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Hain Celestial (HAIN) Poised on Reimagined Strategy, E-Commerce
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The Hain Celestial Group, Inc. (HAIN - Free Report) has been focused on fueling its momentum in the near future. The company’s progress in brand building, channel expansion and innovation underscores its commitment to long-term growth. This is crucial for adapting to the evolving market trends and consumer preferences.
HAIN witnessed notable growth in specific segments like better-for-you snacks, baby & kids products, beverages, and meal prep items in the first quarter of fiscal 2024. This, in turn, reflects its alignment with consumer trends, alongside highlighting its effective market research and product development strategies.
Growth in the international segment, particularly through the private label business and strong brands, demonstrates the company's global market appeal and adaptability. The segment’s net sales increased 9.3% in the fiscal first quarter, driven by strength in its meal preparation and beverages businesses.
Image Source: Zacks Investment Research
E-commerce Business Bodes Well
E-commerce represents a growing area for the company, accounting for nearly 10% of the total company sales in the fiscal first quarter. This indicates a significant shift in the company’s sales strategy, focusing more on online channels. The company has established a dedicated team to drive omni-channel and e-commerce initiatives. This strategic move is aimed at providing greater focus and support for expanding into this channel, which is seen as margin accretive.
Efforts are being made to make brands more accessible to consumers, not only away from home but also online. This approach is aimed at increasing brand reach and visibility, suggesting an integrated strategy for physical and digital presence.
Specifically, the company's better-for-you personal care business grew 6% year over year in the e-commerce channel in the fiscal first quarter, indicating a positive trend in this specific product category within the digital marketplace.
Reimagined Strategy - Another Key Factor
The company’s "Hain Reimagined" is a transformative approach to pivot the business toward profitable growth. This strategy focuses on five core consumer-centric platforms (snacks, baby & kids, beverages, meal prep, and personal care) and targets five key markets (the United States, Canada, the U.K., Ireland, and Europe).
It aims to enhance brand strength, share gains and channel expansion, particularly in its core segments. The expansion into margin-accretive channels, bolstering away-from-home capabilities, and implementing a fuel program comprising revenue growth management, working capital management and operational efficiency are integral to this strategy.
This program is expected to result in a significant increase in the adjusted gross margin, with an expansion of 400-500 basis points, and is projected to generate a cumulative free cash flow of $400 million by fiscal 2027. The company's long-term vision includes seeing an organic net sales compound annual growth rate (CAGR) of more than 3%, an adjusted EBITDA CAGR of above 10%, an adjusted EBITDA margin exceeding 12%, and maintaining a net debt leverage ratio between 2-3 times by fiscal 2027.
Wrapping Up
The company is experiencing challenges in its North America segment. In the fiscal first quarter, net sales from this segment saw a year-over-year decrease of 9.8%, amounting to $260.1 million. This downturn was largely due to reduced sales in the baby & kids business, impacted by widespread supply issues in the organic baby formula sector.
However, the company's balanced approach to business expansion and management through its growth and operational efficiency plans demonstrates a strategic understanding of the market dynamics and operational challenges.
In the past three months, shares of this Zacks Rank #3 (Hold) company have risen 4.3% compared with the industry’s growth of 11.4%.
Bet Your Bucks on These Hot Stocks
We have highlighted three better-ranked stocks, namely Nomad Foods Ltd. (NOMD - Free Report) , Ingredion Incorporated (INGR - Free Report) and Benson Hill Inc. (BHIL - Free Report) .
The Zacks Consensus Estimate for Nomad Foods’ current financial-year sales suggests growth of 6.6% from the year-ago reported figure. NOMD has a trailing four-quarter earnings surprise of 7.7%, on average.
Ingredion, an ingredients solutions provider specializing in nature-based sweeteners, starches and nutrition ingredients, currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for Ingredion’s current financial-year sales and earnings suggests growth of 5% and 24.7%, respectively, from the year-ago reported numbers. INGR has a trailing four-quarter earnings surprise of 23.9%, on average.
Benson Hill is a food technology company that unlocks the natural genetic diversity of plants with its cutting-edge food innovation engine. It currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Benson Hill’s current financial-year sales suggests growth of 2.7% from the year-ago reported numbers. BHIL has a trailing four-quarter earnings surprise of 37.1%, on average.
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Hain Celestial (HAIN) Poised on Reimagined Strategy, E-Commerce
The Hain Celestial Group, Inc. (HAIN - Free Report) has been focused on fueling its momentum in the near future. The company’s progress in brand building, channel expansion and innovation underscores its commitment to long-term growth. This is crucial for adapting to the evolving market trends and consumer preferences.
HAIN witnessed notable growth in specific segments like better-for-you snacks, baby & kids products, beverages, and meal prep items in the first quarter of fiscal 2024. This, in turn, reflects its alignment with consumer trends, alongside highlighting its effective market research and product development strategies.
Growth in the international segment, particularly through the private label business and strong brands, demonstrates the company's global market appeal and adaptability. The segment’s net sales increased 9.3% in the fiscal first quarter, driven by strength in its meal preparation and beverages businesses.
Image Source: Zacks Investment Research
E-commerce Business Bodes Well
E-commerce represents a growing area for the company, accounting for nearly 10% of the total company sales in the fiscal first quarter. This indicates a significant shift in the company’s sales strategy, focusing more on online channels. The company has established a dedicated team to drive omni-channel and e-commerce initiatives. This strategic move is aimed at providing greater focus and support for expanding into this channel, which is seen as margin accretive.
Efforts are being made to make brands more accessible to consumers, not only away from home but also online. This approach is aimed at increasing brand reach and visibility, suggesting an integrated strategy for physical and digital presence.
Specifically, the company's better-for-you personal care business grew 6% year over year in the e-commerce channel in the fiscal first quarter, indicating a positive trend in this specific product category within the digital marketplace.
Reimagined Strategy - Another Key Factor
The company’s "Hain Reimagined" is a transformative approach to pivot the business toward profitable growth. This strategy focuses on five core consumer-centric platforms (snacks, baby & kids, beverages, meal prep, and personal care) and targets five key markets (the United States, Canada, the U.K., Ireland, and Europe).
It aims to enhance brand strength, share gains and channel expansion, particularly in its core segments. The expansion into margin-accretive channels, bolstering away-from-home capabilities, and implementing a fuel program comprising revenue growth management, working capital management and operational efficiency are integral to this strategy.
This program is expected to result in a significant increase in the adjusted gross margin, with an expansion of 400-500 basis points, and is projected to generate a cumulative free cash flow of $400 million by fiscal 2027. The company's long-term vision includes seeing an organic net sales compound annual growth rate (CAGR) of more than 3%, an adjusted EBITDA CAGR of above 10%, an adjusted EBITDA margin exceeding 12%, and maintaining a net debt leverage ratio between 2-3 times by fiscal 2027.
Wrapping Up
The company is experiencing challenges in its North America segment. In the fiscal first quarter, net sales from this segment saw a year-over-year decrease of 9.8%, amounting to $260.1 million. This downturn was largely due to reduced sales in the baby & kids business, impacted by widespread supply issues in the organic baby formula sector.
However, the company's balanced approach to business expansion and management through its growth and operational efficiency plans demonstrates a strategic understanding of the market dynamics and operational challenges.
In the past three months, shares of this Zacks Rank #3 (Hold) company have risen 4.3% compared with the industry’s growth of 11.4%.
Bet Your Bucks on These Hot Stocks
We have highlighted three better-ranked stocks, namely Nomad Foods Ltd. (NOMD - Free Report) , Ingredion Incorporated (INGR - Free Report) and Benson Hill Inc. (BHIL - Free Report) .
Nomad Foods manufactures and distributes frozen foods. The company currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Nomad Foods’ current financial-year sales suggests growth of 6.6% from the year-ago reported figure. NOMD has a trailing four-quarter earnings surprise of 7.7%, on average.
Ingredion, an ingredients solutions provider specializing in nature-based sweeteners, starches and nutrition ingredients, currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for Ingredion’s current financial-year sales and earnings suggests growth of 5% and 24.7%, respectively, from the year-ago reported numbers. INGR has a trailing four-quarter earnings surprise of 23.9%, on average.
Benson Hill is a food technology company that unlocks the natural genetic diversity of plants with its cutting-edge food innovation engine. It currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Benson Hill’s current financial-year sales suggests growth of 2.7% from the year-ago reported numbers. BHIL has a trailing four-quarter earnings surprise of 37.1%, on average.