consumer International income from operations was $39.9$41.6 in the firstsecond quarter of 2026, an increase of $2.2$9.2 as compared to the firstsecond quarter of 2025. The prior year included costs associated with exiting the Flawless, Spinbrush, and Waterpik showerheads businesses of $3.8. In the current year, Consumer International income from operations benefited from strong organic sales growth across the portfolio, plus sales volume from the Touchland Acquisition.acquisition. Partially offsetting these volume benefits is the sales impact from the exited businesses. In total, increased sales volumes and changes in mix, primarily from the exited businesses, resulted in a net benefit of $6.4.$8.7. Consumer International also experienced favorable manufacturingprice/mix of $8.9 and distributionfavorable expensesforeign exchange rates of $5.4.$1.9. These benefits were partially offset by higher SG&A expenses of $7.3$7.0 primarilyreflecting dueacquisition-related tocosts thefrom Touchland Acquisition,Touchland, higher marketing expenses of $6.5$5.4 to support growth, and unfavorablehigher price/mixmanufacturing and distribution expenses of $3.3. Income from operations was also impacted by favorable foreign exchange rates of $7.6.$2.2.

SPD net sales were $77.7$76.7 in the firstsecond quarter of 2026, an increase of $2.3$2.1 or 3.1%2.8% as compared to the same period in 2025. SPD net sales were $154.4 for the first six months of 2026, an increase of $4.4, or 2.9% as compared to the same period in 2025. The components of the net sales change were as follows:

Net sales increased in the three and six months ended MarchJune 31,30, 2026 primarily due to growth in our sodium bicarbonate and animal nutrition businesses.

SPD income from operations was $10.9$11.4 in the firstsecond quarter of 2026, a decrease of $1.9$0.5 compared to the firstsecond quarter of 2025 due to unfavorable manufacturing costs of $2.3 and higher SG&A expenses of $1.4, partially offset by higher sales volumes of $1.7, favorable price/mix of $1.1, and lower marketing expenses of $0.2. SPD income from operations was $22.3 in the first six months of 2026, a decrease of $2.4 as compared to the same period in 2025 due to higher SG&A expenses of $2.3$3.7 and unfavorable manufacturing costs of $1.1,$3.4, partially offset by higher sales volumes of $2.2, favorable price/mix of $0.8, higher volumes of $0.5$1.9, and lower marketing expenses of $0.3.$0.5.

Equity in earnings of affiliates represents the results of Armand in the three and six months ended MarchJune 3130, 2026 and 2025.

As of MarchJune 31,30, 2026, we had $503.4$254.8 in cash and cash equivalents, and approximately $1,993.0$1,943.0 available through our revolving credit facility and our commercial paper program. To preserve our liquidity, we invest cash primarily in government money market funds, prime money market funds, short-term commercial paper and short-term bank deposits.

On January 28, 2026, the Board declared a 4.2% increase in the regular quarterly dividend from $0.295 to $0.3075 per share (equivalent to an annual dividend of $1.23 per share) payable to stockholders of record as of February 13, 2026. The increase raises the annualized dividend payout from $287.0 to approximately $291.0 on an annualized basis.$291.0.

Net Cash Provided by Operating Activities – Our primary source of liquidity is the cash flow provided by operating activities, which is dependent on net income and changes in working capital. Our net cash provided by operating activities in the threesix months ended MarchJune 31,30, 2026 decreasedincreased by $10.9$45.1 to $174.8$461.6 as compared to $185.7$416.5 in the same period in 2025 due to ana increasedecrease in working capital partially offsettingand an increase in cash earnings (net income adjusted for non-cash items). The increasedecrease in working capital is primarily related to thehigher timingaccounts ofpayable incomeas taxwe paymentsextend andpayment terms with certain vendors, partially offset by higher inventory purchases to support growth partially offset by an increase in accounts payable.growth. We measure working capital effectiveness based on our cash conversion cycle. The following table presents our cash conversion cycle information for the quarters ended MarchJune 31,30, 2026 and 2025:

The MarchJune 31,30, 2025 cash conversion cycle calculation was revised to reflect a quarter-to-quarter four-period average method.

The cash conversion cycle (defined as the sum of DSO and DIO less DPO) is calculated using a quarter-to-quarter four-period average method. The Company considers the four-period average preferable to the previously employed two-period average as it mitigates period-to-period volatility. If the prior two-period average method had been applied as of March 31, 2025, DIO would still reflect a decrease of six days and the cash conversion cycle would still reflect a decrease of eight days compared to the previous year. The decrease in DIO is primarily attributable to enhanced inventory management initiatives. The increase in DPO is primarily related to extending payment terms with certain vendors. We continue to focus on reducing our working capital requirements.

Net Cash Used in Investing Activities – Net cash used in investing activities during the first threesix months of 2026 was $33.5,$361.9, primarily reflecting $31.9$300.0 for the Miss Mouth's acquisition and $61.8 for additions to property, plant, and equipment. Net cash used in investing activities during the first threesix months of 2025 was $16.7,$39.6, primarily reflecting $16.5$39.0 for property, plant and equipment additions.

Net Cash Used in Financing Activities – Net cash used in financing activities during the first threesix months of 2026 was $44.9,$251.7, reflectingprimarily $72.9attributable to $180.5 of business acquisition liability payments and $145.8 of cash dividend payments and $19.8 related to business acquisition liability payments, partially offset by a $36.2 source$49.9 of cashnet fromcommercial thepaper Company's TSA agreement with Piping Rockborrowings and $30.8 of proceeds from stock option exercises of $16.6.exercises. Net cash used in financing activities during the first threesix months of 2025 was $61.0,$426.8, reflecting $72.4$300.0 of share repurchases, $145.0 of cash dividend payments and $5.9 related to the payment of a business acquisition liability, partially offset by $19.3$26.6 of proceeds from stock option exercises.