Hain Celestial has conceded sales will likely fall this year as it downgraded guidance after missing expectations in a poor second quarter.
The owner of brands including Linda McCartney’s and Ella’s Kitchen saw revenues fall 9% to $411m in the second quarter to 31 December, compounding significant losses earlier in the year.
As a result, it downgraded its forecast for the full year and is now predicting sales will fall between 2% and 4%. It previously said they would be “flat or better”.
Earnings are crumbling at the struggling consumer goods company, with operating losses topping $91m in the quarter, up from $781k in the same period a year ago. This meant a net loss of $1.15 per share, down from a $0.15 loss a year earlier.
The poor performance was primarily driven by lower sales in its snacks division, which suffered on weak commercial execution and supply chain challenges, the company said.
CEO Wendy Davidson maintained, however, that actions had been taken to correct this and, combined with other tactical improvements, sales would return to growth in the second half of the year.
Yet investors remained unimpressed, sending the company’s share price down over 10% yesterday. It brought the decline to almost 60% for the past 12 months.
Davidson launched a new strategy for the company after taking over in 2023, pledging to simplify operations, pivot sales to growth, and encourage long-term profitability.
As part of its ongoing simplification, it is now exploring a sale of its personal care business, made up of four brands including Avalon Organics and Alba Botanica. This will allow it to focus on its core food and drink operations.
Personal care sales fell 38% in the second quarter, driven primarily by reduction in SKU numbers.
Davidson has overseen a pruning of other minor businesses at Hain, including the sale of snack brand ParmCrisps to Our Home last year, and Thinsters cookie business to Icee beverage maker J&J Snack Foods.
“Commercial execution and supply chain challenges drove second quarter results that were below our expectations,” said CFO Lee Boyce.
“We have already taken steps to address these challenges and remain focused on disciplined execution. Recent distribution wins and the recovery of our infant formula supply bolster our belief that we are well-positioned to pivot to growth in the back half of the year.”
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