Hain Celestial hits record sales despite a recall

Lake Success-based Hain Celestial Group Inc. Thursday reported record first-quarter sales driven by brand growth and international acquisitions, despite a reduction in revenue from a nut butter recall.

The organic and natural products company, with brands including Celestial Seasonings, Earth's Best, Terra and Spectrum, posted net sales for the first quarter of $631.3 million, up from $477.5 million in the same quarter a year ago. Revenues were adjusted $11.37 million lower due to the nut butter recall.

U.S. net sales grew to $336.9 million, from $312 million a year earlier, an increase of nearly 8 percent.

"We are pleased with another strong start to our fiscal year . . . with the highest quarterly net sales in the company's history," Irwin D. Simon, founder and CEO of Hain Celestial, said in a statement. "Our diverse portfolio of brands and products across multiple categories and our customer base across various channels of distribution enabled us to deliver double-digit sales growth even with the impact of the nut butter recall initiated in August."

Net income for the first quarter was $18.9 million, including a $14.2 million after-tax charge for the recall, compared with $27.7 million in the corresponding period in 2013.

Earnings per diluted share were 37 cents, a 36 percent decrease from the prior year's first quarter. Adjusted net income was $34.7 million, or 68 cents a share.

Behind the adjusted numbers is Hain Celestial's nSpired Natural Foods subsidiary, which initiated a voluntary recall in August of peanut and almond butters because of possible salmonella contamination.

The nut butters were sold under the brand names Arrowhead Mills Peanut Butters, MaraNatha Almond Butters and Peanut Butters, and private-label brands for Whole Foods, Trader Joe's, Kroger and Safeway.

The growth in net sales was driven partly by sales at Tilda, a basmati and specialty rice products company based in the United Kingdom, and Rudi's Organic Bakery, an organic and gluten-free bread and baked goods company in Colorado, acquired earlier this year.

It was also attributed to Hain Pure Protein Corp., a Pennsylvania-based organic and antibiotic-free poultry producer of FreeBird chicken and Plainville Farms turkey, acquired in July.

Hain Celestial reiterated its revenue forecast for fiscal 2015 of net sales ranging from $2.73 billion to $2.80 billion, an increase of about 27 percent to 30 percent.

"We believe we are well positioned for another record year and future long-term growth," Simon said.

Shares of Hain Celestial rose $2.18, or 2.06 percent, to close at $107.84 Thursday.