You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: One quick bit of housekeeping.
Cory and I will be participating in the Raymond James consumer conference on September 14 which will be held virtually.
We'll publish more details related to the time and date a couple of weeks in advance.
With that, let's move on to today's call.
Investors should familiarize themselves with the full range of risk factors that could impact our results.
Those are filed with our Form 10-K, which is filed with the Securities and Exchange Commission.
I also want to remind everyone that today's call is being recorded.
An archived version of the call will be available on our website.
This is an important call today, perhaps the most important call with the investment community over the past year.
It has nothing to do with the fact that we posted another strong quarter and remain on pace for a record year.
It's because we're finally at the inflection point, everyone knew was coming.
Yes, we're starting the run-up against tough comps in both businesses.
Yes, we're starting to see consumers get back to their normal routines.
And yes, like a lot of consumer companies, the cost pressures we're seeing from commodities are starting to feel unrelenting.
But as I take a deeper look at our business, I can't help but feel positive.
If you only look at a quarterly P&L, you can't possibly understand what's happening here.
You have to dig, you have to analyze.
You have to find the answers to questions you've never been thought about asking in the past.
For more than a year, I've been telling anyone who would listen that I believe Scotts Miracle-Gro would exit COVID as a fundamentally stronger company.
And the deeper we dig, the more we analyze, the more I'm convinced that is exactly what's happened.
Our consumer base today is vastly bigger and more engaged than prior to the pandemic.
Our ability to engage on their terms is better today due to the vast improvements in our direct-to-consumer initiatives.
And our ability to provide them the best possible outcomes has been made even easier by an innovation team that continues to turn out important new innovation.
Our growth engine, Hawthorne, continues to outperform the market and is positioning itself for long-term success.
We've built competitive advantages that others in the industry can't match.
We brought science-based innovation to this industry, and we continue to embrace a vision that is driving us to explore new and creative opportunities for growth.
In addition to the strength of our businesses, our balance sheet gives us more financial flexibility than we've had in a decade.
We have opportunities to invest in immediate growth, and we'll pursue those.
We have opportunities to invest in long-term growth, and we'll pursue that too.
And we have the opportunity to return cash to shareholders, which we'll also pursue especially given the recent pullback in our share price.
We're not doing everything perfectly here.
But when I look for major weaknesses, I just don't see them right now.
We've taken full advantage of the unique opportunity that presented itself over the past 18 months and have put ourselves in a great position.
First, I want to discuss the continued strength of our U.S. consumer business.
Consumer engagement remain strong; and by the time we navigate through the next year, we expect to have retained nearly all of the growth we captured in 2020.
I'm not sure many other CPG companies can say that.
Again, the trends are extremely strong.
We were up 48% in the quarter, and we continue to expect growth of 40% to 45% on a full-year basis.
We continue exploring opportunities that are bigger in scope, and we are increasingly committed to finding creative ways to invest in other areas of the cannabis industry.
Fourth, I'll share some early thoughts about our view of next year.
We're not providing fiscal '22 guidance today, but we do have a working thesis about next year, and I believe long-term shareholders will like what they hear.
And fifth, I want to touch on our evolving thoughts about returning cash to shareholders.
Let's start with U.S. consumer.
Clearly, we've done a better job on the top line than we expected coming into the year.
Consumer engagement exceeded our expectations and allowed us to call up our numbers twice this season.
Of course, a lot of that benefit in excess of $1 a share has been offset by commodity pressures that every company in the consumer product space is trying to navigate.
I'll let Cory dive deeper into those details.
I want to focus my time on the strong underlying foundation of the business.
The most critical takeaway is this: Consumer engagement remains extremely high.
Entering the season, our research suggested about 85% of consumers who came into the category last year would return.
We believe the actual number was probably closer to 75%; however, we're confident we benefited from a higher overall level of participation as one-third of all consumers said they increased their participation in our category this spring.
When we subtract consumers who did less gardening this year from those who did more, our data suggests participation was up 8%.
And that aligns pretty well with consumer purchase of our products at our largest retail partners.
Entering August, POS dollars at our largest four retail partners were up 4%.
In units, the number is 8%.
There's a story here and it's important to understand.
In most years, the gap between units and dollars is negligible.
In 2020, however, retailers did almost no promotional activity, so POS dollars far outpaced units.
This year, retailers promoted more than in 2020.
The change in their behavior meant the difference between POS dollars and units swung back in the other direction.
In our soils business, where four-for-10 and five-for-10 promotions were reintroduced, POS dollars are up 5% year to date.
But units, a more accurate reflection of our shipments, as well as consumer activity, are up 8%.
In mulch, dollars were up 11% and units up 20%.
And our other branded categories where the year-over-year impact of promotional activity is less pronounced, like lawn fertilizer, weed control, and grass seed, POS dollars were up 3%, 8%, and 14%, respectively.
This is the third straight year we're seeing double-digit growth in grass seed.
So across all categories, the numbers we're posting would be good in any year.
So we're extremely pleased given the tough comps.
Still, we've given up a lot of the POS gains we reported on the last call when the year-to-date number was plus 20%.
Most of the reduction was expected because of the difficult comparisons.
However, we believe the result would have been better if had not been for the weather challenges that undoubtedly drove the number lower in May and June.
On Mother's Day weekend, historically the largest weekend of the gardening season, it snowed in some key markets.
Memorial Day brought record cold through most of the Midwest and Northeast.
Father's Day was not much better.
In fact, June as a whole was extremely wet in much of the Midwest.
And of course, the record heat and drought conditions in the Western U.S. have not helped either.
We believe the impact from weather was magnified this year.
Last year, when people were working from home, we saw a lot more POS happening on weekdays than we were accustomed to seeing.
So if the weekend weather was lousy, it wasn't a big deal because more people were shopping on weekdays.
But this year, because weekday foot traffic was closer to normal, the weekends have become much more important again.
So lousy weather is more difficult to overcome this year and we've seen a lot of it.
This is not an excuse.
Weather can impact the business and it was a significant headwind this year.
By September 30, I suspect weather will have cost us at least 2 points of growth in fiscal '21.
Nonetheless, consumer engagement remains encouraging.
Our third quarter historically accounts for about 55% of full-year POS.
In the 13-week period from April through June, POS was down 1% this year compared to 2020, but it's up 24% in those same weeks compared to 2019.
If we look only at the last nine weeks of that period, that's when we started to hit tougher comps.
POS was down 12% from 2020 levels.
However, it's up 30% from 2019 during that same nine-week window.
If we extrapolate the current trends for the balance of the year, we expect full-year POS dollars to be up slightly from last year.
POS units are likely to be up low to mid-single digits.
Compared to 2019, we expect POS for 2021 to be up more than 25%.
The current consumer trends, combined with planned higher retail inventory levels, give us a high degree of confidence in our full-year sales growth guidance for the U.S. consumer business, which we set at the range of 7% to 9%.
Behind the numbers, there are a lot of great stories.
I'd love to share details on all of them, but I'm going to turn the page and share some of the highlights from Hawthorne where we continue to see strength across the board.
Through June, sales are 60% higher on a year-to-date basis as the business continues to build on its market-leading position.
In Q3, our lighting business grew 77%.
Within that number, our market-leading Gavita brand grew at more than twice that rate.
We continue to see new growth facilities come online across the country and the retrofit market remained an important part of the story in legacy markets in the Western United States.
Our success in lighting continues to be led by innovation.
In particular, we continue to see great success with our new LED lighting products that provide growers a one-for-one replacement for existing, high-pressure sodium lights.
Outside of lighting, we continue to see strength in the consumable category as well, which is a more accurate reflection of growth in the actual cannabis market.
Nutrient sales were up 54% in the quarter and growing media was up 32%.
Our signature brands significantly outperformed the overall category.
General Hydroponics grew roughly 30 points more than the total nutrient portfolio, and our Mother Earth and Botanicare brands grew three times faster than the rest of our growing media business.
The across-the-board strength led to the 48% growth we saw in the quarter, which ended with our largest sales month ever in June.
The growth rate we expect for the full year is a little more than two times higher than our initial guidance.
The upside this year allowed us to upgrade our talent, enhance our innovation efforts and improve our marketing.
We expect those investments will help drive the business again next year and the years to follow.
The acquisition of HydroLogic is pretty straightforward.
This is an easily integrated bolt-on deal that is highly strategic.
HydroLogic is a leading provider of products and systems related to water filtration and purification.
That makes it a strong complement to our existing irrigation supply business in a high-margin category.
We continue to have more M&A opportunities in the pipeline in both business segments than we can digest right now.
The challenge for Hawthorne is that many of the targets are small- to medium-sized businesses.
You might think that small deals are easy to get done.
In most cases, it's just the opposite.
The lack of sophisticated IT systems and financial controls makes the due diligence process harder and more time-consuming.
And we're not going to rush the deal just to get it done, but I will tell you we're making good progress.
Separately, we remain committed to putting capital to work in areas of the cannabis industry that are closer to the end consumer and to the grower and within the balance of current federal law, as well as the requirements of our lenders.
After months of work by an internal task force, we've created a process that will allow us to make nonequity investments in other entities that invest in cannabis brands and operations.
In fact, we've been in discussions with potential partners to bring this strategy to life and hope to see significant movement in the near future.
We've developed a highly successful business in Hawthorne based on the current state-authorized marketplace.
Even though we've never been involved with plant-touching activities, we understand the space, as well as anyone, perhaps better than anyone.
Our evolving vision is to create the optionality to have an early mover advantage in the broader U.S. cannabis market when federal law allows.
There is little doubt this industry is poised for significant growth.
And given our track record, I believe we have an absolute right to win here.
I look forward to sharing more details in the months ahead.
Speaking of the months ahead, I realize everyone wants to know what's in store for fiscal '22, so let me change gears and share some high-level thoughts.
The easy part of this equation is Hawthorne.
The run rate of this business segment remains strong.
We just completed an acquisition and hopefully, there are more on the horizon.
We continue to extend our leadership in the overall marketplace.
We continue to face the same challenge we've had for several years.
We entered fiscal '22 against pretty tough comps.
But based on everything we're seeing, it's hard to imagine growth being below 10% to 20% next year.
I know that feels like a conservative estimate to many, perhaps it is, and perhaps our guidance range will be different.
But taking a conservative approach has worked for us over the past several years and we'll continue down that same path.
I'm not going to overcommit to growth here.
The more challenging questions for next year are related to the growth in the U.S. consumer business and the continued pressures from higher commodity costs.
I'll cover the first part, Cory will cover the second.
We still have two months to go in the year, so Mike and I are working to keep the team focused all the way to the finish line.
That said, I like where we are.
That remains my view.
We're probably going to continue to feel some top-line pressure through next April because of the difficult comps.
So to some extent, fiscal '22 will be a mirror image of this year, a tough start that should get easier as the year goes on.
Right now, I believe it's prudent to plan for the U.S. consumer business to decline slightly next year.
Some of you have models suggesting a double-digit decline.
We're hoping to do better than that given the expected benefits from pricing, but it's still too early to tell.
Obviously, we won't really know until this time next year.
But our consumer business picked up nearly a decade worth of growth in the last year, and it feels pretty sticky so far.
Coupled with the changing demographics of the lawn and garden market and a red hot real estate market, it leaves us in a far stronger position in a post-COVID world.
That's why we've been investing so hard in our brands this season and why we'll do so again next year.
That's a point of view right now, not guidance.
We have a lot of work to do over the next 90 days and our thoughts could change.
We are still finalizing listings and programs with some major retailers for next year.
We also may take a second price increase in January, depending on what happens with commodities.
And of course, we need to get through the fall season to understand what retail inventory picture looks like as we prepare for next season.
So we'd expect to give you a much clearer picture when we talk again in November.
I said at the outset that it's tough to understand the business by just looking at the P&L.
And I hope it's clear that we're feeling bullish and it's in that vein, I want to briefly cover one more subject: Returning cash to shareholders.
As we look at the pullback in our equity price since early June, it's clear that the uncertainty about next year is creating a drag on our value.
I've said repeatedly that I think about this business with a long-term perspective, and I don't worry about quarter-to-quarter fluctuations.
I like our strategy.
I like how we're set up to execute, and I believe in this team.
And though I've hinted at the possibility of a special dividend multiple times this year, I'm a big fan of buying our shares at these prices.
I told Cory, I'm comfortable allocating upwards of $250 million to share repurchase in the months ahead under our existing authorization, so look for us to do that.
Before I turn things over to Cory, I just want to add one last bit of perspective.
I was walking around our campus in Ohio last week and came across a group of our R&D associates, plant scientists conducting field research.
Their enthusiasm for their work and their belief in what it could mean for our future was inspiring.
It reminded me of why I love working here.
There's an optimism here that I don't think you'll find at many other companies.
It's what carried us through the early days of COVID and has helped us drive the record results we've been posting every quarter since.
So we aren't worried about the difficult comps we continue to face, or the fact that we're likely to see a couple of negative quarters coming up.
And we aren't worried that our consumers will disappear when the world goes back to normal.
We believe in our vision here.
We believe in the mission we're executing against.
We believe our business does make the world a better place, and we believe the opportunities have never been more plentiful and that the future has never been brighter.
With that, let me turn things over to Cory for a brief overview of the numbers and to share some of his own early thoughts about next year.
I agree with Jim.
Q3 was another strong quarter.
From my new vantage point in the CFO seat, I've had the opportunity to watch our team navigate a pretty unusual marketplace.
They're doing a great job, leveraging the opportunities in front of us while managing and overcoming the challenges.
Companywide sales were up 8% in Q3 and we're now up 29% year to date.
We remain on pace to deliver our guidance on both the top line and bottom line.
Although we're likely to see even more gross margin rate pressure than we expected when we talked last, we're also seeing some unexpected pressure below the line from Bonnie.
I'll get to those items in a few minutes.
But overall, I want to spend my time providing a clear understanding of three things: what we've seen in the recent months; what we expect to see for the balance of the year; and how we expect some of the current trends to spill over into next year.
consumer business, where sales declined 4% in the quarter but are 19% higher year to date.
That leaves us right on track with the guidance I provided back in June when we said we expect a sales growth of 7% to 9%.
As Jim already said, consumer engagement has remained extremely solid throughout the season.
Retailer inventory levels have also increased over the past several months.
This is getting inventory levels back to where they needed to be.
You've already heard the details of what we've been seeing at Hawthorne, so there's no need to elaborate on Q3.
We remain confident in our growth outlook for the year on that business, too.
So in both major reporting segments, in order to maintain our sales guidance, you have to see a pretty dramatic change in the trajectory in Q4.
To get to our guidance means shipments in the U.S. consumer would decline by 40% to 50% year over year in Q4, and for our Hawthorne guidance to hold means a range of flat growth to plus 15%, which is obviously lower than what we've been seeing over the past year.
But those lower growth rates have nothing to do with the underlying strength of either business, so let me break that down for you.
consumer business grew 92% in Q4 and Hawthorne grew by 64%, so the comps are extremely high.
That's the first headwind.
The second is the shift in our fiscal calendar in 2021 that we talked about in Q1.
On a year-to-date basis, through Q3, we've had more days than a year ago.
While the shift had a negative impact of approximately $115 million on companywide sales in Q3, it has added approximately $50 million on a year-to-date basis, which is pretty evenly divided between U.S. consumer and Hawthorne.
Of course, that means we'll have fewer days in Q4 so that $50 million would come out of Q4 in order for the shift to be neutral on a full-year basis.
consumer, we're in the midst of shipping fall products and continue replenishing in other categories to keep the stores at the right level of inventory.
We've got good line of sight here, which gives us a high degree of confidence in our guidance, barring any unforeseen event.
In Hawthorne, the other major year-over-year headwind in Q4 is the 82% comp we're up against in California, which accounts for about 45% of our annual sales in the U.S.
We would expect the growth rate in California to be significantly lower this Q4 for a few reasons: First, obviously, is the difficult comp that we're up against.
Second is the fact that weather has had a strange impact on the outdoor growing season out West this year, which is an important part of that business.
Good weather early in the year allowed outdoor growers to get off to a good start, and many of them have already turned their crops for a second time.
For those who haven't, the heat and drought over the past handful of weeks have negatively impacted their business and the need for some of our products.
Third is simply a timing issue and the fact that we believe we saw a pull-forward of some sales into June.
When we reset guidance at the beginning of June, we said we plan to reinvest some of the upside in both U.S. consumer and Hawthorne to continue driving growth.
In Hawthorne, that meant some previously unplanned promotions in June, which contributed to a record performance for the month that Jim referenced.
So we expect to give up some of that year-to-date growth over the balance of the year.
But net-net, we still expect Hawthorne to finish the year with 40% to 50% growth on top of last year's 60% growth.
In fact, our sales after nine months this year are already 7% higher than all of 2020.
This business continues to thrive.
Let's move down the P&L and focus on gross margins, where we continue to feel the impact from inflation.
Clearly, this is an issue that all of you have been hearing about from other companies that you cover.
For Scotts Miracle-Gro, we've seen a steady increase in the commodities like urea, diesel, and resin that are easy for all of you to track yourselves.
Typically, we expect to see some relief in urea prices over the summer, but that's not happening as global demand has kept prices stubbornly elevated.
We're also now seeing pressure from inputs you can't track as easily, such as grass seed and sphagnum peat moss.
Grass seed has probably moved further than any of our commodities over the past year due to a supply and demand imbalance.
Most of that seed is harvested in the Pacific Northwest.
So the harsh weather conditions out there this summer will likely impact plant yields and certainly aren't going to do anything to moderate the cost pressure.
In the third quarter, these issues led to an adjusted gross margin rate of 30.8%, a decline of 530 basis points from a year ago.
I expect another significant decline in the fourth quarter, which would likely result in a full-year decline of approximately 275 basis points.
Through nine months, the adjusted gross margin rate is 280 points lower than last year.
Year to date, higher distribution costs impacted the gross margin rate by 260 basis points and higher material costs put another 130 points of pressure on that rate.
Those pressures were partially offset by more than 100 basis points of fixed-cost leverage.
However, of the 390 points of downward rate pressure, about 235 basis points were unplanned.
And while a significant price increase has gone live this week and will help for the final eight weeks of the year, there really have been a few other offsets to those higher costs all year long.
As we look ahead to next year, only about 25% of our costs are locked right now.
That's lower than normal for two reasons: First, it's been harder to lock in rates on some commodities, especially resin; and second, we've paused our hedging efforts for a few weeks with the hope of seeing some relief.
I'll reinforce Jim's point that our goal is to take enough pricing for fiscal '22 to offset the commodity pressure.
The pricing that just took effect in the U.S. consumer was a little more than 5%.
But if costs don't begin to moderate by the end of the calendar year, our plan is to take another round of pricing in January, and we've already communicated that intent to our retail partners.
Setting those issues aside, we still expect to make additional supply chain investments, and we will continue to see negative segment mix as Hawthorne will grow at a much higher rate than U.S. consumer.
So we're likely to see the overall rate decline again next year, though I can't give you a good range right now.
The team has done a great job over the past several months, offsetting the margin pressure by staying focused on reductions in SG&A.
In June, I said we expected full-year SG&A to be flat to slightly higher than 2020.
We've made some adjustments in the recent weeks, and I now expect the number to be flat to slightly down.
There are a couple of items below the operating line I want to explain as well, both of which are putting some downward pressure on EPS.
The first is the impact of Bonnie Plants.
If you recall, we originally said Bonnie would add $0.12 to $0.15 to earnings this year.
By the time we got to June, they had begun seeing lower profits than we expected because they had built too much inventory.
So when we reset the guidance in early June, our assumption was that Bonnie would have a neutral year-over-year impact on our adjusted EPS.
Since then, we saw further erosion of their results, which is now leading to about a $0.20 headwind for the full year.
While participation rates in edible gardening remain strong, Bonnie planned for a higher level of growth.
May and June came in light, in part because of multiple challenging weekends due to weather, which Jim explained earlier.
That meant they wound up growing more plants than they needed.
A critical difference between that business and our other two major segments is the inability to carry finished goods inventory.
If we build too much fertilizer inventory, we carry it into the next year, no big deal.
If Bonnie inventory doesn't sell and get stuck in a greenhouse, it gets destroyed, and there's no way to offset that cost.
So the gross margin hit will flow straight to their bottom line, and that obviously means the benefit we expected from equity income will be lower.
As you think about your models for next year, it's important to remember that we've always expected Bonnie to be a year-over-year headwind in fiscal '22.
It has nothing to do with the state of the business.
Remember, our results this year exclude Bonnie's first quarter due to the timing of when we struck our 50-50 JV with them.
Fiscal '22 will include Bonnie's first quarter, which is a lost quarter.
While the result of this year from Bonnie is frustrating, we remain absolutely committed to live goods, especially edible plants.
It remains critical to our strategy, and we are working with the Bonnie team on improving the planning process to better navigate the in-season volatility that naturally comes with this business.
There could be another pressure point on earnings per share from higher interest expense.
We currently are contemplating another bond offering to lock in longer-term bonds, probably with a 10- to 12-year maturity at roughly 4%.
If we decide to execute on that plan over the next few weeks, it could add a few more cents of headwind by the end of the year.
This will allow for flexibility and liquidity and lock in strong borrowing rates for the next decade.
Bringing things down to the bottom line, GAAP earnings were $4 per share in the quarter and $9.90 year to date, an increase of 12% and 47%, respectively.
On a non-GAAP adjusted basis, which is how we provide guidance, earnings per share in the quarter improved 5% to $3.98 per share and 39% to $10.04 per share year to date.
We believed a year ago that we could come out of COVID a better and stronger company and I share his conviction that this is exactly what happened.
In the U.S. consumer business, we've made investments in traditional marketing, direct-to-consumer, sales, supply chain, and R&D that leave us exceptionally well-positioned for the future.
And in Hawthorne, where I spent the previous six years, we have built competitive advantages that continue to propel that business forward too.
In addition, our low debt leverage, which was less than 2.2 times at the end of the quarter, gives us an enormous amount of financial flexibility to continue funding acquisitions and infrastructure improvement while also returning cash to shareholders.
And if we've taken the right steps for the business, that means we've taken the right steps for our shareholders.

user
q3 adjusted non-gaap earnings per share $3.98.
sees fy sales up 17 to 19 percent.
further strengthening of hawthorne gardening company portfolio with acquisition of hydrologic purification systems.
hydrologic will add about $20 million in annualized sales.

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