USA – Hain Celestial, a US- based organic and natural products company, has revised its full-year organic growth guidance to 1%, down from the previously projected range of 2% to 4%.

The adjustment comes in response to ongoing challenges in the company’s baby-formula segment, particularly in the US market.

The second-quarter results also revealed efforts by Hain Celestial’s CEO, Wendy Davidson, to streamline the product portfolio through SKU simplification under the Hain Reimagine transformation initiative.

The North America sales of Hain Celestial experienced a 5.2% decline, amounting to US$267.7 million, primarily attributed to lower sales in the baby formula segment.

The challenges in this sector were described as “short-term,” with expectations of recovery following industry-wide issues impacting organic formula supply. Despite the decline, the company noted improvement compared to the 9.8% drop reported in the first quarter.

Hain Celestial’s strategic transformation involves trimming lower-margin SKUs and optimizing promotional strategies, which impacted snack sales in North America.

The company adjusted its guidance for adjusted EBITDA to US$155-160 million, down from the previous range of $155-165 million, and revised the free cash flow outlook to US$40-45 million, compared to the initial projection of $50-55 million.

While facing challenges in the baby-formula and snack segments, Hain Celestial reported strength in the baby and kids sector, particularly in baby food and purees.

The company’s focus areas include baby and kids, snacks and meal-prep, beverages, and personal-care products, as part of its Reimagined 2027 strategy.

Wendy Davidson stated that Hain Reimagined is in its “foundational year,” with incremental investments planned for the build pillar in the latter half of the year to support accelerated growth.

The company plans to accelerate simplification initiatives related to SKUs and footprint in the fourth quarter of fiscal 2024.

Financially positioned to implement these changes, Hain Celestial’s CFO, Lee Boyce, mentioned an increased investment in Q3, anticipating a sequential improvement in volume.

Analysts have noted early signs of progress and positive growth expectations in the second half of the fiscal year, acknowledging the transformative journey outlined in Hain Celestial’s Reimagined strategy.

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