Hain Celestial (HAIN) Down 29.8% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Hain Celestial (HAIN). Shares have lost about 29.8% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Hain Celestial due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for The Hain Celestial Group, Inc. before we dive into how investors and analysts have reacted as of late.

Hain Celestial Posts Loss in Q2 Earnings, Sales Decline Y/Y

Hain Celestial posted second-quarter fiscal 2026 results, with the top and bottom lines declining year over year. The top line surpassed the consensus mark and the bottom line met the same.

More on Hain Celestial’s Q2 Results

The company posted an adjusted loss of 3 cents per share. The bottom line declined from adjusted earnings of 8 cents in the year-ago quarter.

Net sales of $384.1 million beat the consensus estimate of $383 million, declining 6.7% year over year. Organic net sales also decreased 7%, led by a 9-point decline in the volume and mix, partially offset by a 2-point benefit from pricing actions.

Adjusted gross profit declined to $74.9 million from $94.3 million in the prior-year quarter. The adjusted gross margin contracted 340 basis points year over year to 19.5%, driven by cost inflation, unfavorable fixed-cost absorption, and lower volume and mix, partially offset by productivity gains and pricing.

SG&A expenses were $60.9 million, down 13.2% from $70.2 million in the year-ago quarter, reflecting lower employee-related expenses and disciplined management of non-personnel costs following the implementation of overhead reduction actions. As a percentage of net sales, this metric decreased 110 bps year over year to 15.9% in the quarter under review.

Adjusted EBITDA was $24.3 million, down 35.9% from $37.9 million in the prior-year quarter. The adjusted EBITDA margin decreased 290 basis points year over year to 6.3%.

HAIN’s Q2 Revenue & Profit Insights by Segments

Net sales in the North America segment dropped 13.7% year over year to $197.8 million. Organic net sales declined 10.3% due to weakness in snacks and baby formula, partly offset by growth in beverages. Adjusted gross profit in North America came in at $41.2 million, down 28.8% from the prior-year quarter.

The adjusted gross margin contracted 440 basis points to 20.8%, hurt by lower volume and mix, cost inflation, and unfavorable fixed-cost absorption, though productivity savings and pricing provided some cushion.

Adjusted EBITDA for the segment dropped 56.9% to $10.9 million from $25.3 million in the year-ago period. The decrease was primarily attributable to a lower gross margin, as noted above, and was partially offset by reduced SG&A expenses. Consequently, the adjusted EBITDA margin declined 550 basis points year over year to 5.5%.

Net sales in the International segment totaled $186.3 million and marking a year-over-year increase of 2.3%, benefiting from foreign currency tailwinds. However, organic net sales slipped 2.7% due to softness in baby and kids.

Adjusted gross profit decreased 7.8% to $33.7 million. The adjusted gross margin contracted 200 basis points to 18.1%. The margin contraction was primarily driven by cost inflation, unfavorable fixed-cost absorption, and lower volume and mix, partially offset by productivity savings and pricing.

Adjusted EBITDA declined 15.7% to $19 million from $22.5 million in the prior-year quarter, primarily reflecting the lower gross margin noted above. The adjusted EBITDA margin fell 220 basis points to 10.2%.

Hain Celestial’s Categorical Sales Details

In the Snacks category, organic net sales plunged 19.9% year over year due to distribution losses and velocity challenges in North America. Organic net sales in Baby & Kids fell 14.2%, reflecting industry-wide softness in purees in the U.K. and formula in North America. Beverages were a relative bright spot, with organic net sales rising 2.6%, driven by growth in tea in North America. For Meal Prep, organic net sales edged down 0.9%, as strength in yogurt in North America was mostly offset by weakness in spreads and drizzles in the U.K.

HAIN’s Financial Snapshot: Cash, Debt & Equity Overview

The company closed the quarter with cash and cash equivalents of $68 million, long-term debt (excluding the current portion) of $0.4 million, and total shareholders’ equity of $330.2 million. Net cash provided by operating activities was $37 million for the quarter compared with $30.9 million in the prior-year period.

The free cash flow for the quarter was an inflow of $30 million compared with an inflow of $24.5 million in the prior-year period. Capital expenditure (CapEx) totaled $7 million for the quarter compared with $6.4 million in the prior-year period. The company expects capital expenditure in the low $20-million range for fiscal 2026.

HAIN’s FY26 Outlook

The company is not providing numeric guidance for fiscal 2026 operating results at this time due to uncertainty regarding the timing of completion of the strategic review. The company intends to provide pro-forma financial information upon the closing of the North American Snacks divestiture, which is expected in February. The company expects the divestiture of North American Snacks to be gross margin and EBITDA-accretive. Following the divestiture, the go-forward North American portfolio is expected to generate a gross margin above 30% and an EBITDA margin in the low-double digits.

HAIN’s Operating Expectations

For fiscal 2026, the company expects strong cost management and productivity, supported by execution against its five actions to win in the marketplace. These efforts are expected to drive stronger top and bottom-line performances in the second half of the year than in the first half. For the full fiscal year, the company continues to expect positive free cash flow.

The company remains focused on strengthening its financial position through initiatives designed to stabilize sales, improve profitability, optimize cash flow and reduce debt. The strategic review and the agreement to divest the North American Snacks business represent important steps in this process, and the company continues to advance additional actions. With solid liquidity, strong cash generation in the quarter and positive free cash flow expected in fiscal 2026, the company remains confident in its ability to deliver improved performance in the second half of the year and beyond.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

The consensus estimate has shifted -133.33% due to these changes.

VGM Scores

At this time, Hain Celestial has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for value investors.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Hain Celestial has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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The Hain Celestial Group, Inc. (HAIN): Free Stock Analysis Report

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