Hain Celestial Plans Major Overhaul As Losses Widen Sharply

Global food and beverage conglomerate Hain Celestial reported a “disappointing” fourth quarter as it embarks on a “product renovation review” and significant SKU rationalization program.

• Q4 net sales were $363 million, down 13% year-over-year.
• Gross profit margin and adjusted gross profit margin were 20.5%, representing a 290-basis point decrease from the prior year period.
• Adjusted EBITDA was $20 million, falling 50% from Q4 2024.

“Previous leadership focus had leaned heavily towards building structure, strategy and process, but we now need to dial up execution and delivery,” said interim president and CEO Alison Lewis during an earnings call Monday. Lewis took over from Wendy Davidson in May after the company embarked on a large-scale restructuring process.

“Hain built a global operating model designed to support a much larger business, which had the side effects of both inflating our cost structure and slowing down decision making, rendering us less nimble and less profitable,” Lewis said.

As inflation swept over in the industry in recent years, Hain did not move quickly enough to take pricing actions to offset losses, she added. “Productivity gains were absorbed by inflation rather than being reinvested in the business or used to expand margins.”

Snacks were a key pain point with FY2025 sales growth falling 20% year-over-year. Lewis said that Hain Celestial had “fallen behind the competitive set” and would be implementing a “massive renovation” that includes an innovation pipeline highlighting better-for-you attributes like no seed oils and real cheese.

Despite heavy distribution losses, Lewis argued that Hain had “good equity” in the set and had begun investing heavily in digital and social marketing campaigns where it had little visibility at the beginning of the year.

“Clearly, the Snacks performance has not been where we want it to be,” Lewis said. “While very early days, we are seeing some very preliminary green shoots as we get the right product in the right package at the right retailer, and we’re seeing that that velocity is starting to improve on a period-to-period basis.”

Hain intends to assess, add and retire various SKUs across its portfolio as it seeks to “capture efficiencies across the value chain and drive margin expansion,” Lewis said. She pointed to the decision to slim down its tea portfolio from 91 blends to 55 over the next two years.

Along with SKU rationalization, Hain is implementing new pricing actions that began in its International segment over the quarter. In August, Hain began raising prices in North America, starting with “key baby and kids categories,” and will move onto Meal Prep in Q2.

Hain has also eliminated the North America president role previously held by Chad Marquardt. Lewis will be absorbing the position’s responsibilities moving forward.

The North America segment sales fell 16% year-over-year in FY2025, compared to a 1% dip for International. On the whole, FY2025 net loss was $531 million, compared to a loss of $75 million in the prior year.

In light of its portfolio restructuring, Hain would not disclose any forecasts or earnings expectations for FY2026, but there will be “aggressive cost cutting and execution” to drive stronger top- and bottom-line performance in the second half of the year as compared to the first half for Q1,” said CFO Lee Boyce.

“We’re really focusing on inventory,” Boyce added in response to an analyst’s question during the earnings call. “We do see some big potential there through more disciplined management there.”

At $1.60 per share, Hain Celestial’s stock price was down by as much as 25% in late-morning trading on Monday from the previous close.