Things To Know Prior To Hain Celestial's (HAIN) Q2 Earnings

The Hain Celestial Group, Inc. (NASDAQ:HAIN) is scheduled to release second-quarter fiscal 2020 results on Feb 6. This organic and natural products company delivered a positive earnings surprise of 14.3% in the preceding quarter. Investors are counting on another beat by Hain Celestial in the to-be-reported quarter.

The Zacks Consensus Estimate for earnings is pegged at 15 cents, suggesting growth of about 7% from the year-ago quarter’s tally. Moreover, the consensus estimate for revenues is pinned at $499.3 million, which indicates a decline of 14.5% from the year-ago quarter’s reported figure.

The Hain Celestial Group, Inc. Price and EPS Surprise

The Hain Celestial Group, Inc. Quote

Key Factors to Note

We note that Hain Celestial has been benefitting from its focus on transformation strategy and Project Terra efforts, which might show on its second-quarter earnings performance. Notably, the strategy is focused on simplifying portfolio, solidifying key capacities, enhancing margins, reviving top-line growth and driving cash flows. Moreover, divestiture of the company’s underperforming units to focus on areas with better potential is encouraging. Meanwhile, Project Terra efforts are aimed at cutting costs and improving margins. The company had earlier guided improvement in adjusted gross margin as well as adjusted EBITDA margin in the quarter compared with the prior-year period.

However, any deleverage in selling, general and administrative expenses and commodity inflation cannot be ignored. Further, foreign currency headwind remains.

Additionally, sluggish performance in the company’s North America and International segments has been dampening top-line performance. In the last earnings call, management projected a contraction in overall net sales for the first half of fiscal 2020 with rate of decline to be similar to the second half of fiscal 2019 due to continued reduction in uneconomic spending and SKU rationalization.