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Hain Celestial has issued a forecast indicating a decline in annual sales following a second quarter that did not meet the company’s expectations.
The organization, known for its brands such as Linda McCartney meat-free products and Celestial Seasonings tea, now anticipates a 2-4% organic decline in net sales.
In its first-quarter results disclosed in November, Hain Celestial had projected its annual organic net sales would be “flat or better” compared to the prior year.
According to CFO Lee Boyce, “Commercial execution and supply chain challenges drove second-quarter results that were below our expectations,” as stated on February 10.
The company, which owns the Terra snacks brand, has also revised its forecast for adjusted EBITDA. In November, the outlook suggested a mid-single-digit increase, but it now expects this metric to remain flat year-over-year.
During the second quarter, net sales dropped 9% to $411.5 million, with organic net sales declining by 7% for the period ending December 31. This decrease in organic sales was attributed to a 2% reduction from pricing and a 5% decline attributed to volume and mix factors.
Organic net sales fell across both North America and the company’s international segment.
As a result of the sales downturn, Hain Celestial reported a decline in gross profits. Additionally, a goodwill impairment totaling $91.3 million contributed to an operating loss of $91.9 million, compared to a modest operating loss of $781,000 in the same quarter of the previous year.
The company experienced a net loss of nearly $104 million for the second quarter, a significant increase from the $13.5 million loss reported during the corresponding period of the prior financial year.
In terms of adjusted net income, Hain Celestial reported $8 million, down from $11 million in the same quarter a year prior.
Declining snack sales significantly impacted the North American sector, while the personal care unit also saw diminished sales during the quarter.
Wendy Davidson, President and CEO, indicated that Hain Celestial is “exploring strategic options for our personal-care business.” She continued, “We believe this is the best path to focus the organization, simplify our business, and create long-term value for shareholders.”
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