It has been about a month since the last earnings report for Hain Celestial (HAIN Quick QuoteHAIN - Free Report) . Shares have lost about 7.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Hain Celestial due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Hain Celestial’s Q1 Earnings Meet Mark, Sales Dip Y/Y

Hain Celestial 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.

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.

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.

The company 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.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

The consensus estimate has shifted -34.57% due to these changes.

VGM Scores

Currently, Hain Celestial has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Hain Celestial has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Hain Celestial is part of the Zacks Food - Miscellaneous industry. Over the past month, TreeHouse Foods (THS Quick QuoteTHS - Free Report) , a stock from the same industry, has gained 1.5%. The company reported its results for the quarter ended September 2022 more than a month ago.

TreeHouse reported revenues of $875 million in the last reported quarter, representing a year-over-year change of -20.5%. EPS of $0.18 for the same period compares with $0.46 a year ago.

TreeHouse is expected to post earnings of $0.88 per share for the current quarter, representing a year-over-year change of +700%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for TreeHouse. Also, the stock has a VGM Score of D.