Hain Celestial is forecasting its annual sales will decline after a second quarter that missed the US group’s expectations.
The company, home to brands including Linda McCartney meat-free and Celestial Seasonings tea, now sees its net sales falling 2-4% on an organic basis.
When Hain Celestial reported its first-quarter results in November, the group said it expected its annual organic net sales to be “flat or better” versus its previous year.
“Commercial execution and supply chain challenges drove second-quarter results that were below our expectations,” CFO Lee Boyce said today (10 February).
The Terra snacks brand owner also lowered its forecast for “adjusted EBITDA”. In November, the company predicted a “mid-single-digit” rise. It now forecasts that metric will be “flat year-over-year”.
Second-quarter net sales fell 9% to $411.5m. Organic net sales were down 7% during the period, which ran to 31 December. Hain Celestial said the drop in organic sales came amid a 2% dip from pricing and a 5% decrease from “volume/mix”.
Organic net sales were down in North America and from the group’s “international” division.
Hain Celestial reported lower gross profits on the back of the decline in sales. A goodwill impairment of $91.3m also contributed to the company generating an operating loss of $91.9m. A year earlier, Hain Celestial posted a second-quarter operating loss of $781,000.
It reported a net loss of just under $104m for the second quarter, compared to one of $13.5m in the corresponding period of the previous financial year.
Hain Celestial said its “adjusted” net income was $8m, compared to $11m in the prior-year period.
Lower snacks sales hit the group’s North America business during the quarter but the company also saw sales from its personal-care unit decline.
President and CEO Wendy Davidson said Hain Celestial is “exploring strategic options for our personal-care business”.
She added: “We believe this is the best path to focus the organisation, simplify our business, and create long-term value for shareholders.”
