- Hain Celestial said it would not revise any of its previous financial statements following a review into accounting discrepancies it began last summer, according to a company statement.
- The company, which hadn’t reported earnings in more than a year, also released its earnings reports for fiscal year 2016 and the first three quarters of 2017. Both reports fell short of Wall Street estimates.
- Hain said it had revised its accounting oversight practices and would also accelerate a cost savings plan, with a goal of cutting $350 million from its operations by 2020.
Last August, Hain announced it had discovered revenue irregularities in its previous financial reports, and that it would not release earnings again until it had analyzed the discrepancies. The announcement shocked investors, and the company’s stock price, which had soared in the years leading up to that point, plummeted 34%.
In November, Hain completed an internal review that found no intentional wrongdoing, but then announced that the Securities and Exchange Commission was investigating the matter. That analysis dragged on for months, with Hain coming dangerously close to its June 30th deadline to report earnings or risk getting booted off the Nasdaq Stock Exchange.
Now that the earnings are in and Hain has cleared its name, the natural and organic manufacturer can get back to focusing on growth. Its fiscal year 2016 results, which included a net sales increase of 11% to $2.9 billion, were below Wall Street estimates. The company’s full-year forecast for this year also fell short of expectations, with projected earnings of $1.19 to $1.22 per share, well below the consensus of $1.94.
To offset recent losses, Hain announced an acceleration of a cost-cutting program that hopes to achieve $350 million in cuts by 2020.
"We have also implemented greater and more effective internal controls and enhanced oversight for our financial reporting and business units," CEO Irwin Simon said in a statement.
Founded in 1993, Hain has acquired more than 55 natural and organic brands, including BluePrint juice and Garden of Eatin snacks. It sells its products in 65 countries. In the decade leading up to last year’s surprise announcement, the company’s stock price had more than tripled. Simon said last year that he hoped to achieve $5 billion in sales by 2020 — a goal that seems hard to achieve at this point. However, Hain is in a high-growth industry, and can expect healthier results in the years ahead.
On Thursday, Hain also named a new chief financial officer, James Langrock, who has been with the company since 2015 and will be replacing Pasquale Conte, who the company says is leaving to pursue other opportunities.
Now that Hain has its accounting challenges behind it, the company could once again become an acquisition target for a large food manufacturer looking to make a big splash in the natural and organic sector. For Hain, the pressure is on to return to growth, and do so without additional financial irregularities, or else it may have no other choice but to sell itself.