Hain Celestial Stock Slumps 31.4% in 2018


Aug. 21 2018, Updated 3:15 p.m. ET

Why HAIN stock is on a downtrend

On August 17, Hain Celestial (HAIN) stock was down 31.4% on a YTD (year-to-date) basis. HAIN stock isn’t expected to get a boost from its upcoming fiscal fourth-quarter results, as analysts’ projections are downbeat.

Hain Celestial faces multiple challenges. Escalating freight and commodity costs remain the primary concern for all packaged food manufactures. Plus, the company’s US segment is under pressure as certain brands are underperforming. In the fiscal third quarter, its US segment net sales were negatively impacted by the weakness of top brands like Spectrum, The Greek Gods, and Sensible Portions.

Higher costs and stiffening competition in the packaged food space has dealt a blow to the stock prices of most food manufactories. On a YTD basis, the stock prices of Campbell Soup (CPB), ConAgra (CAG), and General Mills (GIS) fell 12.6%, 0.5%, and 20.4%, respectively.

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Can HAIN stock reverse its declines?

Hain Celestial (HAIN) is simplifying its operations, which is widely viewed as an effort to attract a potential buyer. As a part of its simplification, Hain Celestial has stated that it’s on track to sell its Hain Pure Protein business by the first half of fiscal 2019.

Also, the company’s leadership has undergone a transformation. In June, Hain Celestial announced that it was looking for a new CEO. The current CEO, Irwin D. Simon, is expected to shift to the position of non-executive chairman of the board and assist in the smooth transition to new leadership.

To boost sales of the US segment, the company has added another 430 SKUs to its streamlining list, taking the total count to 1,100 SKUs. This rationalization is expected to negatively impact its US segment sales in the fiscal fourth quarter by 4.0%.

Also, the company is investing in marketing its brands and is also expanding distribution for Earth’s Best, Arrowhead, and Celestial Seasonings products. The company is also focused on driving its e-commerce sales in the United States. However, these initiatives are taking time to yield the desired results.

Hain Celestial expects its fiscal 2018 sales to reach $2.43 billion–$2.5 billion. In contrast, the company had reported sales of $2.85 billion for fiscal 2017.


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