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Hain Celestial (HAIN) to Report Q3 Earnings: What's in Store?

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The Hain Celestial Group, Inc. (HAIN - Free Report) is likely to see bottom-line growth when it reports third-quarter fiscal 2021 numbers on May 6, before market open. Although the Zacks Consensus Estimate for third-quarter earnings has been stable at 38 cents in the past 30 days, the same suggests growth of more than 35% from 28 cents delivered in the year-ago quarter.

In the last reported quarter, the company delivered an earnings surprise of 21.4%. Notably, this organic- and natural-products company has a trailing four-quarter earnings surprise of 26.7%, on average.

However, the consensus estimate for quarterly revenues stands at $504.2 million, which indicates a decrease of almost 9% from the year-ago quarter.

Key Factors to Note

Hain Celestial’s third-quarter performance has likely benefited from transformation strategy. The strategy is aimed at simplifying portfolio, identifying additional areas of productivity, driving top-line growth and improving cash flow. In addition, supply-chain productivity initiatives and higher product mix from rationalization efforts have been driving performance. Moreover, product innovation and launches along with marketing and assortment optimization efforts are acting as tailwinds. Its cost-savings plans also bode well. These strengths have most likely driven the bottom-line performance in the quarter under review.

Management, during its last earnings call on Feb 9, anticipated solid gross margin and EBITDA margin expansion with adjusted EBITDA rising close to 10% for the fiscal third quarter. With respect to the second half, management had assumed foreign exchange translation to be a tailwind compared to the year-ago period and cost of goods inflation of nearly 2% that will be more than offset by productivity efforts. It projected a decline in inventory levels throughout second-half fiscal 2021.

Encouragingly, the company’s North America and the International segments are performing well. In the North America unit, the Get Bigger Brands have been doing well. Strength in non-dairy brands like Joya and Natumi in Europe, and Ella's UK business has been aiding the International segment.

However, in its last earnings call, management cited that the third-quarter fiscal 2021 top-line results are likely to reflect the adverse impact of divestitures, including fruit business; the Brexit volume; and the lapping of a Personal Care club program that was likely to occur late this year. In addition, the company has been making higher investment in marketing to support innovation and launches, and e-commerce.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Hain Celestial this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The Hain Celestial Group, Inc. Price and EPS Surprise

 

The Hain Celestial Group, Inc. Price and EPS Surprise

The Hain Celestial Group, Inc. price-eps-surprise | The Hain Celestial Group, Inc. Quote

Although Hain Celestial has a Zacks Rank #3, its Earnings ESP of -4.43% makes surprise prediction difficult.

Stocks Poised to Beat Earnings Estimates

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Tyson Foods (TSN - Free Report) currently has an Earnings ESP of +16.03% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Energizer (ENR - Free Report) has an Earnings ESP of +4.24% and a Zacks Rank #3.

Nomad Foods (NOMD - Free Report) has an Earnings ESP of +0.73% and a Zacks Rank #3.

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