Hain Celestial (HAIN) investors are likely celebrating positive signs in the company’s turnaround strategy, but the snack and health foods company still has a lot of work to do.
On Tuesday, the chipmaker beat Wall Street’s low expectations with its fourth-quarter results. Adjusted earnings per share came in at $0.13, $0.05 above estimates. Quarterly revenue of $418.8 million was slightly above the $418.67 million estimate.
CEO Wendy Davidson, who has led the company’s multiyear transformation, told Yahoo Finance that current trends are working in the company’s favor.
“Consumers are looking for healthier options that are better for them, and that trend is in our favor. We also know that as the economy starts to stabilize, people are making those choices,” she told Yahoo Finance.
With shoppers looking for great deals and different pack sizes, the team [offering] We offer “value for money” with a focus on quality and convenience.
Pictured above are some Hain Celestial products. (Courtesy of Hain Celestial) (Photo by Vanja Savic)
Competition in the space is heating up, including from Walmart Inc.’s (WMT) upscale private-label Better Goods. Davidson said the company plans to step up promotional efforts in the third quarter and expand distribution to differentiate itself.
“Our goal is to have our marketing message be top of mind and our assortment be first to be found in distribution,” she said.
Distribution hubs like convenience stores could give companies an advantage as consumers look for healthier options on the go.
“We believe that convenience consumers [whether it’s] They’re looking for better options for you when it comes to dining opportunities and convenience,” she said.
John Baumgartner, managing director at Mizuho Securities, told Yahoo Finance that Walmart is not the only company knocking on Hayne’s door, nor is it the only company eyeing the gas station’s sales floor.
“Given the competition in this space, there is the UTZ brand… Boulder Canyon [is] “They’ve been very aggressive in distribution, and there are other brands in the category, including Fritos, Smartfood, Stacy’s and others looking to play in the natural and organic space,” he said.
Sales of Hain’s dining-out products, such as snacks and tea, grew by low double digits in fiscal 2024. The company increased the number of convenience store openings by 42% that year.
Davidson, a former executive at meat producer Tyson Foods (TSN), spice company McCormick (MKC) and Kellogg (now known as Kelanova (K) and WK Kellogg (KLG)), outlined a plan last fall to drive long-term growth and shareholder returns.
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Davidson, who took over as head of Haynes in January 2023, is aiming to deliver sustainable revenue and profit growth by fiscal 2027. The company is looking to restructure its supply chain, modernize its digital infrastructure and create a performance-driven culture.
As part of its turnaround plan, Hayne aims to save $130 million to $150 million a year through restructuring by 2027. In the first year since the plan was implemented, the company realized savings of $65 million, beating its target of $61 million.
The company expects flat or better net sales growth, mid-single-digit adjusted earnings growth and free cash flow of $60 million in fiscal 2025. The company’s shares jumped 19% on Tuesday.
But there are still skeptics on Wall Street after years of underperformance: Hain’s shares are down 28% so far this year.
CFRA analyst Arun Sundaram said in a client note that the company was “pleased with its recent performance” and “expects to achieve its fiscal 2027 targets,” but maintained a wait-and-see stance with a “hold” rating.
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Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter.Brooke DiPalma Or email me at bdipalma@yahoofinance.com
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