Terra Chips Maker Hain Celestial Seeks Strategic Options For Business, Announces CEO Transition, Stock Tanks

Shares of food and personal-care company Hain Celestial Group Inc. HAIN are trading lower on Wednesday following the third-quarter earnings result.

The company reported a third-quarter FY25 revenue decline of 11% year-on-year to $390.35 million, missing the analyst consensus estimate of $4411.62 million. Adjusted EPS of $0.07 missed the consensus estimate of $0.13.

Organic net sales from North America decreased 10% Y/Y, primarily driven by lower sales in snacks and baby & kids.

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International organic sales gained 0.5%, driven by growth in meal prep and baby & kids and the supply chain recovery from the service issues discussed last quarter.

The Terra Chips maker adjusted gross margin for the quarter contracted 50 basis points Y/Y to 21.8%. The operating loss for the quarter was $121.1 million versus a loss of $27.9 million last year.

Adjusted EBITDA was $34 million compared to $44 million in the prior year period. The adjusted EBITDA margin was 8.6%, compared to 10% in the prior year.

The company held $44.4 million in cash and equivalents as of March 31, 2025. Operating cash flow for the quarter was $5 million, with a free cash flow of $(2) million.

Net debt at the end of the fiscal second quarter was $665 million compared to $690 million at the beginning of the fiscal year.

CEO Transition

Hain announced that Wendy Davidson will depart as President, Chief Executive Officer and member of the Board of Directors, effective Wednesday.

"We are disappointed with our third quarter results, which fell far short of our expectations primarily due to worse-than-expected performance in North America," stated Interim President and CEO Alison Lewis.

Business Strategic Review

Hain also said that the Board is conducting a comprehensive review of the company's portfolio with the assistance of its independent financial advisor, Goldman Sachs & Co. 

"Going forward, we are focused on five key drivers for improving value: simplifying our business and reducing overhead spending, accelerating renovation and innovation in our brands, implementing strategic revenue growth management and pricing actions, driving operational productivity and working capital reduction, and strengthening our digital capabilities."

Outlook For FY25

Hain Celestial expects FY25 organic net sales to decline 5% – 6%.

Adjusted EBITDA is expected to be approximately $125 million. Gross margin is expected to be approximately 21.5%.

Hain sees free cash flow of about $40 million.

Price Action: HAIN shares traded lower by 49.50% to $1.40 at the last check on Wednesday.

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