Hain Reports Better-Than-Expected Q1 2022 Results

"We believe that we are well positioned for the future," said CEO Mark Schiller, "and we expect another strong year as we continue to create shareholder value."

THE HAIN CELESTIAL GROUP, INC. Logo

Lake Success, NY—Hain Celestial has reported financial results for the first quarter 2022 ended September 30, 2021, according to a press release.

Mark L. Schiller, Hain Celestial’s President and Chief Executive Officer, commented: “We are pleased to have delivered better top line and bottom line first quarter performance than our guidance as we navigated a challenging operating environment affected by industry-wide inflation and labor challenges. In September, we held our Investor Day, during which we shared our Hain 3.0 vision and strategy for the next several years at Hain, focused on building a global healthy food and beverage company with industry-leading top line growth. We believe that we are well positioned for the future, and we expect another strong year as we continue to create shareholder value.”

Highlights include:

  • Net sales decreased 9% to $454.9 million, or 11% on a constant currency basis, compared to the prior year period.
  • When adjusted for foreign exchange, divestitures and discontinued brands, net sales were flat compared to the prior year period.
  • Gross margin of 23.2%, a 72 basis point decrease from the prior year period.
  • Adjusted gross margin of 23.9%, a 24 basis point decrease from the prior year period.
  • Operating income of $25.5 million compared $3.3 million in the prior year period.
  • Adjusted operating income of $34.3 million compared to $38.8 million in the prior year period.
  • Net income of $19.4 million compared to a net loss of $10.8 million in the prior year period.
  • Adjusted net income of $23.8 million compared to $27.4 million in prior year period.
  • Adjusted EBITDA of $47.3 million compared to $54.9 million in the prior year period.
  • Adjusted EBITDA margin of 10.4%, a 61 basis point decrease compared to the prior year period.
  • Earnings per diluted share (“EPS”) of $0.20 compared to a loss of $0.11 in the prior year period.
  • Adjusted EPS of $0.25 compared to $0.27 in the prior year period.
  • Repurchased 4.5 million shares, or 4.6% of the outstanding common stock, at an average price of $38.80 per share.

In the North America segment, specifically:

  • North America net sales in the first quarter were $265.5 million, a decrease of 5% compared to the prior year period. When adjusted for foreign exchange, divestitures and discontinued brands, net sales decreased 1% from the prior year period.
  • Segment gross profit in the first quarter was $56.8 million, a 24% decrease from the prior year period. Adjusted gross profit was $59.2 million, a decrease of 22% from the prior year period. Gross margin was 21.4%, a 533 basis point decrease from the prior year period, and adjusted gross margin was 22.3%, a 476 basis point decrease from the prior year period.
  • Segment operating income in the first quarter was $16.8 million, a 49% decrease from the prior year period. Adjusted operating income was $20.5 million, a 41% decrease from the prior year period.
  • Adjusted EBITDA in the first quarter was $24.1 million, a 38% decrease from the prior year period. As a percentage of sales, North America adjusted EBITDA margin was 9.1%, a 486 basis point decrease from the prior year period.

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And in the International segment:

  • International net sales in the first quarter were $189.4 million, a decrease of 13% compared to the prior year period. When adjusted for foreign exchange, divestitures and discontinued brands, net sales increased 2% compared to the prior year period.
  • Segment gross profit in the first quarter was $48.6 million, a 10% increase from the prior year period. Adjusted gross profit was $49.5 million, an increase of 11% from the prior year period. Gross margin was 25.7%, a 541 basis point increase from the prior year period, and adjusted gross margin was 26.1%, a 576 basis point increase from the prior year period.
  • Segment operating income in the first quarter was $24.1 million, compared to a loss of $15.9 million in the prior year period. Adjusted operating income was $25.2 million, an increase of 46% from the prior year period.
  • Adjusted EBITDA in the first quarter was $32.4 million, a 21% increase from the prior year period. As a percentage of sales, International adjusted EBITDA margin was 17.1%, a 487 basis point increase from the prior year period.

Looking at capital management, the Board of Directors of Hain approved an additional $300m share repurchase authorization in August 2021. During the first quarter of FY2022, Hain repurchased 4.5 million shares, or 4.6% of the outstanding common stock, at an average price of $38.80 per share, for a total of $175.6m, excluding commissions. As of September 30, Hain had $206.8m remaining for this authorization.

Projecting outward, Hain expects low-single-digit adjusted net sales growth, modest adjusted gross margin expansion, and mid- to high-single-digit adjusted EBITDA growth.