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Hain Celestial (HAIN) Q1 Earnings Meet Mark, Sales Dip Y/Y
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The Hain Celestial Group, Inc. (HAIN - Free Report) posted first-quarter fiscal 2023 results, wherein sales lagged the Zacks Consensus Estimate while earnings met the same. Both the top and the bottom line fell from the year-ago fiscal quarter’s reported figure. However, management reaffirmed its view for fiscal 2023.
Shares of this manufacturer, marketer, distributor and seller of organic and natural products lost 15.6% in the past three months, wider than the industry’s 0.9% dip.
Quarter in Detail
Hain Celestial posted adjusted earnings of 10 cents a share, which matched the Zacks Consensus Estimate. However, the bottom line significantly plunged from 25 cents reported in the prior-year fiscal quarter.
Net sales of $439.4 million missed the consensus mark of $447 million and dipped 3% from the year-ago fiscal quarter’s reported figure. After adjusting for foreign exchange, acquisitions, divestitures and discontinued brands, net sales slipped 1% from the year-ago fiscal quarter’s reported figure.
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Adjusted gross profit of $94.4 million fell 13.2% from the prior-year quarter’s tally, while adjusted gross margin contracted 240 basis points (bps) from the year-ago fiscal quarter’s reported figureto 21.5%.
Adjusted operating income was $20.4 million in the reported quarter, down from $34.3 million in the year-ago fiscal quarter. Also, adjusted operating margin contracted to 4.6% from 7.5% recorded in the year-earlier fiscal quarter.
Adjusted EBITDA on a constant-currency basis dropped 18.4% from the year-ago fiscal quarter’s reported figureto $38.6 million, while adjusted EBITDA margin fell 210 bps to 8.3%.
Segmental Results
Net sales in the North America segment increased 9% from the year-ago fiscal quarter’s reported figureto $288.4 million. After adjusting currency movements, acquisitions, divestitures and discontinued brands, net sales rose 3% on higher sales in the snacks, yogurt, baby and other categories in the United States, partly offset by lower sales in personal care products and certain supply shortages across many brands.
Segment-adjusted operating income jumped 21% to $24.8 million, mainly aided by higher sales on pricing increases and productivity, offset by inflation and reduced sales in the Canada operating segment. The segment’s adjusted EBITDA on a constant currency basis amounted to $30.9 million, up nearly 28%. Adjusted EBITDA margin expanded 160 bps to 10.7%.
International net sales declined 20% from the year-ago fiscal quarter’s reported figure to $151 million. Upon adjusting for foreign currency fluctuations, net sales dropped 7% due to softness in plant-based categories and the loss of a huge non-dairy co-manufacturing customer in Europe.
Segment-adjusted operating income tumbled 68% to $8 million due to lower gross profit and sales coupled with elevated energy and supply-chain costs from the year-ago fiscal quarter’s reported figure. Adjusted EBITDA on a constant currency basis was $17.5 million, down 46% from the year-ago fiscal quarter’s reported figure. Adjusted EBITDA margin contracted 720 bps to 9.9%.
Other Financials
Hain Celestial ended the reported quarter with cash and cash equivalents of $51.8 million, long-term debt (excluding the current portion) of $891.1 million and total shareholders’ equity of $1,041.4 million.
This presently Zacks Rank #5 (Strong Sell) player reported cash used in operating activities of $5.1 million and a negative operating free cash flow of $12.3 million during the first quarter of fiscal 2023.
Outlook
Hain Celestial anticipates continued volatility, particularly in Europe. However, management reiterated guidance for 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 fiscal period’s reading.
HAIN expects growth toward the second half of the year, backed by the momentum in North America, solid productivity, cost-containment efforts, an enhanced supply-chain performance, an uncertain but improving retail landscape in the United Kingdom and new contracts on its non-dairy beverage business in Europe. Also, HAIN expects price increases in fiscal 2023, most of which are accepted by retail partners to mitigate the anticipated inflation in the mid-teens from the prior-year fiscal period’s level.
The Zacks Consensus Estimate for Chef Warehouse’s current financial-year sales suggests growth of 40.7% from the year-ago reported number. CHEF has a trailing four-quarter earnings surprise of 355.9%, on average.
MGP Ingredients produces and markets ingredients and distillery products. The stock currently sports 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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Hain Celestial (HAIN) Q1 Earnings Meet Mark, Sales Dip Y/Y
The Hain Celestial Group, Inc. (HAIN - Free Report) posted first-quarter fiscal 2023 results, wherein sales lagged the Zacks Consensus Estimate while earnings met the same. Both the top and the bottom line fell from the year-ago fiscal quarter’s reported figure. However, management reaffirmed its view for fiscal 2023.
Shares of this manufacturer, marketer, distributor and seller of organic and natural products lost 15.6% in the past three months, wider than the industry’s 0.9% dip.
Quarter in Detail
Hain Celestial posted adjusted earnings of 10 cents a share, which matched the Zacks Consensus Estimate. However, the bottom line significantly plunged from 25 cents reported in the prior-year fiscal quarter.
Net sales of $439.4 million missed the consensus mark of $447 million and dipped 3% from the year-ago fiscal quarter’s reported figure. After adjusting for foreign exchange, acquisitions, divestitures and discontinued brands, net sales slipped 1% from the year-ago fiscal quarter’s reported figure.
Image Source: Zacks Investment Research
Adjusted gross profit of $94.4 million fell 13.2% from the prior-year quarter’s tally, while adjusted gross margin contracted 240 basis points (bps) from the year-ago fiscal quarter’s reported figureto 21.5%.
Adjusted operating income was $20.4 million in the reported quarter, down from $34.3 million in the year-ago fiscal quarter. Also, adjusted operating margin contracted to 4.6% from 7.5% recorded in the year-earlier fiscal quarter.
Adjusted EBITDA on a constant-currency basis dropped 18.4% from the year-ago fiscal quarter’s reported figureto $38.6 million, while adjusted EBITDA margin fell 210 bps to 8.3%.
Segmental Results
Net sales in the North America segment increased 9% from the year-ago fiscal quarter’s reported figureto $288.4 million. After adjusting currency movements, acquisitions, divestitures and discontinued brands, net sales rose 3% on higher sales in the snacks, yogurt, baby and other categories in the United States, partly offset by lower sales in personal care products and certain supply shortages across many brands.
Segment-adjusted operating income jumped 21% to $24.8 million, mainly aided by higher sales on pricing increases and productivity, offset by inflation and reduced sales in the Canada operating segment. The segment’s adjusted EBITDA on a constant currency basis amounted to $30.9 million, up nearly 28%. Adjusted EBITDA margin expanded 160 bps to 10.7%.
International net sales declined 20% from the year-ago fiscal quarter’s reported figure to $151 million. Upon adjusting for foreign currency fluctuations, net sales dropped 7% due to softness in plant-based categories and the loss of a huge non-dairy co-manufacturing customer in Europe.
Segment-adjusted operating income tumbled 68% to $8 million due to lower gross profit and sales coupled with elevated energy and supply-chain costs from the year-ago fiscal quarter’s reported figure. Adjusted EBITDA on a constant currency basis was $17.5 million, down 46% from the year-ago fiscal quarter’s reported figure. Adjusted EBITDA margin contracted 720 bps to 9.9%.
Other Financials
Hain Celestial ended the reported quarter with cash and cash equivalents of $51.8 million, long-term debt (excluding the current portion) of $891.1 million and total shareholders’ equity of $1,041.4 million.
This presently Zacks Rank #5 (Strong Sell) player reported cash used in operating activities of $5.1 million and a negative operating free cash flow of $12.3 million during the first quarter of fiscal 2023.
Outlook
Hain Celestial anticipates continued volatility, particularly in Europe. However, management reiterated guidance for 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 fiscal period’s reading.
HAIN expects growth toward the second half of the year, backed by the momentum in North America, solid productivity, cost-containment efforts, an enhanced supply-chain performance, an uncertain but improving retail landscape in the United Kingdom and new contracts on its non-dairy beverage business in Europe. Also, HAIN expects price increases in fiscal 2023, most of which are accepted by retail partners to mitigate the anticipated inflation in the mid-teens from the prior-year fiscal period’s level.
Don’t Miss These Solid Food Stocks
Some better-ranked stocks are The Chef's Warehouse (CHEF - Free Report) , MGP Ingredients (MGPI - Free Report) and United Natural Foods (UNFI - Free Report) .
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.
The Zacks Consensus Estimate for Chef Warehouse’s current financial-year sales suggests growth of 40.7% from the year-ago reported number. CHEF has a trailing four-quarter earnings surprise of 355.9%, on average.
MGP Ingredients produces and markets ingredients and distillery products. The stock currently sports 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.