- Hain Celestial has lowered its expectations for fiscal year 2016 from $2.97 to $3.11 billion down to $2.90 billion to $3.04 billion, a change from a 10% to 15% increase year over year to about 7% to 12%. The company has also projected lower earnings per share for the fiscal year.
- Hain is seeing mixed numbers in its U.S. vs. overall markets. In fiscal Q1 2016, U.S. sales declined 5% while adjusted operating income dropped 11%. In contrast, overall sales increased 9% while net income soared 66%.
- Once one of the few purveyors of specialty foods, Hain is facing increasing competition from other major food manufacturers, particularly in the U.S., which are beginning to offer options for categories like organic, non-GMO, and gluten-free and acquiring smaller companies that make those types of products.
" ... Here’s what’s changing for the major C.P.G.s coming into the industry," John Carroll, CEO of Hain Celestial North America, said during an investor conference earlier this week. "What they are doing is, instead of trying to use one of their core bands, they are actually buying a natural and organic brand. … (Those) brands are no stronger than the Hain brand. As a matter of fact, in many instances, our brands are stronger. At the end of the day, I would take Earth’s Best (baby food) over Plum (Organic) every day as a brand equity."
Two categories Hain has been notably challenged in are tea and snacks. RTD tea is taking off, and tea is becoming more of a go-to beverage for consumers looking to trade out soda and sugary drinks for other beverage options.
Snacking is also a significant trend among consumers as they adapt to an on-the-go lifestyle and veer away from three standard meals per day. This has caused more companies, from processed meats to cereal, to rethink their portfolios and find ways to make products more snack-friendly.
One strategy for Hain is to improve efficiency and productivity and redirect cost savings into brand investments. An initial review turned up at least $100 million in potential savings along the supply chain, Hain president and CEO Irwin Simon said at the conference, and divesting underperforming brands is also a possibility.