The Hain Celestial Group, Inc. (NASDAQ:HAIN) has reported fourth-quarter fiscal 2023 results that exceeded expectations. Earnings per share met the consensus estimate set by Zacks. While the company experienced a decrease in revenue compared to the same period last year, its bottom-line performance demonstrated a year-over-year increase.
The manufacturer, marketer, distributor, and seller of organic and natural products has seen a 7.1% decline in its share value over the past three months, in contrast to the industry’s 7.7% downturn.
Detailed Quarter Overview
Hain achieved adjusted earnings of 11 cents per share. This marks a 37.5% rise in bottom-line results compared to the previous year’s earnings of 8 cents per share in the same fiscal quarter.
Net sales reached $447.8 million, surpassing the consensus estimate of $441 million. However, the top-line figure represents a 2% decline from the reported amount in the year-ago fiscal quarter. After adjustments for foreign exchange, acquisitions, divestitures, and discontinued brands, adjusted net sales experienced a 1.5% decrease from the same period last year.
Adjusted gross profit amounted to $100.7 million, indicating a 13.1% increase from the previous year’s quarter, while the adjusted gross margin expanded by 325 basis points (bps) to 22.7% from the reported figure in the year-ago fiscal quarter. The gross margin expansion outperformed the expected 310 bps increase.
Adjusted operating income for the quarter stood at $28.7 million, reflecting a significant 48.7% surge compared to the year-ago fiscal quarter. On a constant-currency basis, adjusted EBITDA dropped by 22.9% from the previous year’s quarter to $43.5 million, but the adjusted EBITDA margin showed growth, expanding by 200 bps to 9.7%.
Segmental Breakdown
Net sales within the North American segment experienced a 5.1% decrease from the reported figure in the year-ago fiscal quarter, settling at $281.8 million. After adjustments for currency fluctuations, divestitures, and discontinued brands, adjusted net sales dipped by 4.3%. The decline was attributed to reduced sales in personal care and ParmCrisps, partially offset by increased sales in yogurt, tea, and baby products. Lower distribution and customer promotions for the ParmCrisps brand were factors affecting sales.
For the International segment, net sales demonstrated growth, rising by 3.7% from the reported figure in the year-ago fiscal quarter, totaling $166.1 million. After accounting for foreign currency fluctuations, adjusted net sales saw a 3.6% increase. The growth was driven by performance improvements in the United Kingdom, though countered by weaker results in plant-based categories across the rest of Europe.
Other Financial Highlights
As of the end of the reported quarter, Hain Celestial had $53.4 million in cash and cash equivalents, long-term debt (excluding the current portion) of $821.2 million, and total shareholders’ equity amounting to $1,017.9 million.
During the fourth quarter year-to-date period of fiscal 2023, the company reported cash generated from operating activities at $66.8 million and an operating free cash flow of $38.9 million.
Guidance for the Future
Looking ahead to fiscal 2024, Hain Celestial anticipates a 2-4% increase in adjusted net sales year over year, with projected adjusted EBITDA ranging between $155 million and $165 million. The company envisions balanced growth across its portfolio, including low-single-digit organic net sales growth for both the North American and International segments.
Featured Image: Unsplash @ Lisa Hobbs
