LAKE SUCCESS, NY. — Recognizing that the Hain Celestial Group’s brand building investment historically has been below the industry average, Wendy P. Davidson, the company’s new president and chief executive officer, is committed to correcting the situation.
“I was a bit surprised (since) joining the company that some of our brands haven't been on air in over a year, and we haven't been in a position to be able to keep them top of mind with the consumer,” she said during a Feb. 7 conference call to discuss second-quarter results.
Ms. Davidson took over as CEO a few weeks earlier from Mark L. Schiller, who transitioned to non-executive director on the company’s board.
She emphasized that earlier supply chain issues limited investment in some of the company’s brands, but with those issues mostly resolved the investment will restart. Ms. Davidson also intends to explore the potential of each of Hain Celestial’s brands.
“(If) you look at our business today, we have some wonderful regional and local gems that … are No. 1 or No. 2 in their categories in their region,” she said. “They may only stay local or regional but we do have some brands that could span outside of its core geography, and we have a right to play there. Those will be the areas that we're exploring and setting ourselves up to be able to go after that.”
Part of getting set up for brand investment and expansion will be making investments in consumer insights and innovation.
“I'm looking at our capabilities around insights and analytics and consumer ... category insights and analytics to make sure that we’re able to see what’s happening in the marketplace and where we need to be,” Ms. Davidson said. “We’re looking a lot around our innovation capabilities, but also our ability to build strong brand strategies and even things like our agency model and support model.”
For the second quarter ended Dec. 31, 2022, The Hain Celestial Group’s net income was $11 million, equal to 12¢ per share on the common stock, and down from the same period of the previous year when the company earned $30.9 million, equal to 33¢ per share.
Quarterly sales were $454.2 million, also down from the year before when sales were $476.9 million.
Items affecting results included foreign exchange, acquisitions, divestitures and discontinued brands, according to the company.
In North America, the company’s largest business unit, sales were $282.4 million, up 3% from the year prior. Segment operating profit was $32.3 million, up 19%.
“Select categories such as snacks, up double digits in the quarter and yogurt up high-single digits, continued to perform well,” said Christopher J. Bellairs, chief financial officer and principal accounting officer.
International business unit sales fell 15% to $171.8 million during the quarter. Operating income fell 56% to $12.5 million. Items affecting results included foreign exchange and weakness in plant-based product categories in Europe.
For the first six months of fiscal 2023, Hain Celestial’s net income was $17.9 million, equal to 20¢ per share, and down from $50.3 million, or 53¢ per share.
Sales for the first six months of the year were $893.6 million, down from $931.8 million the year prior.