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Hain Celestial (HAIN) Aims to Boost Brands & Build Efficiency

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Well-chalked transformational strategies coupled with efforts to boost portfolio strength have been aiding The Hain Celestial Group, Inc. (HAIN - Free Report) . This renowned natural and organic food products company is on track with SKU rationalization efforts and enhancing cost efficiency. Shares of the company have gained 22.8% in a year compared with the industry’s rise of 11.6%. Let’s take a closer look at the aspects impacting the performance of this Zacks Rank #3 (Hold) stock.

Prudent Efforts to Boost Portfolio Strength

Hain Celestial has been quite proactive when it comes to adapting to consumers’ changing tastes and preferences. The company is resorting to innovations to boost brand-lines to meet consumers’ needs and tap demand conditions. It has been focusing on consumers’ growing demand for healthier food options, owing to rising health consciousness amid the pandemic.

The company recently announced a range of innovative products across Celestial Seasonings and Sensible Portions. It also launched a variety of personal care products under the JASON line. These products are aimed at providing consumers a healthier life. Such product introductions are part of the company’s "Get Bigger" brands growth strategy. During third-quarter fiscal 2021, the consumption of Get Bigger brands was up nearly 54%, while shipments were up 8%. Strategic acquisitions have helped the company boost market share across key markets. It plans to keep looking for prudent buyout prospects, especially in core categories such as snacks.

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Measures to Enhance Efficiency

Hain Celestial is progressing well with its transformation strategy to deliver sustainable profits. The strategy is aimed at simplifying portfolio, identifying additional areas of productivity savings, enhancing margins, reviving top-line growth and improving cash flow. By exiting smaller and non-strategic brands, the company is able to reduce supply-chain complexity and redeploy resources on strategic growth opportunities.

The company’s SKU rationalization program has eliminated SKUs based on lower sales volume or weak margins. We note that gains from SKU rationalization along with supply-chain productivity initiatives and higher product mix supported growth in adjusted gross margin during the third quarter. The company is boosting automation capabilities in plants to lower costs, optimize infrastructure and pricing as well as redesign engineered products. It is also executing its simplified pricing model.

Final Thoughts

Hain Celestial has undertaken a number of initiatives to improve performance and retain business growth momentum. The aforementioned moves to boost portfolio strength and operating efficiency are laudable. Such efforts are likely to help it maintain strong footing in the food industry.

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Darling Ingredients Inc. (DAR - Free Report) , flaunting a Zacks Rank #1 (Strong Buy), delivered an earnings surprise of 29.8% in the last four quarters, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

Mondelez International, Inc. (MDLZ - Free Report) , with a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 8.6%.

Medifast, Inc. (MED - Free Report) , also with a Zacks Rank #2, delivered an earnings surprise of 12.7% in the last four quarters, on average.

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