Hain Celestial Reports 11% Decline in Net Sales and Widened Losses for Quarter Ending March 31, 2025

The Hain Celestial Group, Inc. reported a significant decline in financial performance for the quarter ending March 31, 2025, with net sales of $390.4 million, down 11% from $438.4 million in the same period last year. The decrease was attributed to a $23.3 million impact from divestitures and exited product categories, alongside a $3.8 million unfavorable foreign exchange effect. Organic net sales, which exclude these factors, fell by 5.3%, primarily due to a decline in the North America segment, where sales dropped 17% to $222.4 million. The company's gross profit also decreased to $84.7 million, reflecting a gross margin of 21.7%, slightly lower than the previous year's 22.1%.

The company faced substantial challenges, including a goodwill impairment charge of $110.3 million, resulting from a significant reduction in projected performance and cash flows. This impairment was part of a broader trend, as the company recorded total impairment charges of $134.3 million for the quarter, including $24 million related to long-lived assets. The operating loss for the quarter widened to $121.1 million, compared to a loss of $27.9 million in the prior year, while net loss reached $134.6 million, or $1.49 per diluted share, compared to a loss of $48.2 million, or $0.54 per diluted share, in the same quarter last year.

In terms of strategic developments, Hain Celestial is undergoing a transformation program called "Hain Reimagined," aimed at optimizing its portfolio and improving profitability. The company is exploring strategic alternatives for its personal care business, which has been classified as held for sale. During the nine months ending March 31, 2025, the company incurred approximately $20.4 million in expenses related to this transformation program, down from $50.2 million in the prior year. The program is expected to yield annualized savings of $130 million to $150 million.

Operationally, the company reported a decrease in Adjusted EBITDA to $33.6 million for the quarter, down from $43.8 million in the previous year, reflecting a margin decline from 10% to 8.6%. The North America segment's Adjusted EBITDA fell by 37.9% to $17.3 million, while the International segment's Adjusted EBITDA decreased by 9.7% to $22.2 million. The company’s total debt decreased to $709 million as of March 31, 2025, from $744 million at the end of the previous fiscal year, with cash and cash equivalents at $44.4 million.

Looking ahead, Hain Celestial anticipates continued challenges due to inflation, supply chain issues, and changing consumer preferences. The company remains focused on executing its transformation strategy while managing its operational costs and improving its financial health. The outlook remains cautious as the company navigates these complexities in the current economic environment.