Lake Success, NY — Hain Celestial reported its earnings for the first quarter of their 2019 fiscal year, just three days after Mark Schiller became president and CEO.
The company predicted a slow first quarter, and they got it: consolidated net sales decreased 5%, although when adjusted for constant currency, acquisitions, divestitures, and other items, they would have decreased 2%. Adjusted gross profit was $106.5 million, a 250 basis point decline year-over-year.
SG&A as a percentage of net sales was 14.6%, relatively flat with the prior-year period.
Corporate and U.S. adjusted EBITDA was down 36% to $34.1 million from $53.5 million in the prior-year period.
In the U.S., net sales decreased 8%, or 4% when adjusted. The adjusted gross margin declined 520 basis points year-over-year to 18.6%.
In the U.K., net sales decreased 2% to $218.6 million over the prior-year period. Adjusted, it was relatively flat. Adjusted gross profit decreased $2.1 million, and the gross margin decreased 63 basis points.
Net sales for the Rest of World decreased 5% to $98.3 million over the prior-year period, or down 2% when adjusted. Canada was relatively flat, Europe was up 1%, and Hain Ventures (formerly known as Cultivate) was down 14%. Rest of World adjusted gross profit decreased $1 million to $22.3 million, and adjusted gross margin was relatively flat.
Terra Chips is up 12% in the 12 week period ending October 21. Earth’s Best had over 9% growth in the same period. Sensible Portions struggled with one mass retailer, but is otherwise up 14%.
According to the earnings call, the drop is because of production challenges due to demand in their Personal Care business, and supply chain difficulties related to start-up issues experienced with the company’s new mixing center. Schiller told analysts he would take 90 days to review and intends to release a strategic assessment in time for the deal-making conference ACG New York.