Hain Celestial Reports 9.4% Decline in Net Sales and Significant Operating Loss

The Hain Celestial Group, Inc. reported a significant decline in financial performance for the quarter ending December 31, 2024, with net sales of $411.5 million, down 9.4% from $454.1 million in the same period last year. The decrease was attributed to a $16.3 million impact from divestitures and exited product categories, alongside a 3.3% decline in organic net sales, which fell by $29.4 million. The company's gross profit also decreased to $93.5 million, an 8.6% drop compared to the previous year, although the gross profit margin improved slightly to 22.7%.

The company faced a substantial operating loss of $91.9 million, compared to a loss of $0.8 million in the prior year, primarily due to a non-cash goodwill impairment charge of $91.3 million related to its U.S. reporting unit. This impairment was a result of declining market capitalization and significant intangible asset impairment charges. Additionally, the company recorded $18 million in impairment charges for intangibles and long-lived assets, reflecting ongoing challenges in its North America segment.

Strategically, Hain Celestial is undergoing a multi-year transformation program called "Hain Reimagined," aimed at optimizing its portfolio and improving profitability. The program has already led to the divestiture of non-core brands and is expected to yield annualized pretax savings of $130 million to $150 million. For the six months ending December 31, 2024, the company reported a net loss of $123.6 million, or $1.37 per diluted share, compared to a loss of $23.9 million, or $0.27 per diluted share, in the prior year.

Operationally, the North America segment saw a 14.3% decline in net sales, primarily due to lower sales in snacks and personal care categories. The International segment also experienced a slight decrease of 2.3% in net sales. The company’s total assets decreased to $1.96 billion from $2.12 billion at the end of the previous fiscal year, with total liabilities also declining to $1.16 billion. The company’s cash and cash equivalents increased to $56.2 million, reflecting a modest improvement in liquidity.

Looking ahead, Hain Celestial anticipates continued challenges due to inflationary pressures and changing consumer preferences. The company remains focused on executing its transformation strategy while managing its supply chain effectively. The outlook includes a commitment to enhancing operational efficiency and exploring strategic alternatives for its personal care business, which is part of the broader restructuring efforts aimed at driving future growth.