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Strong sales performance led The Hain Celestial Group, Inc. (HAIN - Analyst Report) to come up with better-than-expected fourth-quarter fiscal 2013 results. The company’s adjusted quarterly earnings of 65 cents a share surpassed the Zacks Consensus Estimate of 62 cents and surged 38.3% year over year. On a reported basis, earnings increased 6% to 53 cents.

Management stated that a healthy industry trend, consumer demand and new products facilitated the company to come up with highest quarterly sales. The top line jumped 32.1% to $463.5 million and surpassed the Zacks Consensus Estimate of $452 million.

Net sales in the United States increased 17.6% year over year to $285.2 million during the quarter, while net sales in the United Kingdom more than doubled to $121.1 million. Operations in Canada and Europe, witnessed a 10.8% increase in net sales to $57.1 million.

The company registered increased consumption in core categories with robust contribution from Earth's Best, MaraNatha, Spectrum, The Greek Gods, Jason, Danival, Alba Botanica and Linda McCartney. Hain Celestial also experienced solid sales across recently acquired brands including Hartley's, BluePrint, Sun-Pat and Ella's Kitchen.

Adjusted gross profit surged 33.9% year over year to $125.1 million during the quarter, whereas adjusted gross margin expanded 40 basis points to 27%, reflecting increased sales and improved product mix. Adjusted operating income jumped 37.2% to $49.7 million in the quarter, while adjusted operating margin expanded approximately 40 basis points to 10.7%.

Other Financial Details

This Zacks Rank #3 (Hold) company ended the quarter with cash and cash equivalents of $41.3 million, total long-term debt of $665.9 million and shareholders’ equity of $1,201.6 million, reflecting a debt-to-capitalization of 35.7%.  Cash flow from operating activities for the trailing 12 months was $121 million and capital expenditures were $72.9 million, resulting in free cash flow of $48.1 million.

Outlook

We believe that the company will sustain the strong momentum across entire business segments as it remains well positioned to capitalize on the growing global demand for organic products.

Alongside, Hain Celestial anticipates sales in the range of $2,025 million to $2,050 million in fiscal 2014, reflecting a year-over-year increase of 17%. Earnings are projected in the range of $2.95 to $3.05 per share, up 16% to 20% year over year.

Other Stocks to Consider

Until any further upward revision in the Zacks Rank of Hain Celestial, other stocks that look promising in the food industry include Pinnacle Foods Inc. (PF - Snapshot Report) that carries a Zacks Rank #1 (Strong Buy).  The Chefs' Warehouse, Inc. (CHEF - Snapshot Report) and Kraft Foods Group, Inc. (KRFT - Analyst Report), both carrying a Zacks Rank #2 (Buy) are also worth considering.

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