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Hain Celestial (HAIN) Q1 Earnings Beat Estimates, Decline Y/Y
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The Hain Celestial Group, Inc. (HAIN - Free Report) posted first-quarter fiscal 2024 results, wherein the bottom line beat the Zacks Consensus Estimate, but the top line missed the same. Both metrics fell from the year-ago fiscal quarter’s reported figures.
Shares of this manufacturer, marketer, distributor and seller of organic and natural products have increased 2.8% in the past three months against the industry’s 11.5% decline.
Image Source: Zacks Investment Research
Quarter in Detail
HAIN, currently carrying a Zacks Rank #4 (Sell), posted an adjusted loss of 4 cents per share, narrower than the Zacks Consensus Estimate of a loss of 6 cents. The bottom line declined from earnings of 10 cents per share reported in the prior-year fiscal quarter.
Net sales of $425 million missed the consensus estimate of $433 million. The top line dipped 3.3% from the year-ago fiscal quarter’s reported figure. After adjusting for foreign exchange, acquisitions, divestitures and discontinued brands, adjusted net sales slipped 2.9% from the year-ago fiscal quarter’s reported figure.
Adjusted gross profit of $87.3 million decreased 7.5% from the prior-year quarter’s figure, while the adjusted gross margin contracted 95 basis points (bps) from the year-ago fiscal quarter’s reported figure to 20.5%. We had expected the adjusted gross margin to contract by 240 bps to 19.1%.
SG&A expenses increased 2.9% to $77.2 million. The metric, as a percentage of net sales, increased 110 bps year over year to 18.2%. We had expected SG&A expenses, as a percentage of net sales, to increase by 20 bps to 17.3%.
Adjusted operating income was $9.7 million in the reported quarter, down 52.5% from the year-ago fiscal quarter. Adjusted EBITDA dropped 33.1% from the year-ago fiscal quarter’s reported figure to $24.1 million, while adjusted EBITDA margin decreased 250 bps to 5.7%. We had expected an adjusted EBITDA margin contraction of 370 bps to 4.5%.
The Hain Celestial Group, Inc. Price, Consensus and EPS Surprise
Net sales in the North America segment tumbled 9.8% from the year-ago fiscal quarter’s reported figure to $260.1 million. After adjusting currency movements, divestitures and discontinued brands, adjusted net sales fell 9.3%. The decline was due to lower sales in baby & kids due to industry-wide challenges in organic formula supply.
Softness in personal care owing to the timing shift of a sun care program and in snacks on the optimization of promotional activity for Terra hurt its performance as well. We expected North America’s sales to fall 7.4% to $267.1 million in the reported quarter.
The segment’s adjusted EBITDA amounted to $18.7 million, down 39.2% on a year-over-year basis. Adjusted EBITDA margin in the quarter decreased 350 bps to 7.2%.
The International segment’s net sales grew 9.3% from the year-ago fiscal quarter’s reported figure to $165 million. The sales growth was primarily driven by strength in meal preparation and beverages businesses. We had anticipated the segment’s sales to rise 14% to $172 million in the reported quarter.
Its adjusted EBITDA came in at $17.4 million, up 16.7% from the year-ago fiscal quarter’s reported figure. Adjusted EBITDA margin in the quarter expanded 70 bps to 10.6%.
Other Financials
Hain Celestial ended the reported quarter with cash and cash equivalents of $38.3 million, long-term debt (excluding the current portion) of $807.4 million and total shareholders’ equity of $981 million.
The company reported cash provided by operating activities of $14 million and an operating free cash flow of $7.1 million during the first three months of fiscal 2024.
Guidance
HAIN reaffirmed its financial outlook for fiscal 2024. For the fiscal year, adjusted net sales are likely to increase by 2-4% year over year and adjusted EBITDA is expected to be in the band of $155-$165 million. Free cash flow is anticipated to be between $50 million and $55 million.
The Zacks Consensus Estimate for Lamb Weston’s current financial-year sales and earnings per share suggests growth of 28.3% and 24.8%, respectively, from the corresponding year-ago reported figures. LW has a trailing four-quarter earnings surprise of 46.2%, on average.
MGP Ingredients, which produces and markets ingredients and distillery products, currently carries a Zacks Rank #2 (Buy). MGPI has a trailing four-quarter earnings surprise of 18%, on average.
The Zacks Consensus Estimate for MGP Ingredients’ current financial-year sales and earnings per share suggests growth of 5.8% and 13.8%, respectively, from the corresponding year-ago reported figures.
Flowers Foods, a packaged bakery food products company, currently carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 7.6%, on average.
The Zacks Consensus Estimate for Flowers Foods’ current fiscal-year sales suggests growth of 6.7% from the year-ago reported figure.
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Hain Celestial (HAIN) Q1 Earnings Beat Estimates, Decline Y/Y
The Hain Celestial Group, Inc. (HAIN - Free Report) posted first-quarter fiscal 2024 results, wherein the bottom line beat the Zacks Consensus Estimate, but the top line missed the same. Both metrics fell from the year-ago fiscal quarter’s reported figures.
Shares of this manufacturer, marketer, distributor and seller of organic and natural products have increased 2.8% in the past three months against the industry’s 11.5% decline.
Image Source: Zacks Investment Research
Quarter in Detail
HAIN, currently carrying a Zacks Rank #4 (Sell), posted an adjusted loss of 4 cents per share, narrower than the Zacks Consensus Estimate of a loss of 6 cents. The bottom line declined from earnings of 10 cents per share reported in the prior-year fiscal quarter.
Net sales of $425 million missed the consensus estimate of $433 million. The top line dipped 3.3% from the year-ago fiscal quarter’s reported figure. After adjusting for foreign exchange, acquisitions, divestitures and discontinued brands, adjusted net sales slipped 2.9% from the year-ago fiscal quarter’s reported figure.
Adjusted gross profit of $87.3 million decreased 7.5% from the prior-year quarter’s figure, while the adjusted gross margin contracted 95 basis points (bps) from the year-ago fiscal quarter’s reported figure to 20.5%. We had expected the adjusted gross margin to contract by 240 bps to 19.1%.
SG&A expenses increased 2.9% to $77.2 million. The metric, as a percentage of net sales, increased 110 bps year over year to 18.2%. We had expected SG&A expenses, as a percentage of net sales, to increase by 20 bps to 17.3%.
Adjusted operating income was $9.7 million in the reported quarter, down 52.5% from the year-ago fiscal quarter. Adjusted EBITDA dropped 33.1% from the year-ago fiscal quarter’s reported figure to $24.1 million, while adjusted EBITDA margin decreased 250 bps to 5.7%. We had expected an adjusted EBITDA margin contraction of 370 bps to 4.5%.
The Hain Celestial Group, Inc. Price, Consensus and EPS Surprise
The Hain Celestial Group, Inc. price-consensus-eps-surprise-chart | The Hain Celestial Group, Inc. Quote
Segmental Results
Net sales in the North America segment tumbled 9.8% from the year-ago fiscal quarter’s reported figure to $260.1 million. After adjusting currency movements, divestitures and discontinued brands, adjusted net sales fell 9.3%. The decline was due to lower sales in baby & kids due to industry-wide challenges in organic formula supply.
Softness in personal care owing to the timing shift of a sun care program and in snacks on the optimization of promotional activity for Terra hurt its performance as well. We expected North America’s sales to fall 7.4% to $267.1 million in the reported quarter.
The segment’s adjusted EBITDA amounted to $18.7 million, down 39.2% on a year-over-year basis. Adjusted EBITDA margin in the quarter decreased 350 bps to 7.2%.
The International segment’s net sales grew 9.3% from the year-ago fiscal quarter’s reported figure to $165 million. The sales growth was primarily driven by strength in meal preparation and beverages businesses. We had anticipated the segment’s sales to rise 14% to $172 million in the reported quarter.
Its adjusted EBITDA came in at $17.4 million, up 16.7% from the year-ago fiscal quarter’s reported figure. Adjusted EBITDA margin in the quarter expanded 70 bps to 10.6%.
Other Financials
Hain Celestial ended the reported quarter with cash and cash equivalents of $38.3 million, long-term debt (excluding the current portion) of $807.4 million and total shareholders’ equity of $981 million.
The company reported cash provided by operating activities of $14 million and an operating free cash flow of $7.1 million during the first three months of fiscal 2024.
Guidance
HAIN reaffirmed its financial outlook for fiscal 2024. For the fiscal year, adjusted net sales are likely to increase by 2-4% year over year and adjusted EBITDA is expected to be in the band of $155-$165 million. Free cash flow is anticipated to be between $50 million and $55 million.
Key Picks
Some better-ranked stocks from the same space are Lamb Weston (LW - Free Report) , MGP Ingredients (MGPI - Free Report) and Flowers Foods (FLO - Free Report) .
Lamb Weston, a global manufacturer and distributor of value-added frozen potato products, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Lamb Weston’s current financial-year sales and earnings per share suggests growth of 28.3% and 24.8%, respectively, from the corresponding year-ago reported figures. LW has a trailing four-quarter earnings surprise of 46.2%, on average.
MGP Ingredients, which produces and markets ingredients and distillery products, currently carries a Zacks Rank #2 (Buy). MGPI has a trailing four-quarter earnings surprise of 18%, on average.
The Zacks Consensus Estimate for MGP Ingredients’ current financial-year sales and earnings per share suggests growth of 5.8% and 13.8%, respectively, from the corresponding year-ago reported figures.
Flowers Foods, a packaged bakery food products company, currently carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 7.6%, on average.
The Zacks Consensus Estimate for Flowers Foods’ current fiscal-year sales suggests growth of 6.7% from the year-ago reported figure.