Hain Celestial (HAIN, Financial) had a robust performance for the first quarter, mainly driven by increased demand for its healthy, better-for-you products. In fact this was the sixteenth consecutive quarter of double digit growth in sales and earnings. Led by its strong numbers, the stock surged to its 52-week high and seems well positioned for future growth. This clearly reflects the strength in the business and its vast product portfolio.
Looking beyond the challenges
During the quarter, the company had to face some challenges on account of MaraNatha nut butter recall as there were fears of salmonella contamination. Amid these rising concerns the company pulled its products back from consumers, retailers and warehouses. However, the management has reassured about the safety of its products.
According to Denise Sirovatka, Senior Brand Manager for MaraNatha,
“We use only the highest quality ingredients in all our nut butters and inspect every product for safety every step of the way -- from raw materials to the jarred nut butters that are delivered to your local grocery store."
This was a tough move for the company as it could mar its brand image badly. To its fortune no such incidence occurred and the consumption of MaraNatha nut butters have started rising again.
On the bright side Hain benefited from its domestic and international operations with strong results in the U.S., U.K, Europe and Canada. Its acquisitions are also yielding good results, which will be a leading contributor to its balance sheet in the days ahead. Its expansion into India with Tilda is also encouraging and considering this, it plans to enter into Middle East and many other countries where its products were not previously sold.
Hain also launched non-dairy frozen dessert business in the UK and the management expects its plant-based milk business to roll out on a much larger spectrum in the region. Various other brands such as cully and sully, Ella’ kitchen performed quite well and the same momentum could continue in the coming months.
Its portfolio of healthy products has played a significant part to drive the year over year growth. As consumers become more and more aware of a healthier lifestyle and its benefits, their tastes and preferences are changing. Interestingly Hain was the first company to capitalize on this opportunity and it intends to take this growth further. Its products are not only found at food store or grocery stores but across mass-market convenience stores and white tablecloth restaurants among others. Moreover, its e-commerce channel is a great platform to lure the millennials, and the company continues to grow in it.
Conclusion
Going forward, Hain anticipates strong growth in brands such as Natumi, Danival and others in the European market. It expects a sale of more than 1.5 million organic and antibiotic free turkeys for Thanksgiving. Apart from its organic growth, the company is also exploring all possibilities of profitable acquisitions. In addition, it will continue to focus on its e-commerce platform, while enhancing its distribution and supply chain.
