LAKE SUCCESS, N.Y. — The Hain Celestial Group, Inc. plans to launch new yogurt, tea, snacks and more in the months ahead to replace many of the underperforming products it has removed from the marketplace. Mark L. Schiller, president and chief executive officer, said the company has developed a “robust, multi-year pipeline” over the past year.
“You’ll recall that when I got here, the pipeline was fairly bare,” Mr. Schiller told securities analysts during a Nov. 7 conference call. “We were taking things out without really having anything proactively to put in its place. So, I would expect that we will be more ‘one in, one out’ going forward, once we get through the rationalization that we’re in the process of executing.”
Over the past year, Hain Celestial has taken significant steps to simplify the business, including eliminating nearly 10% of its stock-keeping units globally and divesting nonstrategic brands with sales of almost $750 million.
“In total, since we communicated our strategy in February to simplify the portfolio, we’ve completed seven divestitures,” Mr. Schiller said. “This includes Hain Pure Protein businesses consisting of Plainville, Empire Kosher and FreeBird brand along with WestSoy, Tilda, SunSpire and Arrowhead Mills. Our team’s done a tremendous job in this area. We continue to pursue margin expansion opportunities, and you should expect to see more divestitures in the future on brands that are less profitable or are otherwise less of a strategic fit within our core portfolio.”
New products on tap this year include Celestial Seasonings TeaWell, a range of teas infused with a blend of herbs and botanicals that aid in digestion, immune support and mental vitality, according to the company. Hain Celestial offered the products in test markets last year, Mr. Schiller said.
“Remember, that’s more of a health and wellness tea,” he said. “Very incremental to our brand, very incremental to the category.”
The burgeoning market for meat alternatives represents another opportunity for Hain Celestial. Mr. Schiller said the company plans to test plant-based innovation in the United States later in the fiscal year.
“As you know, we have a strong plant-based business, Linda McCartney in the U.K.; we have a strong plant-based business Yves in Canada,” Mr. Schiller said. “We are in the process of working with those two groups to figure out how we best relaunch into the United States with a plant-based offering. We are in the process of finalizing what that will look like, and we will get that into some kind of a test in the second half of this year rather than spend a year doing all kinds of consumer research. We’ve got a good foundation from the two brands that we already have. And so we’re going to do more of the learning in market and get something into the market in the second half.”
The company’s first-quarter results were affected by the strategic business transformation initiatives and fell in line with expectations, Mr. Schiller said.
Hain Celestial widened its net loss in the first quarter ended Sept. 30 to $107,021,000 from a year-ago loss of $37,425,000. Excluding discontinued operations, productivity and transformation costs and other non-recurring items, adjusted EBITDA for the quarter was $32,090,000, up from $28,694,000.
Net sales declined 7% to $482,076,000 from $518,478,000. Net sales decreased 1% compared to the prior-year quarter when adjusted for foreign exchange, acquisitions, divestitures and certain other items.
Shares of Hain Celestial trading on NasdaqGS increased by more than 5% on Nov. 7 to close at $25.55, up from $24.23 the day before and up 63% since the beginning of the year.