Worldwide natural and organic company is prepared for Brexit, but can’t control all the consequences, CEO Mark Schiller says.

Victoria A.F. Camron, Digital content specialist

August 29, 2019

2 Min Read
Hain Celestial reports lower sales, higher adjusted gross margin

Hain Celestial’s President and CEO Mark Schiller said Thursday morning that the company is on track to achieve its operational and financial objectives in fiscal 2020.

During the conference call in which he reported Q4 and year-end 2019 earnings, Schiller focused on the changes he’s made since becoming CEO in November, such as eliminating 350 low-performing SKUs; implementing a new trade management system; and restructuring operations in North America.

“While we have more work to do, we’re making good progress,” he said. Gross margin has increased for three consecutive quarters, he noted.

However, the results aren’t as positive as Schiller is. In Q4—which ended June 30—the company saw a net loss of $7.7 million, compared with a $4.6 million loss in the same period a year ago.

Comparing Q4 2019 with the same period in fiscal 2018, the company reported:

  • Net sales decreased a total of 10% to $557.7 million, with sales down 11.1% in the United States; 10.3% in the United Kingdom; and 6.5% in the rest of the world, which included Canada.

  • On a constant currency basis, total sales decreased 7.2%.

  • Gross profit was $106 million, down 15.3%.

  • Gross margin increased 120 basis points or 1.2% to 19%.

  • Adjusted gross margin was 23%, up 190 basis points or 1.9%.

  • Adjusted net income was $22.4 million, down 19%.

For fiscal 2019, Hain Celestial reported a net loss of $49.9 million, down $132.4 million or 160.6% from fiscal 2018’s income of $82.4 million. Other year-end results showed negative results as well:

  • Net sales were $2.3 billion, down 6.5% from fiscal 2018’s net sales of $2.46 billion.

  • On a constant currency basis, net sales decreased 4.2%.

  • Gross profit was $445.2 million, down 13.6% from $515.4 million.

  • Gross margin was 19.3%, down 170 basis points or 1.7%.

  • Adjusted gross margin was 21%, a 110 basis point decrease (-1.1%).

  • Adjusted net income of $68.7 million, down 43.4% from $121.3 in 2018.

A year ago, Hain Celestial Chief Financial Officer James Langrock announced that the company expected net sales in fiscal 2019 to total between $2.5 billion and $2.56 billion, an increase of 2%-4%.

For fiscal 2019, the company lost $53 million due to the volatility of the British pound, Schiller said. Business in the United Kingdom is growing, but income generated there is down 25% because of the uncertainty regarding Brexit.

About the Author(s)

Victoria A.F. Camron

Digital content specialist, New Hope Network

Victoria A.F. Camron was a freelance writer and editor contracted with New Hope Network from 2015 until April 2022, when she was hired as New Hope Network's digital content specialist—otherwise known as the web editor.

As she continues the work she has done for years—covering the natural products industry for NewHope.com and Natural Foods Merchandiser; writing up earnings calls and other corporate news; and curating roundups of trends and information for the website—she is thrilled to be an official part of the New Hope team. (She doesn't mind having paid holidays and vacations again, though!) Victoria also compiled and edited newsletters, and served as interim content director for Delicious Living in 2016.

Before working as a freelancer, she spent 17 years in community newspapers in Longmont, Colorado, and St. Charles and Wheaton, Illinois. Victoria is a Colorado native and a graduate of Metropolitan State College of Denver.

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