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Hain Celestial Exhibits Operational Strength: Hold the Stock?
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A leader in the natural food and personal care product categories, with an extensive portfolio of well-known brands and strong fundamentals, The Hain Celestial Group, Inc. (HAIN - Free Report) is poised for a surge as the economy gradually revives and the demand for organic food increases. Hain Celestial’s strategic investments, coupled with its continued efforts to contain costs, boost productivity and enhance margins, enable it to deliver encouraging results. Further, its long-term earnings per share growth rate stands at a healthy 10.3%.
A Look at HAIN’s Past Performance
During the third quarter of fiscal 2016, the company witnessed top- and bottom-line growth of 13% and 9%, respectively. Rise in consumption, innovative marketing and expanded distribution, as well as acquisitions are aiding the company's performance.
Although net sales advanced, we observe that the rate of sales growth of 13%, 8.1% and 8.9% recorded in the third, second and first quarters of fiscal 2016, respectively, has decelerated sharply from 20%, 18.9%, 30.2% and 32.2% recorded in the fourth, third, second and first quarters of fiscal 2015. With a gradual increase in the number of companies expanding their presence in the natural and organic food business, we believe that competition will be stiff and may hurt the company’s top line, going forward.
Management now anticipates net sales in the band of $2.946–$2.966 billion for fiscal 2016, up 9%–10% year over year, while earnings per share are envisioned in the range of $2.00–$2.04, representing 6%–9% year-over-year growth.
Hain Celestial, through strategic opportunities, constantly endeavors to expand its footprint in the organic and natural products category in order to offer “A Healthier Way of Life.” Acquisitions have played a vital role in Hain Celestial’s strategy of building market share. The company, in the recent past, acquired Orchard House Foods Limited ("Orchard House"), one of the leading providers of prepared fruit, juices, fruit desserts and other ingredients, with facilities in Gateshead and Corby in the U.K.
Hain Celestial had earlier acquired Tilda Limited, a renowned name in Basmati rice, and Rudi's Organic Bakery, one of the leading organic and gluten-free companies. It also purchased leading packaged grocery brands – Hartley's, Gale's Robertson's, Frank Cooper's and Sun-Pat – from Premier Foods plc. Additionally, it acquired Ella's Kitchen Group Limited that offers organic baby food products. Hain Celestial’s other acquisitions include those of leading plant-based food and beverage company, Mona Group, and Belvedere International, Inc. – provider of health and beauty care products, including the Live Clean brand with about 200 baby, body and hair care products.
Going forward, we believe that the company will remain focused on higher productivity and efficient pricing. Moreover, Hain Celestial has undertaken a number of initiatives to improve its performance and thus, positioned itself on the growth trajectory. The company’s Stock Keeping Unit (“SKU”) rationalization program has helped in eliminating SKUs which had lower sales volumes or weak margins.
Zacks Rank
Hain Celestial currently carries a Zacks Rank #3 (Hold). Investors may consider better-ranked stocks such as Post Holdings, Inc. (POST - Free Report) and The J. M. Smucker Company (SJM - Free Report) , both sporting a Zacks Rank #1 (Strong Buy), and ConAgra Foods, Inc. (CAG - Free Report) , carrying a Zacks Rank #2 (Buy).
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Hain Celestial Exhibits Operational Strength: Hold the Stock?
A leader in the natural food and personal care product categories, with an extensive portfolio of well-known brands and strong fundamentals, The Hain Celestial Group, Inc. (HAIN - Free Report) is poised for a surge as the economy gradually revives and the demand for organic food increases. Hain Celestial’s strategic investments, coupled with its continued efforts to contain costs, boost productivity and enhance margins, enable it to deliver encouraging results. Further, its long-term earnings per share growth rate stands at a healthy 10.3%.
A Look at HAIN’s Past Performance
During the third quarter of fiscal 2016, the company witnessed top- and bottom-line growth of 13% and 9%, respectively. Rise in consumption, innovative marketing and expanded distribution, as well as acquisitions are aiding the company's performance.
Although net sales advanced, we observe that the rate of sales growth of 13%, 8.1% and 8.9% recorded in the third, second and first quarters of fiscal 2016, respectively, has decelerated sharply from 20%, 18.9%, 30.2% and 32.2% recorded in the fourth, third, second and first quarters of fiscal 2015. With a gradual increase in the number of companies expanding their presence in the natural and organic food business, we believe that competition will be stiff and may hurt the company’s top line, going forward.
Management now anticipates net sales in the band of $2.946–$2.966 billion for fiscal 2016, up 9%–10% year over year, while earnings per share are envisioned in the range of $2.00–$2.04, representing 6%–9% year-over-year growth.
HAIN CELESTIAL Price and Consensus
HAIN CELESTIAL Price and Consensus | HAIN CELESTIAL Quote
Why Should You Hold on to the Stock?
Hain Celestial, through strategic opportunities, constantly endeavors to expand its footprint in the organic and natural products category in order to offer “A Healthier Way of Life.” Acquisitions have played a vital role in Hain Celestial’s strategy of building market share. The company, in the recent past, acquired Orchard House Foods Limited ("Orchard House"), one of the leading providers of prepared fruit, juices, fruit desserts and other ingredients, with facilities in Gateshead and Corby in the U.K.
Hain Celestial had earlier acquired Tilda Limited, a renowned name in Basmati rice, and Rudi's Organic Bakery, one of the leading organic and gluten-free companies. It also purchased leading packaged grocery brands – Hartley's, Gale's Robertson's, Frank Cooper's and Sun-Pat – from Premier Foods plc. Additionally, it acquired Ella's Kitchen Group Limited that offers organic baby food products. Hain Celestial’s other acquisitions include those of leading plant-based food and beverage company, Mona Group, and Belvedere International, Inc. – provider of health and beauty care products, including the Live Clean brand with about 200 baby, body and hair care products.
Going forward, we believe that the company will remain focused on higher productivity and efficient pricing. Moreover, Hain Celestial has undertaken a number of initiatives to improve its performance and thus, positioned itself on the growth trajectory. The company’s Stock Keeping Unit (“SKU”) rationalization program has helped in eliminating SKUs which had lower sales volumes or weak margins.
Zacks Rank
Hain Celestial currently carries a Zacks Rank #3 (Hold). Investors may consider better-ranked stocks such as Post Holdings, Inc. (POST - Free Report) and The J. M. Smucker Company (SJM - Free Report) , both sporting a Zacks Rank #1 (Strong Buy), and ConAgra Foods, Inc. (CAG - Free Report) , carrying a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>