Hain Celestial’s Revenue and Earnings Guidance for Fiscal 2016

Will Hain Celestial’s Fiscal 2Q16 Earnings Match Guidance?

(Continued from Prior Part)

Revenue estimates for fiscal 2Q16

Hain Celestial (HAIN) recently announced its updated guidance for fiscal 2016 and its expectations for fiscal 2Q16. The company projects 2Q16 revenue to be in the range of $740.0 million–$760.0 million and earnings per diluted share to be in the range of $0.53–$0.56. This guidance reflects the continuing strong performance of its Hain Pure Protein Corporation and its international businesses in constant currency. This performance is expected to be offset by certain effects from the United States segment including lower consumption and reductions in shipments and inventories for certain customers.

The company has been delivering positive YoY (year-over-year) growth in revenue since fiscal 1Q14. However, its growth has been in a downward trend since fiscal 3Q15. The company recorded $687 million in net sales in fiscal 1Q16, demonstrating growth of 8.7% from fiscal 1Q15. However, the company missed analysts’ estimates by 2%. Analysts estimated the company would record net sales of $753 million for fiscal 2Q16, expecting YoY growth of 7.2%.

Updated guidance for fiscal 2016

The guidance excludes the impact of any future acquisitions. The company’s updated fiscal 2016 guidance is as follows:

• Total net sales will be in the range of $2.9 billion–$3.0 billion, a rise of 7%–12% as compared to fiscal 2015. This figure includes an estimated unfavorable currency impact of ~$75 million.

• Earnings per diluted share will be in the range of $1.95–$2.10, a rise of 4%–12% as compared to fiscal 2015. This figure includes an estimated unfavorable currency impact of ~$0.05.

Other key highlights of fiscal 1Q16

Gross profit rose by 20.8% YoY to $152 million in fiscal 1Q16. The company’s net sales fell by ~$24 million compared to fiscal 1Q15 due to the strengthening US dollar. Foreign exchange also partly played a role in the fall, as 37% of the company’s sales are generated internationally. The company showed strong sales growth in constant currency terms in some of its major brands like Plainville Farms, Linda McCartney, Terra, Alba Botanica, JASON, Tilda, and Garden of Eatin’. Brands that were acquired during fiscal 2015 include Empire Kosher Poultry, Joya, and Live Clean, which also contributed to the growth in sales.

Peers’ revenues

Hain Celestial’s competitors in the industry include Cal-Maine Foods (CALM), Mead Johnson Nutrition Company (MJN), and Pinnacle Foods (PF). They recorded revenues of $636 million, $978 million, and $636 million, respectively, for their last reported quarters. The PowerShares DWA Consumer Staples Momentum Portfolio (PSL) invests 2.9% of its portfolio in PF.

Continue to Next Part

Browse this series on Market Realist:

• Part 1 - Hain Celestial’s Stock Fell on Updated Fiscal 2016 Guidance

• Part 3 - Hain Celestial and Its Peers Trade below Key Moving Averages

• Part 4 - Analysts Expect No Growth in Hain Celestial’s Fiscal 2Q16 EPS