It has been about a month since the last earnings report for Hain Celestial (HAIN Quick QuoteHAIN - Free Report) . Shares have lost about 18.6% 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? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for The Hain Celestial Group, Inc. before we dive into how investors and analysts have reacted as of late.

Hain Celestial Loss Narrows in Q3, Sales Decline Y/Y

Hain Celestial delivered third-quarter fiscal 2026 results that beat the Zacks Consensus Estimate for an adjusted loss but missed the same for revenues. The company’s performance reflected ongoing volume and mix pressure and portfolio effects from the recent North American snacks divestiture.

HAIN reported an adjusted loss of 1 cent per share, surpassing the Zacks Consensus Estimate for an adjusted loss of 2 cents and declining from adjusted earnings of 7 cents reported in the prior-year quarter. Net sales were $338.4 million, lagging the consensus of $353 million and falling 13% year over year as volume/mix weakness and divestiture impacts outweighed pricing.

Organic net sales decreased 6% from the prior-year period, driven by an 11-point decline in volume and mix that more than offset a 5-point benefit from pricing. The mix shift underscored continued demand pressure across key categories even as the company leaned on price actions to protect dollars.

Management emphasized operational execution and indicated that profitability improved sequentially, helped by portfolio actions and ongoing productivity initiatives. Still, the quarter’s organic contraction shows that volume recovery remains a central swing factor for the near-term story.

Gross Margin Contracts Despite Pricing Actions

Adjusted gross profit declined to $71 million from $85.2 million in the prior-year quarter. The adjusted gross margin contracted 90 basis points year over year to 21% due to cost inflation and unfavorable volume mix, partly offset by productivity savings and pricing actions.  

SG&A expenses declined 6.1% year over year to $59.1 million from $62.9 million in the year-ago quarter, mainly driven by lower employee-related expenses. However, SG&A as a percentage of net sales increased to 17.5% from 16.1% in the prior-year period. Management also noted that stranded cost impacts tied to the snacks divestiture were negligible during the third quarter.

Adjusted EBITDA decreased 22% year over year to $26 million from $34 million in the prior-year quarter. The adjusted EBITDA margin contracted 90 basis points to 7.8%.

North America Declines Outpace International Trends

North America’s net sales were $171 million and declining 23% year over year, with organic net sales down 3%. The reported decline was mainly due to weakness in baby & kids, partially offset by growth in beverages.

Adjusted EBITDA in the segment was $17 million, down 1% year over year, while the adjusted EBITDA margin improved 220 basis points to 10%. The gross margin expanded 100 basis points to 23.4%, supported by pricing and productivity initiatives. Management noted that, excluding the snacks business, North America would have delivered stronger profitability, with a gross margin of 30%.

International’s net sales were $167 million and falling 1% year over year. Organic net sales declined 8%, driven by softness in meal prep and baby & kids categories. The geographic split highlights that demand headwinds were not confined to one market, though currency provided a partial cushion outside the U.S.

Adjusted EBITDA declined 12% to $20 million and the adjusted EBITDA margin contracted to 11.7% from 13.2% in the prior-year quarter. The gross margin decreased 270 basis points to 18.5%, impacted by inflationary pressures and lower volumes.

Hain Celestial’s Category Performance

In the Snacks category, organic net sales declined 7% year over year following the divestiture of the North American snacks business. The category primarily consists of jellies within the International segment.

Organic net sales in Baby & Kids decreased 14% year over year, mainly reflecting continued industry-wide softness in purees in the U.K., as well as weakness in purees and formula in North America. However, growth in finger foods across both regions and cereal in North America partially offset the decline.

Beverages remained relatively resilient, with organic net sales remaining flat year over year. Growth in tea in North America and private-label non-dairy beverages in the International business was offset by weakness in branded non-dairy beverages.

For Meal Prep, organic net sales declined 5% year over year due to weakness in pantry brands in North America, including oil, soup and nut butter products, along with softness in spreads and drizzles in the U.K. Strength in yogurt in North America partly offset the decline.

Management highlighted innovation as a major focus area, with product launches across Celestial Seasonings wellness teas, Earth’s Best finger foods, Greek Gods yogurt and Ella’s Kitchen products supporting brand momentum. The company also emphasized accelerated renovation initiatives in the Hartley’s and Yorkshire Provender brands within its International segment.

Cash Flow & Debt Reduction Act as Bright Spots

The company ended the quarter with cash and cash equivalents of $44.3 million. Total debt stood at $549.5 million at quarter-end, down significantly from $704.8 million at the beginning of the fiscal year, while total stockholders’ equity was $215.5 million. Net debt declined to $505 million from $650 million at the beginning of fiscal 2026, reflecting strong cash generation and debt-reduction efforts.

The company also highlighted that it had $196 million in available liquidity under its revolving credit facility and remained in compliance with all credit agreement covenants. Management noted that leverage stood at 4.3X during the quarter, comfortably below the covenant limit of 5.5X, while reiterating its disciplined capital allocation strategy and continued focus on debt reduction. 

Net cash provided by operating activities was $38.3 million in the fiscal third quarter compared with $4.6 million in the prior-year period, reflecting improved working capital management and stronger operating discipline.

The free cash flow was an inflow of $34.5 million during the quarter against an outflow of $2.3 million in the prior-year period. Management highlighted that stronger free cash flow generation remains a key priority as the company continues to focus on balance-sheet improvement and deleveraging initiatives.

HAIN’s Strategic Review & Outlook

Hain Celestial stated that its ongoing strategic review has produced a multi-stage plan focused on materially improving liquidity and reducing leverage while enhancing long-term shareholder value. Management described the sale of the North American snacks business as an important first step in this process and noted that the company continues to pursue additional initiatives, including further asset sales and operational improvement actions. 

The company also confirmed that it remains actively engaged with lenders as it evaluates potential strategic transactions and refinancing alternatives. Management expressed confidence in its ability to refinance, extend or repay outstanding debt before maturity, while aligning the timing of any maturity solution with execution of the broader strategic plan.

Regarding fiscal 2026, Hain Celestial reiterated that it is not providing numeric guidance due to uncertainty surrounding the timing and outcome of the strategic review. However, management expects the divestiture of the North American snacks business to be both gross margin and EBITDA accretive. The streamlined North American portfolio is projected to generate a gross margin above 30% and an EBITDA margin in the low-double-digit range in fiscal 2026. The company also expects a positive free cash flow for fiscal 2026.

For fiscal 2027, management emphasized that its key priorities will include stabilizing sales through execution of its “five actions to win” strategy, improving gross and EBITDA margins compared with fiscal 2026, generating stronger cash flow, and fully eliminating stranded costs associated with the snacks divestiture. The company added that the formal fiscal 2027 guidance is expected to follow the completion of the strategic review process.

How Have Estimates Been Moving Since Then?

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

The consensus estimate has shifted -40% due to these changes.

VGM Scores

Currently, Hain Celestial has a strong Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, 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 A. 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. It's no surprise Hain Celestial has a Zacks Rank #4 (Sell). We expect a below average 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, Mondelez (MDLZ Quick QuoteMDLZ - Free Report) , a stock from the same industry, has gained 2%. The company reported its results for the quarter ended March 2026 more than a month ago.

Mondelez reported revenues of $10.08 billion in the last reported quarter, representing a year-over-year change of +8.2%. EPS of $0.67 for the same period compares with $0.74 a year ago.

For the current quarter, Mondelez is expected to post earnings of $0.69 per share, indicating a change of -5.5% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.5% over the last 30 days.

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