MELVILLE, N.Y. – Growing demand for organic products contributed to record sales for The Hain Celestial Group, Inc. in the second quarter.
“We are in a good category,” said Irwin Simon, president and chief executive officer, in a Feb. 5 call with financial analysts to discuss second-quarter earnings. “You saw last week where the U.S.D.A., F.D.A. are coming out and changing a lot of the guidelines within foods and what should be sold within food and the school meal program. We continuously hear 70% of the health care costs today come from self-inflictions, which is obesity. The U.K. has the third-highest rate of obesity in the world today, and health and wellness there will continue to be a big part of eating from a U.K. standpoint.”
A record $455.3 million in sales for the quarter was boosted by double-digit growth for 16 brands, including Earth’s Best, Celestial Seasonings and The Greek Gods, which increased by 39%.
October acquisitions of Hartley’s jam and Sun-Pat peanut butter elevated sales in the United Kingdom by 113%.
Looking ahead, the company plans to generate productivity savings to offset commodity headwinds from chia and almond costs in the second half and shed unprofitable units from its recently acquired Premier business.
“In the quarter, we closed on the Premier acquisition,” Mr. Simon said. “And we’ve owned it two months, and as I said before, when you can do all your due diligence you want before you acquire a business, when you own it, you make a lot of decisions. And within two months, Rob (Burnett, chief executive officer of Hain Daniels) and the team have made a lot of decisions going forward, a lot of the products that we will discontinue and rationalize the business, how we will focus on building the brands and how we will focus on really building that business out, both on our Hartley’s brand, Sun-Pat brand, our Gale’s brand and our Robertson brand and how we will also focus on building up the profitability of the plant.”
The company also is eyeing more opportunities for growth, Mr. Simon said.
“We have identified three or four other good niche acquisitions that are in the $25 million, $30 million range that we think are categories that we are not in today, and being part of Hain, we think we can take them to a whole other level,” Mr. Simon said.Income was $31.6 million for the quarter ended Dec. 31, equal to 69c per share on the common stock, up from $20 million, or 45c per share, during fiscal 2012.