Yahoo Finance Hain Celestial (HAIN) Lowers FY24 View Despite Q3 Earnings Beat
The Hain Celestial Group, Inc. HAIN posted mixed results in third-quarter fiscal 2024 results, with the bottom line beating the Zacks Consensus Estimate and the top line missing the same. Management lowered its fiscal 2024 guidance.
The Zacks Rank #4 (Sell) company’s shares have declined 31% in the past three months against the industry’s 2.2% growth.
Quarter in Detail
HAIN posted adjusted earnings of 13 cents per share, outpacing the Zacks Consensus Estimate of 7 cents. The bottom line increased from adjusted earnings of 8 cents per share reported in the year-ago fiscal quarter.
Net sales of $438.4 million missed the consensus estimate of $464.5 million. The top line declined 3.7% year over year. After adjusting for acquisitions, divestitures and discontinued brands, organic sales also fell 3.7% from the year-ago fiscal quarter’s reported figure.
The Hain Celestial Group, Inc. Price, Consensus and EPS Surprise
The Hain Celestial Group, Inc. price-consensus-eps-surprise-chart | The Hain Celestial Group, Inc. Quote
Adjusted gross profit of $97.8 million inched up 0.3% from the year-ago quarter’s figure. The adjusted gross margin expanded 90 basis points (bps) from the year-ago fiscal quarter’s reported figure to 22.3%. We had expected the adjusted gross margin to expand 210 bps to 23.5%.
SG&A expenses came in at $66.7 million, down from $75 million reported in the year-ago quarter.
Adjusted EBITDA increased 17.5% year over year to $43.8 million. The adjusted EBITDA margin expanded 180 bps to 10%.
Segmental Results
Net sales in the North America segment declined 6.5% from the year-ago fiscal quarter’s reported figure to $268.1 million. Segmental organic net sales also fell 6.5%, mainly due to reduced sales in personal care as well as baby and kids. This was somewhat offset by growth in beverages.
The segment’s adjusted EBITDA amounted to $27.9 million, up 2.5% on a year-over-year basis. Adjusted EBITDA margin in the quarter expanded 90 bps to 10.4%.
The International segment’s net sales inched up 1% from the year-ago fiscal quarter’s reported figure to $170.3 million. Organic net sales also increased by 1%, reflecting a 3.4 percentage points contribution from the positive impact of foreign translation. We note that growth in beverages was countered by softness in meal prep.
Segmental adjusted EBITDA was $24.5 million, up 15.4% from the year-ago fiscal quarter’s reported figure. Adjusted EBITDA margin in the quarter expanded 180 bps to 14.4%.
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Other Financials
The company ended the reported quarter with cash and cash equivalents of $49.5 million, long-term debt (excluding the current portion) of $769.9 million and total shareholders’ equity of $944.5 million.
The company reported cash provided by operating activities of $42.3 million and free cash flow of $30.2 million during the year-to-date period of fiscal 2024.
Guidance
The pace of growth in Hain Celestial’s North America sector falls short of its expectations. Taking into account lower-than-anticipated third-quarter results, management has revised its fiscal 2024 guidance based on three key factors. The company’s infant formula division did not rebound as anticipated due to the supplier's failure to meet their commitments. Secondly, the performance of its Snacks business did not meet established standards. Lastly, the stabilization process for the Personal Care segment is taking longer than anticipated.
For the fiscal year, management now projects organic sales decline of 3-4% year over year, compared with the earlier guidance of growth of about 1% or more. It now expects fiscal 2024 adjusted EBITDA between $150 million and $155 million versus the earlier expectation of $155-$160 million. The company still anticipates a free cash flow of $40-$45 million.
Stocks to Consider
McCormick & Company, Inc. MKC is a leading manufacturer, marketer and distributor of spices, seasonings, specialty foods and flavors. It currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
The Zacks Consensus Estimate for McCormick & Company’s current fiscal-year sales and earnings indicates advancements of 0.3% and 5.6%, respectively, from the year-ago reported figures. MKC has a trailing four-quarter earnings surprise of 5.4%, on average.
The J. M. Smucker Company SJM, a branded food and beverage product company, currently carries a Zacks Rank #2. SJM has a trailing four-quarter earnings surprise of 7.5%, on average.
The Zacks Consensus Estimate for J. M. Smucker’s current fiscal-year earnings indicates growth of 7.6% from the year-ago reported figure.
Utz Brands Inc. UTZ manufactures a diverse portfolio of salty snacks, currently carrying a Zacks Rank #2. UTZ has a trailing four-quarter earnings surprise of 2% on average.
The Zacks Consensus Estimate for Utz Brands’ current financial-year earnings suggests growth of 24.6% from the year-ago reported numbers.
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The Hain Celestial Group, Inc. (HAIN) : Free Stock Analysis Report
The J. M. Smucker Company (SJM) : Free Stock Analysis Report
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Utz Brands, Inc. (UTZ) : Free Stock Analysis Report
