Overview: Results were in line with expectations, but were soft excluding tariff refunds; the new CEO acknowledged execution and service shortcomings and will increase investment to restructure the business.

Data: Total revenue $1.2 billion, -4% YoY; EPS $1.35 (including $0.52 tariff refund); Water sales -6.5%.

Business: The new CEO emphasized returning to customers and simplifying the organization; new products such as Master Lock Elite and Moen SwivelControl have received positive feedback, with Security growing 3.8%. The company launched a $70 million cost-reduction program, moved brand marketing teams back into the business units, and is advancing the Fiberon strategic review.

Guidance: Full-year EPS guidance lowered to $3.22-$3.52 (including refunds), or $2.70-$3.00 excluding refunds; Q3 net sales expected at -1% to -2%, with EPS of $0.72-$0.76.

Risk: Management's tone was candid but confident in long-term growth; Water service issues and increased second-half investment will pressure margins — a clearly negative signal.