Health and wellness company Hain Celestial has reported a 9% year-on-year decline in net sales, to $411 million (€398.67 million), in the second quarter of its financial year.
The Cully & Sully parent saw organic net sales decline 7% in the same period due to a five-point decrease in volume/mix and a two-point decrease in price.
Adjusted gross profit margin stood at 22.9%, reflecting a 60-basis point decrease from the prior year period.
Adjusted EBITDA amounted to $38 million (€36.86 million), down from $47 million (€45.59 million) in the second quarter of its previous financial year, while adjusted EBITDA margin fell to 9.2% from 10.4% in the year-ago period.
Wendy Davidson, president and chief executive of Hain Celestial, stated, “Despite challenges in the quarter, we generated strong operating cash flow and further reduced debt. We drove sequential improvement in the baby and kids [segment] and our largest category, meal prep.
“However, sales growth in the quarter was hindered by poor in-store performance in snacks, driven by marketing and promotion effectiveness, and supply chain challenges, both of which we have already taken steps to address."
Divisional Highlights
In North America, organic net sales fell 9% year-on-year, driven primarily by lower sales in snacks and personal care categories.
Gross profit for the region declined 8% year on year in the second quarter to $57 million (€55.29 million), while adjusted EBITDA declined to $25 million (€24.25 million) from $31 million (€30.07 million) in the prior year period.
The international segment registered organic net sales decline of 4% as sales declined in meal prep and the division faced short-term service challenges.
Gross profit in the second quarter was $37 million (€35.89 million), a 9% decline from the prior year period, while adjusted EBITDA fell 13%, to $23 million (€22.31 million).
Outlook
Hain Celestial has revised its guidance for full year 2025 and cut its organic net sales growth forecast to 2%-4%.
Adjusted EBITDA is expected to be flat year-on-year, while gross margin is expected to increase by at least 90 basis points, it noted.
It expects free cash flow of at least $60 million (€58.20 million).
Lee Boyce, chief financial officer of Hain Celestial, stated, “Commercial execution and supply chain challenges drove second-quarter results that were below our expectations. We have already taken steps to address these challenges and remain focused on disciplined execution.
“Recent distribution wins and the recovery of our infant formula supply bolster our belief that we are well positioned to pivot to growth in the back half of the year, however, given performance to date and the challenging macroeconomic backdrop we are adjusting our full-year outlook.”
