Hain Celestial advances turnaroudn strategy with portfolio cuts, US$115M snack sale and debt reduction push
Hain Celestial continues its turnaround strategy with major portfolio divestitures, cost discipline and debt reduction as sales decline across North America and international markets.
USA – Hain Celestial Group is entering a new phase of its turnaround strategy focused on innovation-led growth and functional health positioning, marking a shift away from years of cost-cutting, SKU rationalisation and asset disposals.
The company has also moved to streamline its portfolio in North America, with Chief Executive Officer Alison Lewis—who assumed the role permanently in December—overseeing plans to reduce the group’s US food and beverage portfolio by around 30%.
A key step in this strategy was the sale of its North American snacks business, including brands such as Garden Veggie, Terra chips and Garden of Eatin’, which was sold in February to Canada-based Snackruptors for $115 million.
The disposal resulted in a pre-tax loss of US$51 million in the third quarter ended 31 March, contributing to total net losses of US$106 million for the period. The loss narrowed from US$135 million recorded a year earlier.
The company also recorded US$46 million in non-cash impairment charges linked to goodwill, intangible assets and assets held for sale.
Adjusted for the snacks divestiture, Hain Celestial reported a bottom-line loss of US$1 million compared with a US$6 million profit in the same period last year.
Sales performance also weakened during the quarter. Reported revenue fell 13% to US$338 million, while organic sales declined 6%, with overall volume/mix down 11 percentage points.
Lewis said: “Third-quarter results reflect improving execution and financial discipline as we continued to strengthen our foundation and advance our turnaround strategy.”
She added: “Strong cash generation and debt reduction materially improved our financial position, while the completion of the North American snacks divestiture further enhances our margin and cash flow profile going forward.”
Adjusted EBITDA stood at US$26 million, down from US$34 million a year earlier, while earnings per share remained negative at US$1.17 compared with a loss of US$1.49 previously.
The company also reported progress in balance sheet strengthening, with total debt reduced to US$549 million from US$705 million at the start of the financial year. Free cash flow improved to US$35 million, compared with an outflow of US$2 million in the prior-year quarter.
By segment, North America organic sales declined 3% to US$171 million, while international sales fell 8% to US$167 million, driven by weakness in meal preparation, baby and kids categories.
Lewis said: “Our near-term priorities remain the same: optimise cash, strengthen the balance sheet, improve profitability, and stabilise sales, while our five actions to win position Hain for sustainable, profitable growth.”
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