The Hain Celestial Group (HAIN) Q4 2024 earnings summary

Executive summary

• Delivered on updated guidance for FY24, with organic net sales growth in core brands and adjusted EBITDA at the upper end of guidance.

• 85% of the business grew 3% organically in FY24, while initiatives are in place to stabilize the remaining 15%.

• Significant progress on the Hain Reimagined strategy, focusing on core categories, supply chain simplification, and global integration.

• Strong free cash flow enabled $86 million net debt reduction, improved leverage, and investment in brands and capabilities.

• Focus remains on commercial execution, brand building, and innovation to pivot to growth in FY25.

Financial highlights

• FY24 organic net sales declined 2% year-over-year, with 4% growth internationally offset by a 6% decline in North America.

• Q4 organic net sales declined 4% year-over-year; Q4 net sales were $419 million, down 6%.

• FY24 adjusted EBITDA was $155 million (down from $167 million prior year); Q4 adjusted EBITDA was $40 million (down from $44 million prior year).

• Adjusted gross margin for FY24 increased 30 bps to 22.4%; Q4 adjusted gross margin rose 70 bps to 23.4%.

• FY24 adjusted net income was $30 million ($0.33 per diluted share), down from $45 million ($0.50 per share) prior year.

• Free cash flow for FY24 was $83 million, up from $39 million prior year.

Outlook and guidance

• FY25 organic net sales expected to be flat or better, with growth accelerating in the back half of the year.

• Adjusted EBITDA projected to grow mid-single digits; gross margin to expand by at least 125 bps; free cash flow of at least $60 million.

• Committed to long-term algorithm: 3%+ organic net sales CAGR, 400-500 bps gross margin expansion (to 26%+), and 12%+ adjusted EBITDA margin by FY27, rebased to FY24.

• Q1 FY25 expected to see negative organic net sales growth, with improvement through the year.

• Baseline organic net sales for FY24 estimated at $1.685 billion; FX not expected to materially impact FY25.