HAIN Delivers Strong 2Q

Strong sales and productivity savings facilitated The Hain Celestial Group Inc. (HAIN - Analyst Report) to post second-quarter 2013 adjusted earnings of 72 cents a share, up 35.8% from the prior-year quarter earnings of 53 cents. Moreover, earnings of this Zacks Rank #2 (Buy) company came ahead of the Zacks Consensus Estimate of 69 cents.

Including one-time items, earnings came in at 67 cents compared with 44 cents a share earned in the year-ago quarter.

Revenues

Net sales from continuing operations rose 24.8% year over year to $455.3 million, reflecting rise in demand for natural organic products. However, reported revenues missed the Zacks Consensus Estimate of $474 million.

Net sales in United States increased 9.4% year over year on a comparable basis to $280.4 million during the quarter, while net sales at United Kingdom more than doubled to $120.2 million. Rest of the World witnessed an 11.1% increase in net sales to $54.7 million.

The company registered elevated consumption in core categories with robust contribution from Garden of Eatin, MaraNatha, Celestial Seasonings, Earth's Best, Imagine, The Greek Gods, Lima, Alba Botanica, Danival and Linda McCartney. Hain Celestial also experienced solid sales across recently-acquired brands.

Margins

Gross profit ascended 25% year over year to $130.8 million during the quarter. However, gross margin remained flat at 28.7% as rise in sales were offset by increased input and commodity costs.

Adjusted operating profit jumped 33.8% to $55 million in the quarter, while adjusted operating margin expanded approximately 80 basis points to 12.1%, indicating productivity savings and improved sales mix.

Other Financial Details

The company ended the quarter with cash and cash equivalents of $42.6 million, long-term debt of $635.1 million and shareholders’ equity of $1,105.5 million.

Guidance

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

Alongside, the company anticipates sales to be in the range of $1,740 million – $1,755 million in fiscal 2013, reflecting an increase of 26% to 27%. Earnings are expected to be in the range of $2.40 – $2.47 a share, up 29% – 33% year over year.

Other Stocks to Consider

Besides Hain, other stocks in the processed & packaged goods industry worth considering include, Flowers Foods, Inc. (FLO - Snapshot Report), Ingredion Incorporated (INGR - Snapshot Report) and Inventure Foods, Inc. (SNAK - Snapshot Report) all holding a Zacks Rank #1 (Strong Buy).