Hain Celestial swings to loss on production, distribution issues
Production and distribution issues contributed to The Hain Celestial Group Inc.'s net loss of $37.4 million in its first quarter of fiscal 2019, the Lake Success-based company said Thursday.
With a new CEO and president, Mark Schiller, who took the reins Monday, the organics and natural products company reported another challenging quarter, which ended Sept. 30.
“We need to manage complexity and drive out cost, we need to expand our distribution, deliver smart pricing and improve efficiency,” Schiller said during an earnings call with analysts Thursday.
In results released before the market opened, Hain reported that it swung to a net loss of $37.4 million in the first quarter, or 36 cents a share, from net income of $19.8 million, or 19 cents a share, in the same period last year.
The loss in continuing operations was $23.1 million, compared to net income of $18.6 million in the same period last year.
In February, Hain said it planned to sell its Hain Pure Protein poultry business, and that segment is being treated as a discontinued operation.
On Thursday, the company said it expected to divest that business by the third quarter of fiscal 2019.
Hain Pure Protein’s net sales in the first quarter were $113.5 million, a decrease of 5 percent compared to the prior year period.
Hain reiterated its sales guidance for fiscal 2019, when total net sales are projected to increase between 2 percent and 4 percent to between $2.5 billion to $2.6 billion.
Hain is expecting fiscal 2019 to be heavily back-weighted as it recovers from its production challenges and benefits from cost savings and brand investments.
Some analysts were skeptical of the reiteration of the 2019 guidance.
“We do not put much weight on the reiteration, for two reasons. First, Hain is only through one fiscal quarter. Second, and more importantly, the new CEO — Mark Schiller — only started with the company three days ago,” J.P. Morgan analyst Ken Goldman wrote in a note.
Hain Celestial’s stock price was down about 15 percent to $22.16 Thursday afternoon.
Tory N. Parrish covers retail and small business for Newsday. She has worked at the Pittsburgh Tribune-Review and Observer-Dispatch in Utica, N.Y.
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