Hain Celestial (NASDAQ:HAIN) Reports Sales Below Analyst Estimates In Q2 Earnings

Max Juang /
2024/02/07 7:22 am EST

Natural food company Hain Celestial (NASDAQ:HAIN) missed analysts' expectations in Q2 FY2024, with revenue flat year on year at $454.1 million. It made a non-GAAP profit of $0.12 per share, down from its profit of $0.20 per share in the same quarter last year.

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Hain Celestial (HAIN) Q2 FY2024 Highlights:

  • Revenue: $454.1 million vs analyst estimates of $462 million (1.7% miss)
  • EPS (non-GAAP): $0.12 vs analyst expectations of $0.12 (1.4% miss)
  • Free Cash Flow of $14.83 million, up 108% from the previous quarter
  • Gross Margin (GAAP): 22.5%, down from 22.9% in the same quarter last year
  • Organic Revenue was up 0.2% year on year
  • Market Capitalization: $1.02 billion

“We are pleased with the continued progress we are making on key pillars of our Hain Reimagined strategy, generating fuel through working capital management and productivity savings, driving growth through channel expansion and building our organizational capabilities to scale our brands, expand our margins, and transform our business for sustained performance,” said Wendy Davidson, President and Chief Executive Officer.

Sold in over 75 countries around the world, Hain Celestial (NASDAQ:HAIN) is a natural and organic food company whose products range from snacks to teas to baby food.

Packaged Food

As America industrialized and moved away from an agricultural economy, people faced more demands on their time. Packaged foods emerged as a solution offering convenience to the evolving American family, whether it be canned goods, prepared meals, or snacks. Today, Americans seek brands that are high in quality, reliable, and reasonably priced. Furthermore, there's a growing emphasis on health-conscious and sustainable food options. Packaged food stocks are considered resilient investments. People always need to eat, so these companies can enjoy consistent demand as long as they stay on top of changing consumer preferences.The industry spans from multinational corporations to smaller specialized firms and is subject to food safety and labeling regulations.

Sales Growth

Hain Celestial carries some recognizable brands and products but is a mid-sized consumer staples company. Its size could bring disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale. On the other hand, Hain Celestial can still achieve high growth rates because its revenue base is not yet monstrous.

As you can see below, the company's revenue has declined over the last three years, dropping 5.2% annually. This is among the worst in the consumer staples industry, where demand is typically stable.

Hain Celestial Total Revenue

This quarter, Hain Celestial missed Wall Street's estimates and reported a rather uninspiring 0% year-on-year revenue decline, generating $454.1 million in revenue. Looking ahead, Wall Street expects sales to grow 4.9% over the next 12 months, an acceleration from this quarter.

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Key Takeaways from Hain Celestial's Q2 Results

Hain Celestial largely missed on key lines this quarter, including revenue and EPS. Overall, the results could have been better. The stock is flat after reporting and currently trades at $11.34 per share.

Hain Celestial may not have had the best quarter, but does that create an opportunity to invest right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.

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