HAIN Q2 Earnings Miss, Organic Sales Slip Y/Y, FY25 Guidance Down

The Hain Celestial Group, Inc. HAIN has posted second-quarter fiscal 2025 results, with the top and bottom lines declining year over year. Also, both metrics missed the consensus mark.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Despite challenges in the quarter, the company generated a strong operating cash flow and reduced debt. Sequential improvement was achieved in the Baby & Kids category, as well as in the largest category, Meal Prep. However, sales growth was hindered by poor in-store performance in Snacks, led by marketing and promotion effectiveness, along with supply-chain challenges. The company has lowered its fiscal 2025 guidance.HAIN has already taken steps to address these issues, and the combination of these actions, promotional timing shifts, confirmed distribution gains and full infant formula supply is expected to drive organic net sales growth in the second half of the year.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. QuoteMore on Hain Celestial’s Q2 ResultsThe Zacks Rank #4 (Sell) company posted adjusted earnings of 8 cents per share, missing the Zacks Consensus Estimate of adjusted earnings of 12 cents. The bottom line declined from 12 cents in the year-ago quarter.Net sales of $411.5 million missed the consensus estimate of $430 million. The top line declined 9.4% year over year. Organic sales fell 7% from the year-ago quarter. The decline in organic net sales was driven by a 5-point drop in the volume/mix and a 2-point reduction in price. The adjusted gross profit was $94.3 million, which fell 11.7% from the year-ago quarter. The adjusted gross margin contracted 60 basis points (bps) from the year-ago quarter to 22.9%.SG&A expenses were $70.2 million, down 5.1% from $74 million in the year-ago quarter.Adjusted EBITDA was $37.9 million, down from $47.1 million in the year-ago quarter. The adjusted EBITDA margin was 9.2%, down 120 bps year over year. We expected an adjusted EBITDA margin of 9.8% for the quarter under review.HAIN’s Q2 Revenue & Profit Insights by SegmentsNet sales in the North America segment tumbled 14.3% from the year-ago quarter to $229.3 million. Segmental organic net sales decreased 9% year over year due to reduced snack sales, which were impacted by in-store marketing activations and promotional effectiveness, as well as lower sales in personal care products. We expected North America’s sales to fall 8.3% to $245.5 million in the reported quarter.The segment’s adjusted EBITDA amounted to $25.3 million, down 18.9% from $31.2 million in the year-ago quarter. The adjusted EBITDA margin dropped 70 bps to 11% in the quarter from 11.7% in the year-ago quarter.The International segment’s net sales fell 2.3% from the year-ago quarter to $182.2 million. Segmental organic net sales declined 4% year over year due to decreased meal prep sales and short-term service challenges.The segment’s adjusted EBITDA was $22.5 million, down 13.3% from $26 million in the year-ago quarter. The adjusted EBITDA margin in the quarter contracted 150 bps to 12.4%.HAIN Stock Past Three-Month Performance Image Source: Zacks Investment Research Hain Celestial’s Categorical Sales DetailsIn the Snacks category, organic net sales for the fiscal second quarter declined 13% year over year due to in-store marketing activation and promotional effectiveness.In the Baby & Kids category, organic net sales declined 1% year over year, showing an improvement from the 3% decline in the fiscal first quarter. This improvement was driven by the regained supply of infant formula across all formulations and sizes, though it was partially offset by SKU simplification related to the shift toward baby food pouches in the United States.In Beverages, organic net sales for the fiscal second quarter declined 3% year over year, impacted by supply-chain ingredient challenges in tea, which have since been resolved, as well as channel mix dynamics in the European non-dairy beverage segment.For Meal Prep, organic net sales declined 4% year over year. The dip was led by short-term softness in private-label spreads and drizzles, partially offset by growth in yogurt, and continued strong performance in soup brands across both regions.In Personal Care, organic net sales for the fiscal second quarter declined 38% year over year due to SKU simplification initiatives as part of ongoing efforts to execute the stabilization plan.HAIN’s Financial Snapshot: Cash, Debt & Equity OverviewThe company ended the reported quarter with cash and cash equivalents of $56.2 million, long-term debt (excluding the current portion) of $721.1 million, and total shareholders’ equity of $804.7 million.Net cash used in operating activities was $30.9 million and the free cash outflow was $24.5 million in the quarter under review.What Lies Ahead for Hain Celestial?The company has revised its fiscal 2025 guidance due to commercial execution and supply-chain challenges that impacted fiscal second-quarter results. While steps have been taken to address these issues, and recent distribution wins along with the recovery of infant formula supply provide confidence for growth in the latter half of the year, the full-year outlook is being adjusted in response to performance and the challenging macroeconomic environment.The updated guidance projects organic net sales growth to decline 2-4% compared with the previously mentioned flat or better. Adjusted EBITDA is expected to be flat year over year, a downward revision from prior mentioned mid-single-digit growth. The company anticipates an increase in the gross margin but has adjusted its target to at least a 90-basis-point improvement, down from the previously stated 125-basis-point increase. HAIN anticipates generating at least $60 million in free cash flow for the year.Hain Celestial’s shares have lost 35.3% in the past three months compared with the industry’s 8.6% decline.Better-Ranked Stocks to ConsiderHere, we have highlighted three better-ranked stocks, namely United Natural Foods, Inc. UNFI, Treehouse Foods, Inc. THS and US Foods Holding Corp. USFD.United Natural Foods is the leading distributor of natural, organic and specialty food and non-food products in the United States and Canada. It presently flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for UNFI's current fiscal-year earnings and sales indicates growth of 442.9% and 0.3%, respectively, from the year-ago reported figures. UNFI delivered a trailing four-quarter average earnings surprise of 553.1%.Treehouse Foods is a manufacturer of packaged foods and beverages. It has a Zacks Rank of 2 (Buy) at present. The Zacks Consensus Estimate for the company’s current financial-year earnings and sales indicates declines of 20.7% and 4.3%, respectively, from the year-ago reported figures. THS delivered a trailing four-quarter average earnings surprise of 20.4%.US Foods is a food-service distributor. The company currently carries a Zacks Rank #2. USFD delivered a negative trailing four-quarter earnings surprise of 0.4%, on average. The Zacks Consensus Estimate for US Foods’ current financial-year earnings and sales indicates growth of 18.6% and 6.4%, respectively, from the year-ago reported figures.Just Released: Zacks Top 10 Stocks for 2025Hurry – you can still get in early on our 10 top tickers for 2025. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2025. You can still be among the first to see these just-released stocks with enormous potential. See New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Hain Celestial Group, Inc. (HAIN): Free Stock Analysis Report United Natural Foods, Inc. (UNFI): Free Stock Analysis Report TreeHouse Foods, Inc. (THS): Free Stock Analysis Report US Foods Holding Corp. (USFD): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks