The Hain Celestial Group, Inc. HAIN posted better-than-expected fourth-quarter fiscal 2023 sales. Earnings per share matched the Zacks Consensus Estimate. While the top line fell from the year-ago fiscal quarter’s reported figure, the bottom line increased year over year.
Shares of this manufacturer, marketer, distributor and seller of organic and natural products have lost 7.1% in the past three months compared with the industry’s 7.7% decline.
Quarter in Detail
This presently Zacks Rank #3 (Hold) company posted adjusted earnings of 11 cents a share, which matched the Zacks Consensus Estimate. The bottom line increased 37.5% from earnings of 8 cents per share reported in the prior-year fiscal quarter.
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
Net sales of $447.8 million surpassed the consensus estimate of $441 million. The top line dipped 2% from the year-ago fiscal quarter’s reported figure. After adjusting for foreign exchange, acquisitions, divestitures and discontinued brands, adjusted net sales slipped 1.5% from the year-ago fiscal quarter’s reported figure.
Adjusted gross profit of $100.7 million increased 13.1% from the prior-year quarter’s tally, while the adjusted gross margin expanded 325 basis points (bps) from the year-ago fiscal quarter’s reported figure to 22.7%. We had expected a gross margin expansion of 310 bps.
Adjusted operating income was $28.7 million in the reported quarter, up 48.7% from the year-ago fiscal quarter. Adjusted EBITDA on a constant-currency basis dropped 22.9% from the year-ago fiscal quarter’s reported figure to $43.5 million, while adjusted EBITDA margin increased 200 bps to 9.7%.
Net sales in the North America segment tumbled 5.1% from the year-ago fiscal quarter’s reported figure to $281.8 million. After adjusting currency movements, divestitures and discontinued brands, adjusted net sales fell 4.3%. The decline was owing to lower sales in personal care and ParmCrisps, somewhat offset by increased sales in yogurt, tea and baby. Lower distribution and customer promotions, in relation to the ParmCrisps brand, hurt the sales. We had expected the segment’s sales to fall 6% to $279.2 million in the reported quarter.
The segment’s adjusted EBITDA on a constant-currency basis amounted to $124.1 million, up nearly 1.5%. Adjusted EBITDA margin on a constant-currency basis increased 30 bps to 10.8%.
The International segment’s net sales grew 3.7% from the year-ago fiscal quarter’s reported figure to $166.1 million. Upon adjusting for foreign currency fluctuations, adjusted net sales rose 3.6%, owing to increases in the United Kingdom, partly offset by weak plant-based categories in the rest of Europe. We had anticipated the segment’s sales to rise 3.1% to $165.1 million in the reported quarter.
Adjusted EBITDA on a constant currency basis was $27.5 million, up 62.8% from the year-ago fiscal quarter’s reported figure. Adjusted EBITDA margin on a constant-currency basis expanded 600 bps to 16.6%.
Hain Celestial ended the reported quarter with cash and cash equivalents of $53.4 million, long-term debt (excluding the current portion) of $821.2 million and total shareholders’ equity of $1,017.9 million.
The company reported cash provided by operating activities of $66.8 million and an operating free cash flow of $38.9 million during the fourth quarter year-to-date period of fiscal 2023.
For fiscal 2024, adjusted net sales are likely to increase 2-4% year over year and adjusted EBITDA is expected to be in the band of $155-$165 million. It projects balanced growth across the portfolio along with the North America and International segments both registering low-single digit organic net sales growth.
Some better-ranked stocks are Lamb Weston LW, MGP Ingredients MGPI and Edgewell Personal Care EPC.
Lamb Weston, a global manufacturer and distributor of value-added frozen potato products, currently sports 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 Lamb Weston’s current financial-year sales suggests growth of 27.5% from the year-ago reported number. LW has a trailing four-quarter earnings surprise of 44.8%, on average.
MGP Ingredients, which produces and markets ingredients and distillery products, currently carries a Zacks Rank #2 (Buy). MGPI has a trailing four-quarter earnings surprise of 18%, on average.
The Zacks Consensus Estimate for MGP Ingredients’ current financial-year sales and earnings per share suggests growth of 5.8% and 10.4%, respectively, from the corresponding year-ago reported figures.
Edgewell Personal Care, which manufactures personal care products, currently has a Zacks Rank of 2.
The Zacks Consensus Estimate for EPC’s current financial-year sales suggests 3.5% growth from the year-ago period’s reported figure. Edgewell Personal Care has a trailing four-quarter earnings surprise of 32.4%, on average.
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