IMPAIRMENT, RESTRUCTURING AND OTHER

3 Months Ended

Dec. 28, 2024

Restructuring and Related Activities [Abstract]

Activity described herein is classified within the “Cost of sales—impairment, restructuring and other” and “Impairment, restructuring and other” lines in the Condensed Consolidated Statements of Operations. The following table details impairment, restructuring and other charges (recoveries) for each of the periods presented:


	Three Months Ended
		December 28, 2024		December 30, 2023

Cost of sales—impairment, restructuring and other:

Restructuring and other charges (recoveries), net		$	1.8	$	(5.8)
Right-of-use asset impairments		1.7		—
Property, plant and equipment impairments		1.6		—
Operating expenses—impairment, restructuring and other:

Restructuring and other charges (recoveries), net		9.6		(7.1)

Loss on exchange of convertible debt investment		7.0		—



Total impairment, restructuring and other charges (recoveries), net		$	21.7	$	(12.9)

The following table summarizes the activity related to liabilities associated with restructuring activities during the three months ended December 28, 2024:


Amounts accrued at September 30, 2024	$	18.9
Restructuring charges	10.2

Payments	(9.9)
Amounts accrued at December 28, 2024	$	19.2

As of December 28, 2024, restructuring accruals include $7.7 that is classified as long-term.

During the three months ended December 28, 2024, the Company recorded executive severance charges of $9.5 in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations.

During the three months ended December 28, 2024, the Company recorded a non-cash loss of $7.0 in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations related to the exchange of its convertible debt investment in RIV Capital for non-voting exchangeable shares of Cansortium. Refer to “NOTE 2. INVESTMENT IN UNCONSOLIDATED AFFILIATES” for further details.

During fiscal 2022, the Company began implementing a series of Company-wide organizational changes and initiatives intended to create operational and management-level efficiencies. As part of this restructuring initiative, the Company reduced the size of its supply chain network, reduced staffing levels and implemented other cost-reduction initiatives. The Company also accelerated the reduction of certain Hawthorne inventory, primarily lighting, growing environments and hardware products, to reduce on hand inventory to align with the reduced network capacity. During the three months ended December 28, 2024, the Company incurred costs of $1.4 in its U.S. Consumer segment and $3.7 in its Hawthorne segment associated with this restructuring initiative in the “Cost of sales—impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations. During the three months ended December 30, 2023, the Company recorded recoveries of $3.7 associated with this restructuring initiative, primarily related to the sale of certain previously-reserved inventory at amounts in excess of estimated net realizable value, partially offset by employee termination benefits and facility closure costs. The Company incurred costs of $2.0 in its U.S. Consumer segment and recorded recoveries of $7.7 in its Hawthorne segment in the “Cost of sales—impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations during the three months ended December 30, 2023. The Company recorded recoveries of $0.8 in its U.S. Consumer segment and incurred costs of $0.3 in its Hawthorne segment and $2.4 at Corporate in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations during the three months ended December 30, 2023. Costs incurred since the inception of this restructuring initiative through December 28, 2024 were $300.9 for the Hawthorne segment, $59.8 for the U.S. Consumer segment, $2.9 for the Other segment and $25.1 for Corporate.

During the three months ended December 30, 2023, the Company recorded a gain of $12.1 in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations associated with a payment received in resolution of a dispute with the former ownership group of a business that was acquired in fiscal 2022. This payment was classified as an operating activity in the Condensed Consolidated Statements of Cash Flows.