The Hain Celestial Group, Inc. (NASDAQ:HAIN) reported fiscal second-quarter net sales of $384 million, a 7% year-over-year decline. The results prompted a decline in the stock price following the announcement.
Organic sales declined 7%, driven by a 9-point decrease in volume and mix, partially offset by a 2-point increase in pricing. The company reported a net loss of $116 million, or $1.28 per diluted share, compared to a loss of $104 million, or $1.15 per share, last year.
Adjusted net loss was $3 million, or 3 cents per share, missing analysts’ break-even estimate. Sales of $384.12 million beat the $383.28 million estimate.
During the quarter, Hain Celestial divested its North American snack business as part of its strategy to simplify the portfolio, strengthen the balance sheet, and improve margins and cash flow.
“We took bold steps to sharpen our portfolio and strengthen our balance sheet through the divestiture of our North American snack business, giving us greater financial flexibility alongside an improved margin and cash flow profile. Our core categories are stable, our operational execution is improving, and we demonstrated strong cash delivery in the quarter,” stated Alison Lewis, President and CEO.
“The actions underway across simplification, pricing, innovation, and productivity provide a clear path to sequential improvement in the back half of the year. We remain confident in our path forward.”
Segment Performance
North America saw a 10% organic sales decline, driven primarily by weak demand for snacks and baby formula. Gross margin was 20.6%, a 420-basis point decrease from the prior year period, and adjusted gross margin was 20.8%, a 440-basis point decrease from the prior year period.
International sales fell 3% on an organic basis, primarily driven by lower sales in baby & kids. Gross margin and adjusted gross margin were both 18.1%, each representing a 200-basis point decrease from the prior year period.
Adjusted EBITDA was $24 million, down from $38 million in the second-quarter fiscal 2025, reflecting margin pressure across both segments. Operating cash flow increased to $37 million from $31 million, and free cash flow rose to $30 million from $25 million last year.
The company ended the quarter with total debt of $705 million, unchanged from the start of the fiscal year. Net debt decreased to $637 million from $650 million.
HAIN Price Action: Hain Celestial Group shares were down 20.33% at $0.98 at the time of publication on Monday. The stock is trading at a new 52-week low, according to Benzinga Pro data.
Photo via Shutterstock