Hain Celestial Sales Down 5%, Forecasts 2018 Turnaround

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Whole Foods Amazon cuts chicken prices
Hain Celestial told analysts price cuts at Whole Foods-Amazon should help grow its sales.

Lake Success, NY — Hain Celestial announced a 2% decline in Q4 sales and a greater 5% year-over-year decline but maintained it is poised for turnaround due to some strategic moves in 2017 and predicted the Amazon-Whole Foods Market combo will be a boon, even with reduced prices.

“Amazon’s acquisition of Whole Foods is a powerful combination and very favorable for us,” maintained Irwin D. Simon, founder, president and CEO of Hain Celestial, on a conference call with analysts. “We know this will grow the organic market. Today, natural and organic products represent [only] 9% of sales in brick-and-mortar and online [it’s] 29%.”

Comparable store sales of Hain products in Whole Foods were up 5% in the latest quarter, after many months of being in negative territory.

In a sign of things to come, on Monday, the new Whole Foods-Amazon slashed prices by 40% on its organic rotisserie chickens (a Hain Celestial product line).

For Q4 2017, Hain Celestial reported overall net sales of $725.1 million, a 2% decrease over the same period in 2016 and adjusted EBITDA of $86 million compared to $91 million. Hain Celestial U.S. reported net sales of $309 million, a 1% year-over-year quarterly increase and Hain Pure Protein was up 8% to $122.2 million for the quarter.

For the year overall, Hain Celestial U.S. reported a 5% year-over-year net sales decrease to $1.2 billion. Part of the reason, analysts were told, was the elimination of 20% of the company’s SKUs and the inventory repercussions of that. Moving forward, the company plans to put its focus on its top-selling 500 SKUs.

At the same time, Hain introduced more than 200 products worldwide and made two acquisitions, which added $1.6 million to sales — Yorkshire Provender in the U.K. and Better Bean under Cultivate Ventures. The company also announced a strategic joint venture with Future Group in India.

Through its Project Terra global cost saving initiative, Hain Celestial forecasts $350 million in savings through fiscal year 2020.

Irwin Simon concluded, “We are well-positioned among some of the fastest growing trends, categories and channels in consumer products today and are fortunate to have the financial flexibility to support our future business growth and capital allocation priorities.  We believe our continued ability to evolve our business as we grow our organic, natural and better-for-you brands, expand relationships with new and existing customers and attract new consumers globally, paired with Project Terra, will fuel our success and create long-term value for our shareholders.”

Fiscal Year 2018 Guidance
The Company provided its annual guidance for fiscal year 2018:

  • Total net sales of $2.967 billion to $3.036 billion, an increase of approximately 4% to 6% as compared to fiscal year 2017.
  • Adjusted EBITDA of $350 million to $375 million, an increase of approximately 27% to 36% as compared to fiscal year 2017.
  • Adjusted earnings per diluted share of $1.63 to $1.80, an increase of approximately 34% to 48% as compared to fiscal year 2017.

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