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Hain Celestial (HAIN) Q4 Earnings Miss Mark, Sales Rise Y/Y

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The Hain Celestial Group, Inc. (HAIN - Free Report) posted soft fourth-quarter fiscal 2022 results, wherein both sales and earnings lagged the Zacks Consensus Estimate. The bottom line also fell year over year. Management cited that the fiscal fourth quarter witnessed unprecedented volatility and several challenges, mainly in Europe.

Shares of this manufacturer, marketer, distributor and seller of organic and natural products fell 3.2% during the trading session on Aug 24. Moreover, this presently Zacks Rank #5 (Strong Sell) stock has lost 32.1% in the past six months against the industry’s 0.4% rise.

Quarter in Detail

Hain Celestial posted adjusted earnings of 8 cents a share, which lagged the Zacks Consensus Estimate of 27 cents. The bottom line also plunged 79.5% from 39 cents reported in the prior-year quarter.

Net sales came in at $457 million, missing the consensus mark of $465 million. However, the metric rose 1.4% year over year. After adjusting for foreign exchange, acquisitions, divestitures and discontinued brands, net sales dipped 0.6% year over year.

Adjusted gross profit amounted to $88.8 million, down 23.4% from the prior-year quarter’s tally, while adjusted gross margin contracted 630 basis points (bps) year over year to 19.4%.

Adjusted operating income was $19.3 million in the reported quarter, significantly down from $53 million in the year-ago quarter.

Adjusted EBITDA dropped 48% year over year to $35.4 million, while adjusted EBITDA margin fell 740 bps to 7.7%.

Segmental Results

Net sales in the North America segment increased 17% year over year to $296.9 million. On adjusting for currency movements, acquisitions, divestitures and discontinued brands, net sales rose 6% on higher sales in the snacks, baby and personal care categories.

Segment-adjusted operating income tumbled 26% to $22 million, mainly affected by high inflation and supply-chain disruptions. The segment’s adjusted EBITDA amounted to $27.5 million, down nearly 21%. Adjusted EBITDA margin contracted 450 bps to 9.3%.

International net sales declined 19% year over year to $160.2 million. Upon adjusting for foreign currency fluctuations and divestitures, net sales dropped 10% year over year due to the lower total store sales as well as weakness in the plant-based protein and beverage categories. Foreign exchange hurt sales by 930 bps, while divestitures were immaterial to the reported quarter.

Segment-adjusted operating income tumbled 68% to $9.9 million due to lower gross profit and sales coupled with elevated energy and supply-chain costs year over year. Adjusted EBITDA was $16.9 million, down 56% year over year. Adjusted EBITDA margin contracted 890 bps to 10.5%.

Other Financials

Hain Celestial ended the reported quarter with cash and cash equivalents of $65.5 million, long-term debt (excluding the current portion) of $880.9 million and total shareholders’ equity of $1,083.2 million.

Cash provided by operating activities from continuing operations was $80.2 million and an operating free cash flow from continuing operations was $40.3 million in fiscal 2022.

In fiscal 2022, HAIN repurchased 10.6 million shares at an average price of $38.48 a share or worth $408.9 million, excluding commissions. As of Jun 30, 2022, HAIN had $173.5 million available under its buyback authorization.


Management projects both adjusted net sales and adjusted EBITDA on a constant currency basis in the range of a decline of 1% to a rise of 4% from the year-ago reported figure.

This will be backed by the momentum in North America, a solid productivity pipeline and a volatile but an improving retail landscape in the United Kingdom with challenges cropping up in Europe. Also, HAIN expects price increases in 2023, most of which are accepted by retail partners to mitigate the estimated mid-teens’ inflation from the prior-year level.

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Chef’s Warehouse, a distributor of specialty food products in the United States, currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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MGP Ingredients, which produces and markets ingredients and distillery products, currently carries a Zacks Rank of 1. MGPI has a trailing four-quarter earnings surprise of 76.8%, on average.

The Zacks Consensus Estimate for MGP Ingredients’ current financial-year sales and earnings per share suggests growth of 22.4% and 10.4%, respectively, from the corresponding year-ago reported figures.

United Natural Foods distributes natural, organic, specialty produce, and conventional grocery and non-food products. UNFI currently has a Zacks Rank #2 (Buy).

The Zacks Consensus Estimate for UNFI’s current financial-year sales suggests 7.6% growth from the year-ago period’s reported figure. United Natural Foods has a trailing four-quarter earnings surprise of 29.9%, on average.

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