Hain Celestial Group Inc. Earnings Report for Fiscal Q4 2024

Hain Celestial Group Inc. (NASDAQ: HAIN), a leading organic and natural products company, reported robust fiscal fourth-quarter 2024 results, outperforming its own guidance. The company saw a 3% increase in organic net sales and achieved adjusted EBITDA at the high end of its projections. Additionally, Hain Celestial surpassed its free cash flow expectations and reported progress in adjusted gross margin expansion.

The company’s focus on its Hain Reimagined strategy, which includes consolidating manufacturing, divesting non-core brands, and global integration, has positioned it for stronger commercial execution and growth in fiscal 2025.

Key Takeaways

• Hain Celestial reported organic net sales growth of 3% and adjusted EBITDA at the upper end of expectations for fiscal Q4 2024.
• The company exceeded its free cash flow expectations and made progress in adjusted gross margin expansion.
• Significant strides were made in the Hain Reimagined strategy, including manufacturing consolidation, divesting non-strategic brands, and global business integration.
• Hain Celestial aims to drive top and bottom-line growth in fiscal 2025, focusing on stronger commercial execution.
• The company expects e-commerce and away-from-home channels, along with categories such as snacks, baby and kids, and beverages, to drive growth in the next fiscal year.

Company Outlook

• Hain Celestial plans to stabilize the remaining 15% of its business and deliver sustainable growth.
• The company aims to drive growth through operational efficiency, working capital management, and debt reduction.
• Brand building, channel expansion, and innovation are key focus areas, with e-commerce and away-from-home channels expected to be significant growth drivers.
• Hain Celestial anticipates flat or better organic net sales growth and mid-single-digit growth in adjusted EBITDA for fiscal 2025.

Bearish Highlights

• The company experienced a decline in personal care sales.
• There were challenges in the tea business, including packaging changes and reduced promotion spend.
• Some categories, such as toothpaste and deodorants, were exited to simplify the portfolio.

Bullish Highlights

• The snacks category showed positive momentum, especially with the Garden Veggie Flavor Burst innovation.
• Infant formula is expected to be a key growth driver in the Baby and Kids category as supply recovers.
• The Beverage category achieved mid-single-digit organic net sales growth, driven by European non-dairy beverages and Celestial Seasonings.

Misses

• The company anticipates negative organic net sales growth in the first quarter of fiscal 2025.
• Linda McCartney’s brand saw a decline.
• Softness was noted in the Hartley’s snack business due to contract changes.

Q&A Highlights

• Hain Celestial addressed the sourcing of organic lactose for infant formula, mentioning multiple supply options and increased inventory.
• The company will start breaking out price and volume independently in fiscal 2025.
• Executives expressed confidence in the salty snacks portfolio and the unique position of their brands in the better-for-you category.

In fiscal 2024, Hain Celestial faced unique challenges but managed to make strategic decisions that set the stage for accelerated growth in the coming years. The company’s commitment to achieving long-term financial goals, such as a 3%+ organic net sales CAGR, significant gross margin expansion, and an adjusted EBITDA margin of 12% or higher by fiscal 2027, remains steadfast. With a clear focus on commercial execution and strategic growth drivers, Hain Celestial is poised to pivot to growth and capitalize on significant opportunities ahead in fiscal 2025.

InvestingPro Insights

• As Hain Celestial Group Inc. (HAIN) charts its course for fiscal 2025, several metrics and insights from InvestingPro could provide investors with a nuanced perspective on the company’s financial health and market position.
• InvestingPro Data reveals that Hain Celestial has a market capitalization of $729.53 million, indicating its size within the organic and natural products sector. Despite the challenges faced in fiscal 2024, the company’s gross profit margin remains healthy at 22.17%, reflecting its ability to maintain profitability in core operations. Moreover, the recent 9.63% return over the last week suggests positive short-term investor sentiment towards the company’s stock.
• An InvestingPro Tip highlights that Hain Celestial’s net income is expected to grow this year, aligning with the company’s optimistic outlook for fiscal 2025. Additionally, the company’s valuation implies a strong free cash flow yield, which is an encouraging sign for investors looking for companies with the potential to generate cash. These insights, coupled with the company’s clear focus on commercial execution and strategic growth drivers, suggest that Hain Celestial may be well-positioned for future profitability.

For more detailed insights, investors can explore analyst revisions and profitability predictions by visiting InvestingPro.

Full transcript – The Hain Celestial Group Inc (HAIN) Q4 2024

• Operator: Greetings. Welcome to Hain Celestial’s Fiscal Fourth Quarter 2024 Earnings Conference Call. All participants will be in listen-only mode. The Q&A session will follow the formal presentation.

• Alexis Tessier: Thank you for joining us for a review of our fourth-quarter results. I’m joined this morning by Wendy Davidson, our President and Chief Executive Officer; and Lee Boyce, our Chief Financial Officer. This call may involve forward-looking statements. Please refer to our financial reports for the associated risks.

• Wendy Davidson: I’ll begin by reviewing our key messages, the progress we’ve made on our Hain Reimagined strategy, and our outlook for fiscal 2025. We exceeded our guidance with organic net sales growth ahead of projections. We also saw significant improvements in our free cash flow and gross margin expansion.

• Lee Boyce: In the fourth quarter, we had negative organic net sales growth of 4% year-over-year, driven by lower sales in both North America and International segments. Our adjusted EBITDA margins remained pressured due to lower sales volume but our gross margins improved.

• Wendy Davidson: Moving forward, we will filter growth initiatives through our focus on brand building and operational efficiency. Our team will work hard to stabilize the remaining 15% of our business as we push toward achieving our fiscal 2025 goals.

• Finally, I want to express thanks to all team members who have contributed to our progress, and I am excited about the work we will continue to deliver this upcoming year.

Operator: This will conclude today’s conference. Thank you for joining. You may disconnect your lines at this time.