New York-based organic and natural products company The Hain Celestial Group, Inc has reported first-quarter sales for the period ending 30 September 2019 that decreased seven percent to US$482.1 million (or five percent at constant currency compared to the prior-year period). The company revealed that it would ramp up its new product pipeline with a new Celestial Seasonings TeaWell range and is eyeing off the meat alternative market and plans to test plant-based foods in the U.S.
The Hain Celestial Group’s president and CEO Mark L. Schiller told an analyst conference call on November 7 that the company has developed a “robust, multi-year pipeline.” The company said that it plans to launch new products such as Celestial Seasonings TeaWell, a health and wellness tea infused with herbs and botanicals, yogurt, snacks, and plans to test plant-based foods in the U.S. that would complement its existing UK Linda McCartney brands and Canada’s Yves plant-based business.
Hain Celestial has completed seven divestitures since February, Mr. Schiller said. The company sold its Tilda basmati rice brand to Spain’s Ebro Foods in August for US$342m and further trimmed its portfolio by selling off brands such as the Hain Pure Protein division, Arrowhead Mills, SunSpire, and WestSoy Tofu.
Hain Pure Protein and Tilda rice operating segments were treated as discontinued operations as Hain Celestial continues to divest underperforming products.
"We are pleased to report strong first-quarter results that are consistent with both our fiscal year 2020 guidance and the long-term strategy we announced at our Investor Day last February," Mr. Schiller said. "Our transformational strategic plan to simplify the portfolio and strengthen capabilities, while expanding margins and cash flow is on track, and we are confident in our ability to reinvigorate top-line growth over time.”
Hain Celestial said in its first-quarter results from continuing operations that, when adjusted for foreign exchange and acquisitions, divestitures, and certain other items, including the stock-keeping unit (SKU) rationalization, net sales decreased one percent compared to the prior-year period. The adjusted gross margin was 20.9 percent, a 240 basis point increase over the prior-year period. The adjusted EBITDA margin was 6.7 percent, a 110 basis point increase compared to the prior-year period.
The Hain Celestial Group has operations in North America, Europe, Asia, and the Middle East. The company now operates under two reportable segments: North America and International. Prior period segment information included herein has been adjusted to reflect the company's new reporting structure.
North America net sales in the first quarter were $271.7 million, a decrease of 7 percent over the prior-year period. When adjusted for acquisitions, divestitures, and certain other items, including the SKU rationalization, net sales decreased one percent over the prior-year period.
International net sales in the first quarter were $210.4 million, a decrease of 7 percent over the prior-year period. When adjusted for foreign exchange and acquisitions, divestitures, and certain other items, net sales were flat compared to the prior-year period.