Hain Celestial Reports Fiscal Third Quarter 2025 Financial Results

Published: 2025-05-07 07:03:29 ET HAIN

Published on 05/07/2025 at 07:03

HOBOKEN, N.J., May 07, 2025 (GLOBE NEWSWIRE) -- The Hain Celestial Group, Inc. (Nasdaq: HAIN), a leading global health and wellness company whose purpose is to inspire healthier living through better-for-you brands, today reported financial results for its fiscal third quarter ended March 31, 2025. In a separate release today, the Company announced a CEO transition and strategic review of the Company’s portfolio.

"We are disappointed with our third quarter results, which fell far short of our expectations primarily due to worse-than-expected performance in North America. Despite the shortfall in net sales in the quarter, we are encouraged by a return to organic net sales growth in our international segment and continued progress in reducing net debt,” said Alison Lewis, Interim President and CEO. “Going forward, we are focused on five key drivers for improving value: simplifying our business and reducing overhead spending, accelerating renovation and innovation in our brands, implementing strategic revenue growth management and pricing actions, driving operational productivity and working capital reduction, and strengthening our digital capabilities."

Lewis continued, “While the macroeconomic environment remains challenging, recent regulatory shifts focusing on health and wellness reaffirm Hain’s strength as a pure-play, better-for-you leader. We have a portfolio of strong brands in attractive categories, and we believe the challenges we face are largely within our control. The opportunity ahead of us now is to unlock the full value of our business through focused and disciplined execution."

FINANCIAL HIGHLIGHTS*

Summary of Fiscal Third Quarter Results Compared to the Prior Year Period

* This press release includes certain non-GAAP financial measures, which are intended to supplement, not substitute for, comparable GAAP financial measures. Reconciliations of non-GAAP financial measures to GAAP financial measures and other non-GAAP financial calculations are provided in the tables included in this press release.

Cash Flow and Balance Sheet Highlights

SEGMENT HIGHLIGHTS

The company operates under two reportable segments: North America and International.

North AmericaFiscal third quarter organic net sales decreased by 10% year-over-year, primarily driven by lower sales in snacks and baby & kids.

Segment gross profit in the fiscal third quarter was $49 million, a decrease of 17% from the prior year period. Adjusted gross profit was $50 million, also a decrease of 17% from the prior year period. Gross margin was 22.1%, unchanged from the prior year period. Adjusted gross margin was 22.4%, a 20-basis point increase from the prior year period. The increase was driven by productivity partially offset by higher trade spend and inflation.

Adjusted EBITDA in the fiscal third quarter was $17 million compared to $28 million in the prior year period. The decrease was primarily driven by lower volume/mix and higher trade spend, partially offset by productivity. Adjusted EBITDA margin was 7.8% compared to 10.4% in the prior year period.

InternationalFiscal third quarter organic net sales growth was 0.5% year-over-year. This was driven by growth in meal prep and baby & kids and the supply chain recovery from the service issues discussed last quarter, partially offset by declines in beverages and snacks.

Segment gross profit in the fiscal third quarter was $35 million, a 5% decrease from the prior year period. Adjusted gross profit was also $35 million, a decrease of 7% from the prior year period. Gross margin and adjusted gross margin were both 21.1%, representing a 90- and 130-basis point decrease from the prior year period, respectively. The decrease in each case was driven by inflation, partially offset by productivity.

Adjusted EBITDA in the fiscal third quarter was $22 million, a decrease of 10% versus the prior year period, driven primarily by inflation and net pricing, inclusive of own label contracts, partially offset by favorable volume/mix. Adjusted EBITDA margin was 13.2%, a 120-basis point decrease from the prior year period.

CATEGORY HIGHLIGHTS

SnacksThe fiscal third quarter organic net sales decline of 13% year-over-year was driven by lower promotion effectiveness as well as continued category softness.

Baby & KidsThe fiscal third quarter organic net sales decline of 6% year-over-year was driven by lapping formula sales last year at a key retailer which was lost in the spring of 2024, softness in pouches, and the impact of SKU simplification.

BeveragesThe fiscal third quarter organic net sales decline of 7% year-over-year was driven by continued channel mix shift in non-dairy beverage in Europe and by our slow start to hot tea season.

Meal PrepThe fiscal third quarter organic net sales growth of 1% was primarily driven by continued growth in soup brands in the UK and growth in yogurt in North America.

CREDIT AGREEMENT AMENDMENT

Subsequent to the end of the quarter, the company and the lenders under the company’s credit agreement have amended the credit agreement to provide for increased operational flexibility. Among other things, the amended credit agreement sets a maximum net secured leverage ratio of 4.75x for the quarter ending June 30, 2025 through (and including) the quarter ending March 31, 2026, 4.50x for the quarter ending June 30, 2026 and 4.25x for the quarter ending September 30, 2026 and thereafter.

FISCAL 2025 GUIDANCE*

“We are adjusting our outlook for the year based on the slower than anticipated volume recovery and the softening and volatile macroeconomic environment, coupled with increased investment in promotional activities to support our brands and drive incremental distribution,” stated Lee Boyce, CFO.

The company is revising guidance for fiscal 2025 as follows:

* The forward-looking non-GAAP financial measures included in this section are not reconciled to the comparable forward-looking GAAP financial measures. The company is not able to reconcile these forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures without unreasonable efforts because the company is unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact GAAP measures but would not impact the non-GAAP measures. Such items may include certain litigation and related expenses, transaction costs associated with acquisitions and divestitures, productivity and transformation costs, impairments, gains or losses on sales of assets and businesses, foreign exchange movements and other items. The unavailable information could have a significant impact on the company’s GAAP financial results.

Conference Call and Webcast Information

Hain Celestial will host a conference call and webcast today at 8:00 AM ET to discuss its results and business outlook. The live webcast and accompanying presentation are available under the Investors section of the company’s corporate website at www.hain.com. Investors and analysts can access the live call by dialing 800-715-9871 or 646-307-1963. The conference ID is 5099081. Participation by the press and public in the Q&A session will be in listen-only mode. A replay of the call will be available shortly after the conclusion of the live call through Wednesday, May 14th, 2025, and can be accessed by dialing 800-770-2030 or 609-800-9909 and referencing the conference access ID: 5099081.

About The Hain Celestial Group

Hain Celestial Group is a leading health and wellness company whose purpose is to inspire healthier living for people, communities and the planet through better-for-you brands. For more than 30 years, Hain has intentionally focused on delivering nutrition and well-being that positively impacts today and tomorrow. Headquartered in Hoboken, N.J., Hain Celestial's products across snacks, baby/kids, beverages and meal preparation are marketed and sold in over 70 countries around the world. Our leading brands include Garden Veggie Snacks™, Terra® chips, Garden of Eatin'® snacks, Hartley’s® jelly, Earth's Best® Organic and Ella's Kitchen® baby and kids foods, Celestial Seasonings® teas, Joya® and Natumi® plant-based beverages, The Greek Gods® yogurt, Cully & Sully®, Yorkshire Provender®, New Covent Garden® and Imagine® soups, among others. For more information, visit www.hain.com and LinkedIn.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, our results may differ materially from those expressed or implied by such forward-looking statements. The words “believe,” “expect,” “anticipate,” “may,” “should,” “plan,” “intend,” “potential,” “will” and similar expressions are intended to identify such forward-looking statements. Forward-looking statements include, among other things: our beliefs or expectations relating to our future performance, results of operations and financial condition, including statements related to the reevaluation of our strategy, our ability to evolve and position Hain for long-term sustainable growth, expectations regarding organic net sales trends, the effectiveness of our marketing, promotional, distribution and investment initiatives, our ability to capitalize on new opportunities, our ability to drive growth and create value for shareholders and the macroeconomic environment.

Risks and uncertainties that may cause actual results to differ materially from forward-looking statements include: challenges and uncertainty resulting from the impact of competition; our ability to manage our supply chain effectively (including as a result of U.S. government tariffs and the imposition of any counter-tariffs); input cost inflation, including with respect to freight and other distribution costs; disruption of operations at our manufacturing facilities; reliance on independent contract manufacturers; changes to consumer preferences; customer concentration; our ability to execute our cost reduction initiatives and related strategic initiatives; impairments in the carrying value of goodwill or other intangible assets; reliance on independent distributors; risks associated with operating internationally; the availability of organic ingredients; risks associated with outsourcing arrangements; risks associated with geopolitical conflicts or events; our ability to identify and complete acquisitions or divestitures and our level of success in integrating acquisitions; our reliance on independent certification for a number of our products; our ability to attract and retain highly skilled people; risks related to tax matters, including changes in tax policy, tariffs, or import and export controls; the reputation of our company and our brands; our ability to use and protect trademarks; foreign currency exchange risk; general economic conditions; compliance with our credit agreement; cybersecurity incidents; disruptions to information technology systems; the impact of climate change and related disclosure regulations; liabilities, claims or regulatory change with respect to environmental matters; pending and future litigation, including litigation relating to Earth’s Best® baby food products; potential liability if our products cause illness or physical harm; the highly regulated environment in which we operate; compliance with data privacy laws; the adequacy of our insurance coverage; and other risks and matters described in our most recent Annual Report on Form 10-K and our other filings from time to time with the U.S. Securities and Exchange Commission.

We undertake no obligation to update forward-looking statements to reflect actual results or changes in assumptions or circumstances, except as required by applicable law.

Non-GAAP Financial Measures

This press release and the accompanying tables include non-GAAP financial measures, including, among others, organic net sales; adjusted gross profit and its related margin; adjusted operating income and its related margin; adjusted net income and its related margin; diluted net income per common share, as adjusted; adjusted EBITDA and its related margin; free cash flow; and net debt. The reconciliations of historic non-GAAP financial measures to the comparable GAAP financial measures are provided in the tables below. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, these non-GAAP measures may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. They should be read only in connection with the company’s consolidated financial statements presented in accordance with GAAP.

We define our non-GAAP financial measures as follows:

We believe that the non-GAAP financial measures presented provide useful additional information to investors about current trends in the company’s operations and are useful for period-over-period comparisons of operations. We provide:

We discuss the Company’s net secured leverage ratio as calculated under our credit agreement as a measure of our financial condition, liquidity and compliance with our credit agreement. For a description of the material terms of our credit agreement and risks of non-compliance with our credit agreement, see “Liquidity and Capital Resources” under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in our most recent Annual Report on Form 10-K and our subsequent quarterly reports on Form 10-Q filed with the U.S. Securities and Exchange Commission.

Investor Relations Contact:Alexis [email protected]

Media Contact:Jen [email protected]

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