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EQUITY | 3 Months Ended
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Dec. 30, 2023
Equity [Abstract] |
EQUITY | EQUITY (DEFICIT) The following tables provide a summary of the changes in equity (deficit) for each of the periods indicated:
| Common Shares and Capital in Excess of Stated Value |  | Retained Earnings |  | Treasury Shares |  | Accumulated Other Comprehensive Loss |  |  |  |  |  | Total Equity (Deficit)
Balance at September 30, 2023 | $ | 353.1 |  |  | $ | 490.9 |  |  | $ | (998.5) |  |  | $ | (112.8) |  |  |  |  |  |  | $ | (267.3) |
Net income (loss) | — |  |  | (80.5) |  |  | — |  |  | — |  |  |  |  |  |  | (80.5) |
Other comprehensive income (loss) | — |  |  | — |  |  | — |  |  | (8.9) |  |  |  |  |  |  | (8.9) |
Share-based compensation | 11.7 |  |  | — |  |  | — |  |  | — |  |  |  |  |  |  | 11.7 |
Dividends declared ($0.66 per share) | — |  |  | (38.0) |  |  | — |  |  | — |  |  |  |  |  |  | (38.0) |
Treasury share purchases | — |  |  | — |  |  | (3.1) |  |  | — |  |  |  |  |  |  | (3.1) |
Treasury share issuances | (15.2) |  |  | — |  |  | 15.9 |  |  | — |  |  |  |  |  |  | 0.7 |
Balance at December 30, 2023 | $ | 349.6 |  |  | $ | 372.4 |  |  | $ | (985.7) |  |  | $ | (121.7) |  |  |  |  |  |  | $ | (385.4) |
The sum of the components may not equal due to rounding.
| Common Shares and Capital in Excess of Stated Value |  | Retained Earnings |  | Treasury Shares |  | Accumulated Other Comprehensive Loss |  |  |  |  |  | Total Equity (Deficit)
Balance at September 30, 2022 | $ | 364.0 |  |  | $ | 1,020.1 |  |  | $ | (1,091.8) |  |  | $ | (144.6) |  |  |  |  |  |  | $ | 147.7 |
Net income (loss) | — |  |  | (64.7) |  |  | — |  |  | — |  |  |  |  |  |  | (64.7) |
Other comprehensive income (loss) | — |  |  | — |  |  | — |  |  | (24.6) |  |  |  |  |  |  | (24.6) |
Share-based compensation | 20.8 |  |  | — |  |  | — |  |  | — |  |  |  |  |  |  | 20.8 |
Dividends declared ($0.66 per share) | — |  |  | (37.5) |  |  | — |  |  | — |  |  |  |  |  |  | (37.5) |
Treasury share purchases | — |  |  | — |  |  | (0.8) |  |  | — |  |  |  |  |  |  | (0.8) |
Treasury share issuances | (17.2) |  |  | — |  |  | 35.9 |  |  | — |  |  |  |  |  |  | 18.7 |
Balance at December 31, 2022 | $ | 367.6 |  |  | $ | 917.9 |  |  | $ | (1,056.7) |  |  | $ | (169.3) |  |  |  |  |  |  | $ | 59.5 |
The sum of the components may not equal due to rounding. Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss (“AOCL”) by component were as follows for each of the periods indicated:
|  | Three Months Ended
|  | Foreign Currency Translation Adjustments |  | Net Unrealized Gain (Loss) On Derivative Instruments |  | Net Unrealized Gain (Loss) On Securities |  | Pension and Other Post-Retirement Benefit Adjustments |  | Accumulated Other Comprehensive Income (Loss)
Balance at September 30, 2023 |  | $ | (21.9) |  |  | $ | 20.1 |  |  | $ | (38.6) |  |  | $ | (72.4) |  |  | $ | (112.8) |
Other comprehensive income (loss) before reclassifications |  | 3.1 |  |  | (11.0) |  |  | (0.9) |  |  | — |  |  | (8.8) |
Amounts reclassified from accumulated other comprehensive net income (loss) |  | — |  |  | (2.0) |  |  | — |  |  | (2.1) |  |  | (4.1) |
Income tax benefit (expense) |  | — |  |  | 3.3 |  |  | — |  |  | 0.7 |  |  | 4.0 |
Net current period other comprehensive income (loss) |  | 3.1 |  |  | (9.7) |  |  | (0.9) |  |  | (1.4) |  |  | (8.9) |
Balance at December 30, 2023 |  | $ | (18.8) |  |  | $ | 10.4 |  |  | $ | (39.5) |  |  | $ | (73.8) |  |  | $ | (121.7) |
Balance at September 30, 2022 |  | $ | (28.9) |  |  | $ | 33.3 |  |  | $ | (79.7) |  |  | $ | (69.3) |  |  | $ | (144.6) |
Other comprehensive income (loss) before reclassifications |  | 7.2 |  |  | (6.4) |  |  | (26.8) |  |  | — |  |  | (26.0) |
Amounts reclassified from accumulated other comprehensive net income (loss) |  | — |  |  | (5.0) |  |  | — |  |  | (3.9) |  |  | (8.9) |
Income tax benefit (expense) |  | — |  |  | 2.9 |  |  | 6.4 |  |  | 1.0 |  |  | 10.3 |
Net current period other comprehensive income (loss) |  | 7.2 |  |  | (8.5) |  |  | (20.4) |  |  | (2.9) |  |  | (24.6) |
Balance at December 31, 2022 |  | $ | (21.7) |  |  | $ | 24.8 |  |  | $ | (100.2) |  |  | $ | (72.2) |  |  | $ | (169.3) |
The sum of the components may not equal due to rounding. Share-Based Awards In January 2024, the shareholders of Scotts Miracle-Gro approved an amendment and restatement of The Scotts Miracle-Gro Company Long-Term Incentive Plan to increase the maximum number of Common Shares available for grant to participants under the Plan by 2.5 million Common Shares. Total share-based compensation was as follows for each of the periods indicated:
| Three Months Ended |  |
| December 30, 2023 |  | December 31, 2022 |  |  |  |
Share-based compensation | $ | 16.0 |  |  | $ | 20.9 |  |  |  |  |
Related tax benefit recognized | 2.6 |  |  | 4.7 |  |  |  |  |
Stock Options Stock option activity was as follows:
| No. of Options |  | Wtd. Avg. Exercise Price |  | Wtd. Avg. Remaining Life |  | Aggregate Intrinsic Value
Awards outstanding at September 30, 2023 | 1,191,183 |  |  | $ | 76.64 |  |  | 6.6 years |  |
Granted | 1,287,402 |  |  | 53.46 |  |  |  |  |
Forfeited | (18,381) |  |  | 50.40 |  |  |  |  |
Awards outstanding at December 30, 2023 | 2,460,204 |  |  | 64.70 |  |  | 8.2 years |  | $ | 21.9 |
Exercisable | 399,223 |  |  | 66.24 |  |  | 1.9 years |  | 0.9 |
The weighted-average fair value per share of each option granted during the three months ended December 30, 2023 and December 31, 2022 was $15.16 and $13.67, respectively. There were no options exercised during the three months ended December 30, 2023 and December 31, 2022. As of December 30, 2023, there was $11.7 of total unrecognized pre-tax compensation cost, net of estimated forfeitures, related to nonvested stock options that is expected to be recognized over a weighted-average period of 2.6 years. Cash received from the exercise of stock options, including amounts received from employee purchases under the employee stock purchase plan, was $0.5 and $0.6 for the three months ended December 30, 2023 and December 31, 2022, respectively. The grant date fair value of stock option awards is estimated using a binomial model. Expected market price volatility is based on implied volatilities from traded options on Common Shares and historical volatility specific to the Common Shares. Historical data, including demographic factors impacting historical exercise behavior, is used to estimate stock option exercises and employee terminations within the valuation model. The risk-free rate for periods within the contractual life of the stock option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected life of stock options is based on historical experience and expectations for grants outstanding. The weighted average assumptions for awards granted in fiscal 2024 are as follows:
Expected volatility | 38.8 | %
Risk-free interest rate | 4.7 | %
Expected dividend yield | 4.1 | %
Expected life | 6.1 years
Restricted share-based awards Restricted share-based award activity (including restricted stock units and deferred stock units) was as follows:
| No. of Units |  | Wtd. Avg. Grant Date Fair Value per Unit
Awards outstanding at September 30, 2023 | 611,838 |  |  | $ | 89.10 |
Granted | 204,249 |  |  | 48.79 |
Vested | (11,620) |  |  | 79.38 |
Forfeited | (18,362) |  |  | 67.76 |
Awards outstanding at December 30, 2023 | 786,105 |  |  | 79.27 |
The weighted-average grant-date fair value of restricted stock-based awards granted during the three months ended December 30, 2023 and December 31, 2022 was $48.79 and $50.59 per share, respectively. As of December 30, 2023, there was $18.2 of total unrecognized pre-tax compensation cost, net of estimated forfeitures, related to nonvested restricted stock-based awards that is expected to be recognized over a weighted-average period of 1.9 years. Performance-based awards Performance-based award activity was as follows (based on target award amounts):
| No. of Units |  | Wtd. Avg. Grant Date Fair Value per Unit
Awards outstanding at September 30, 2023 | 544,790 |  |  | $ | 76.85 |
Granted | 11,146 |  |  | 44.86 |
Vested (a) | (181,791) |  |  | 59.88 |
Forfeited | (184,799) |  |  | 64.31 |
Awards outstanding at December 30, 2023 | 189,346 |  |  | 99.60 |
(a) Vested at a weighted average of 100% of the target performance share units granted. The weighted-average grant-date fair value of performance-based awards granted during the three months ended December 30, 2023 and December 31, 2022 was $44.86 and $63.61 per share, respectively. As of December 30, 2023, there was $2.2 of total unrecognized pre-tax compensation cost, net of estimated forfeitures, related to nonvested performance-based awards that is expected to be recognized over a weighted-average period of 2.3 years. The total fair value of performance-based units vested during the three months ended December 30, 2023 and December 31, 2022 was $10.6 and $6.0, respectively. During the three months ended December 30, 2023, the Company determined that short-term variable incentive compensation for fiscal 2024 would be provided to certain employees as performance-based awards in lieu of a cash-based program. The program is structured so the fiscal 2024 incentive grant, if any, will be made on or near the incentive payout date, subject to certain performance conditions and a service requirement. The number of performance-based units that are ultimately issued to participating employees will be determined based on a target incentive payout amount for each employee adjusted up or down based on actual performance compared to the performance conditions, and then converted into a variable number of performance-based award units based on the fair value of the Company’s Common Shares on the grant date. The awards are classified as liability awards and, as of December 30, 2023, the Company had accrued $2.3 in the “Other current liabilities” line in the Condensed Consolidated Balance Sheets associated with these awards. As of December 30, 2023, there was $17.9 of total unrecognized pre-tax compensation cost related to these nonvested performance-based awards that is expected to be recognized over the remainder of fiscal 2024. The units associated with these awards are excluded from the table above.

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