Executive Summary
The Hain Celestial Group reported a seasonally modest QQ1 2025 with a 5% organic net sales decline and a net loss as the company continues to execute the Hain Reimagined program. Management reaffirmed FY2025 guidance and highlighted progress across the four pillars—Focus (portfolio simplification and North America operating model redesign), Fuel (productivity, revenue growth management, and working capital optimization), Build (channel expansion and e-commerce), and Innovation (new product introductions and master brand campaigns). Despite a difficult first quarter driven by promotional timing shifts in Snacks, supply disruptions in Earth’s Best infant formula, and lingering cost pressures, Hain projects a back-half acceleration driven by the reinstated infant formula supply, promotional activity shifts, and broader distribution gains. Free cash flow is expected to improve with productivity and working capital improvements, supporting debt reduction. The combination of stabilized operations, improving gross margins, and a disciplined capital allocation plan underpins a cautiously constructive view, though execution risk and macro headwinds remain meaningful headwinds to sustained profitability.
Key Performance Indicators
QoQ: -16.73% | YoY:-2.78%
QoQ: -74.58% | YoY:234.02%
QoQ: -569.49% | YoY:-89.50%
QoQ: -572.78% | YoY:-83.33%
Key Insights
Revenue: $394.6 million in Q1 FY2025, down 7.16% YoY and 5.78% QoQ. Gross profit: $81.61 million; gross margin 20.68% (YoY -2.78%, QoQ -16.73%). Operating income: $3.05 million; operating margin 0.77% (YoY +234%, QoQ -74.6%). EBITDA: $9.19 million (adjusted EBITDA: $22.0 million; EBITDA margin 2.33%); Net income: $(19.66) million; net margin -4.98% (YoY -89.5%, QoQ -569%). EPS: $(0.22) per share (YoY -83.3%, QoQ -572.8%). Free cash flow: $(16.54) million; cash from operations $(10.79) million; c...
Financial Highlights
Revenue: $394.6 million in Q1 FY2025, down 7.16% YoY and 5.78% QoQ. Gross profit: $81.61 million; gross margin 20.68% (YoY -2.78%, QoQ -16.73%). Operating income: $3.05 million; operating margin 0.77% (YoY +234%, QoQ -74.6%). EBITDA: $9.19 million (adjusted EBITDA: $22.0 million; EBITDA margin 2.33%); Net income: $(19.66) million; net margin -4.98% (YoY -89.5%, QoQ -569%). EPS: $(0.22) per share (YoY -83.3%, QoQ -572.8%). Free cash flow: $(16.54) million; cash from operations $(10.79) million; capex $(5.76) million. Balance sheet: total assets $2.1348 billion; cash $56.9 million; net debt $762.4 million; total liabilities $1.1711 billion; total stockholders’ equity $963.7 million. Key liquidity ratios indicate current ratio ~2.01, quick ratio ~1.05, and cash ratio ~0.20. DPO improved to 55 days; DIO to 80 days; targeted DPO >70 days and DIO <55 days by FY27. The company maintains a pathway toward mid-to-high 3x net leverage by year-end as per management guidance.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
394.60M |
-7.16% |
-5.78% |
| Gross Profit |
81.61M |
-2.78% |
-16.73% |
| Operating Income |
3.05M |
234.02% |
-74.58% |
| Net Income |
-19.66M |
-89.50% |
-569.49% |
| EPS |
-0.22 |
-83.33% |
-572.78% |
Key Financial Ratios
operatingProfitMargin
0.77%
operatingCashFlowPerShare
$-0.12
freeCashFlowPerShare
$-0.18
Management Commentary
- Strategy execution and cadence: Hain Reimagined pillars (Focus, Fuel, Build, and Innovation) are driving structural changes and cost productivity. Wendy Davidson emphasized that the first quarter is seasonally the smallest and that the back-half should benefit from ongoing initiatives. Quote: We reaffirm our fiscal 2025 guidance and have a clear line-of-sight to growth in the back half of fiscal 2025 with a number of initiatives in place, including promotional activity in snacks that shifted into the third quarter, the return to full supply and rebuild of our Earth's Best infant formula business, the ramp-up of key brand campaigns, and the lapping of our portfolio simplification initiatives primarily in personal care. (Wendy Davidson)
We have a clear line-of-sight to growth in the back half of fiscal 2025 with a number of initiatives in place, including promotional activity in snacks that shifted into the third quarter, the return to full supply and rebuild of our Earth's Best infant formula business, the ramp-up of key brand campaigns, and the lapping of our portfolio simplification initiatives primarily in personal care.
— Wendy Davidson
We continue to expect fiscal 2025 organic net sales to be flat or better. Adjusted EBITDA to grow by a mid-single-digit percentage. Gross margin to expand by at least 125 basis points and free cash flow of at least $60 million.
— Lee Boyce
Forward Guidance
- Management reaffirmed FY2025 guidance: organic net sales flat or better; adjusted EBITDA to grow by a mid-single-digit percentage; gross margin to expand by at least 125 basis points; free cash flow of at least $60 million. They expect a back-half acceleration driven by: (1) Snacks promotional timing shifts moving into Q3 and additional promotional activity; (2) full recovery of Earth’s Best infant formula supply; (3) distribution gains and brand-building campaigns; (4) lapping portfolio simplification initiatives in Personal Care; (5) continued emphasis on RGM, working capital optimization, and productivity. The cadence anticipates ~40% of EBITDA in H1 and ~60% in H2, with sequential EBITDA improvement each quarter. Assessment: The plan is credible if the back-half catalysts materialize as expected and cost actions remain on track, but the path remains sensitive to supply restoration, consumer demand, and channel execution risk. Key monitoring points include Snacks promotions timing, formula supply normalization, brand campaign ROIs, and working capital progression.