Yahoo Finance Hain Celestial (HAIN) Chalks Out Path to Operational Efficiency
Hain Celestial Group HAIN has announced significant strategic actions to advance the Focus pillar of its Hain Reimagined business strategy. These measures include a consolidation of its manufacturing footprint and a reduction in portfolio assortment, with a focus on strengthening the company's balance sheet.
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Streamlining Brand Portfolio & SKU Reduction
Hain Celestial is actively refining its winning portfolio by evaluating and streamlining its brand portfolios. Since July 2023, the company has lowered its SKU count by 6%, demonstrating its commitment to streamlining its product offerings and focusing on high-velocity items. Hain Celestial is poised to continue its SKU rationalization efforts over the next two years. These reductions are nearly evenly distributed between the North America and International markets, impacting brands within the Snacks, Baby/Kids, Beverages, Meal Prep and Personal Care categories.
Significant SKU reductions are taking place in Hain Celestial’s Personal Care division, which includes haircare, skincare and sun care products under brands such as Alba Botanica, Jason, Live Clean and Avalon Organics. Hain Celestial is removing 62% of its underperforming SKUs in this category, focusing on high-performance products to boost growth and improve margins. This phased approach ensures a seamless transition for customers.
In the Meal Prep category, Hain Celestial is refining its Linda McCartney Plant-Based (Meat Free) offerings, particularly its frozen line marketed in Europe and the U.K. In the Snacks sector, Hain Celestial completed the sale of the Thinsters cookie brand in April 2024, shedding a non-essential brand to alleviate its Snacks portfolio and applying the proceeds toward debt reduction. Additionally, adjustments are being made in the Baby/Kids and Beverages categories to maintain brand relevance and market alignment.
Focus on Operational Excellence
Hain Celestial is restructuring its operational structure and capitalizing on synergies to scale operations within its five key markets — the United States, Canada, the UK, Ireland and Western Europe.
In the Personal Care sector, Hain Celestial has streamlined its manufacturing to a single facility, removing five co-manufacturers from its network. This consolidation is anticipated to boost gross margins through better capacity utilization and reduced manufacturing costs, with completion expected by late summer or early fall of 2024.
In the Snacks division, the divestiture of Thinsters has allowed Hain Celestial to decrease its number of distribution centers by two and eliminate a co-manufacturer, thereby achieving annualized cost savings. For Meal Prep, Hain Celestial merged its Yves Plant-Based (Meat Free) production facilities in Canada in late 2023, enhancing operational efficiency and capacity utilization for the Yves brand.
Additionally, in April 2024, Hain Celestial terminated all production and operations in its non-strategic joint venture in India, further refining its manufacturing footprint. However, Hain Celestial will continue to supply products to the IMEA region through its International operating segment.
Wrapping Up
HAIN's strategic actions underscore its resilience and commitment to long-term success. With a focus on simplification, efficiency and value creation, the company is well-positioned to navigate evolving market dynamics and deliver sustainable growth. By enhancing its operating model, leveraging synergies and focusing on its portfolio, Hain Celestial is poised to unlock savings that will help reduce debt and fund initiatives in brand building, channel expansion and innovation.
Shares of this Zacks Rank #3 (Hold) company have lost 44.4% in the past three months compared with the industry’s 1% decline.
Stocks to Consider
We highlighted some better-ranked stocks from the broader Consumer Staples space, namely PepsiCo, Inc. PEP, Colgate-Palmolive CL and Celsius Holdings, Inc. CELH.
PepsiCo is one of the leading global food and beverage companies. It currently carries a Zacks Rank #2 (Buy). PEP has a trailing four-quarter earnings surprise of 5.1%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for PepsiCo’s current financial year’s sales and earnings suggests growth of 3.4% and 7.1%, respectively, from the year-ago reported numbers.
Colgate, a leading consumer goods company, currently carries a Zacks Rank of 2. CL has a trailing four-quarter earnings surprise of 4.4%, on average.
The Zacks Consensus Estimate for CL’s current financial-year sales and earnings suggests growth of 3.3% and 9%, respectively, from the year-ago reported figures.
Celsius Holdings specializes in commercializing healthier, nutritional functional foods, beverages and dietary supplements. It currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for Celsius Holdings’ current financial-year sales and earnings indicates advancements of 41.6% each from the year-ago reported figures. It has a trailing four-quarter earnings surprise of 67.4%, on average.
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PepsiCo, Inc. (PEP) : Free Stock Analysis Report
Colgate-Palmolive Company (CL) : Free Stock Analysis Report
The Hain Celestial Group, Inc. (HAIN) : Free Stock Analysis Report
Celsius Holdings Inc. (CELH) : Free Stock Analysis Report
