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HAIN CELESTIAL GROUP INC (HAIN)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 FY2024 net sales were $418.8M (-6% YoY), adjusted EPS was $0.13, and adjusted EBITDA was $39.5M; gross margin expanded to 23.4% (+90 bps YoY). Management said the company “delivered on our updated guidance,” with free cash flow above expectations .
  • Net debt fell by $86M in FY2024, ending at $689.8M, and leverage improved to 3.7x; debt reduction and working capital initiatives were central to cash generation and deleveraging .
  • FY2025 outlook: organic net sales flat or better, adjusted EBITDA growth mid-single digits, ≥125 bps gross margin expansion, and ≥$60M free cash flow; capex expected ~$50M in FY2025 (call) .
  • Key near-term catalysts: infant formula supply recovery by H1 FY2025 with back-half acceleration, expanded snacks distribution (C-store and retail ACV), and continued productivity/fuel initiatives driving margin and cash flow .

What Went Well and What Went Wrong

What Went Well

  • “Fuel initiatives exceeded our targets for fiscal 2024,” enabling debt paydown and investments; free cash flow above expectations with net debt down $86M, leverage at 3.7x .
  • Gross margin expansion: adjusted gross margin rose to 23.4% in Q4 (+70 bps YoY), driven by productivity and pricing .
  • International margin strength: Q4 International adjusted gross margin 24.8% (+210 bps YoY) and adjusted EBITDA margin 17.0% (+40 bps YoY), supported by productivity .
  • Management tone confident on pivot to growth in FY2025 and reiterated long-term algorithm (gross margin +400–500 bps to 26%+, EBITDA margin 12%+) using FY2024 as the rebase .

What Went Wrong

  • Q4 organic net sales declined 4% YoY; North America faced infant formula supply constraints and personal care softness (portfolio simplification), pressuring volumes and EBITDA .
  • Adjusted EBITDA declined YoY in Q4 to $39.5M (9.4% margin, -30 bps), with North America adjusted EBITDA margin falling to 8.0% (-150 bps) due to deleverage on lower volume .
  • SG&A rose 8% YoY in Q4 to $72M (17.3% of sales), driven by legal expenses and bonus timing; restructuring and transformation charges also weighed on GAAP results .
  • FY2024 guidance was cut in Q3 due to supplier shortfall in infant formula, snacks execution issues, and slower personal care stabilization; organic sales revised to -3% to -4% and adjusted EBITDA to $150–$155M .

Financial Results

MetricQ2 FY2024Q3 FY2024Q4 FY2024
Net Sales ($USD Millions)$454.1 $438.4 $418.8
Net Sales YoY Growth (%)0.0% -3.7% -6.5%
Gross Margin %22.5% 22.1% 23.4%
Adjusted Gross Margin %23.5% 22.3% 23.4%
Net Income (Loss) ($USD Millions)$(13.5) $(48.2) $(2.9)
Diluted EPS (GAAP) ($)$(0.15) $(0.54) $(0.03)
Adjusted EPS ($)$0.12 $0.13 $0.13
Adjusted EBITDA ($USD Millions)$47.1 $43.8 $39.5
Adjusted EBITDA Margin %10.4% 10.0% 9.4%

Segment performance across quarters:

Segment MetricQ2 FY2024Q3 FY2024Q4 FY2024
North America Net Sales ($m)$267.7 $268.1 $259.7
North America Adjusted Gross Margin %24.8% 22.2% 22.6%
North America Adjusted EBITDA ($m)$31.2 $27.9 $20.9
North America Adjusted EBITDA Margin %11.7% 10.4% 8.0%
International Net Sales ($m)$186.4 $170.3 $159.1
International Adjusted Gross Margin %21.6% 22.4% 24.8%
International Adjusted EBITDA ($m)$26.0 $24.5 $27.0
International Adjusted EBITDA Margin %13.9% 14.4% 17.0%

Q4 FY2024 category breakdown:

CategoryNet Sales ($m)Reported Growth YoY (%)Organic Growth YoY (%)
Snacks$121 -6% 0%
Baby & Kids$64 -10% -10%
Beverages$56 +3% +3%
Meal Prep$149 -5% -5%
Personal Care$29 -21% -17%

KPIs and balance sheet trajectory:

KPIQ2 FY2024Q3 FY2024Q4 FY2024
Operating Cash Flow ($m)$20.7 $42.3 $39.4
Free Cash Flow ($m)$14.8 $30.2 $30.7
Net Debt ($m)$755.6 $728.0 $689.8
Net Secured Leverage Ratio (x)4.2x 3.9x 3.7x

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Organic Net Sales GrowthFY2024 (Q2 update)+2% to +4% (Aug prior)~+1% or more Lowered
Organic Net Sales GrowthFY2024 (Q3 update)~+1% or more (Q2) -3% to -4% YoY Lowered
Adjusted EBITDA ($m)FY2024 (Q2 update)$155–$165 (Aug prior)$155–$160 Lowered midpoint
Adjusted EBITDA ($m)FY2024 (Q3 update)$155–$160 (Q2) $150–$155 Lowered
Free Cash Flow ($m)FY2024 (Q2 update)$50–$55 (Aug prior)$40–$45 Lowered
Free Cash Flow ($m)FY2024 (Q3 update)$40–$45 (Q2) $40–$45 Maintained
Organic Net SalesFY2025—Flat or better New
Adjusted EBITDAFY2025—Mid-single-digit growth New
Gross MarginFY2025—+≥125 bps New
Free Cash FlowFY2025—≥$60M New
CapexFY2025—~$50M (call commentary) New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
Infant formula supplySupplier did not meet commitment in Q3; headwind to NA growth .Back in supply for most formulations; full supply expected by end of H1 FY2025; back-half growth driver .Improving; recovery to drive H2 FY2025 acceleration .
Snacks distribution & promoOptimization of channel mix and promo in Q2; underperformance acknowledged .Expanded C-store distribution (+13k stores; 48k total); national multi-brand promo “Savor Your Summer” exceeding targets; Garden Veggie masterbrand campaign .Positive momentum into FY2025 .
International margins & beveragesIntl adjusted gross margin expanded in Q2/Q3; beverages strong .Intl adjusted gross margin 24.8%; beverage growth continues; own-label contracts and oat innovation support .Strengthening margins; steady category growth .
Personal care stabilizationOngoing portfolio exits; consolidation; significant declines .Continued softness; simplification plan ongoing; optionality review .Stabilization in progress; still a headwind .
Working capital & fuelWorking capital/cost savings delivering OCF and leverage improvement .DPO improved to 52 (from 37); DIO improved to 79 (from 82); net debt reduction; productivity pipeline supports FY2025 .Sustained execution; supports margin/cash targets .
Price/volume/mix disclosureSystems being put in place; planned [—].Will break out price/volume/mix starting Q1 FY2025; FY2025 growth primarily volume/mix .Transparency increasing .

Management Commentary

  • “Fiscal 2024 was the foundational year of our Hain Reimagined strategy… Our fuel initiatives exceeded our targets for fiscal 2024, allowing us to pay down debt, invest in capabilities, and to deliver on our updated full-year guidance.” — Wendy Davidson, CEO .
  • “We are pleased with our free cash flow generation… enabled us to reduce net debt by $86 million… leverage ratio to 3.7x… Reduction in net debt remains a top priority.” — Lee Boyce, CFO .
  • “Approximately 85% of our business grew in fiscal year '24… we are well positioned… to pivot to growth in fiscal year 2025.” — Wendy Davidson, CEO .
  • “We expect organic net sales growth to be flat or better, adjusted EBITDA to grow by mid-single digits, gross margin to expand by at least 125 basis points and free cash flow of at least $60 million.” — Lee Boyce, CFO (FY2025 outlook) .

Q&A Highlights

  • Shape of FY2025: H1 headwinds with promotional timing and formula inventory rebuild; back-half acceleration driven by infant formula recovery, snacks events timing shift (Garden Veggie), and Greek Gods distribution expansion .
  • Away-from-home channel: Expanded C-store footprint (48k stores) supporting brand awareness and velocity; Garden Veggie and Terra fastest-moving better-for-you snacks in C-store; strategy is “first to find, first to mind” .
  • Long-term algorithm reaffirmed: Gross margin +400–500 bps to 26%+, EBITDA margin 12%+, 3%+ organic CAGR off FY2024 organic base; 1/3 of $165M working capital target delivered in year one .
  • Price/volume/mix: Company will disclose starting Q1 FY2025; FY2025 growth expected to be primarily volume/mix (limited incremental pricing) .
  • Infant formula resilience: Multiple supply options, some location redundancy, and elevated inventory for core SKUs to ensure shelf consistency; full sizes/formulations by late Q2 FY2025 .
  • Segment cadence: NA drives most swing; International front-end softness mostly meat-free; portfolio simplification in refrigerated meat-free as category consolidates .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 FY2024 EPS/Revenue and near-term forward estimates were unavailable due to data access limitations at the time of this analysis; as a result, comparisons to consensus are not included. Values would normally be retrieved from S&P Global consensus.

Key Takeaways for Investors

  • FY2024 ended with margin expansion and strong cash generation; Q4 adjusted gross margin up 70 bps YoY to 23.4%, and free cash flow of $30.7M in Q4, supporting deleveraging to 3.7x .
  • North America remains the swing factor: infant formula supply recovery and snacks distribution gains are expected to drive back-half FY2025 growth; watch H1 cadence per management commentary .
  • International is a margin anchor: Q4 adjusted EBITDA margin rose to 17.0%, with beverages momentum and productivity gains; continued contract wins and innovation should support stability .
  • Cost and cash discipline are tangible: DPO and DIO improvements, net debt down $86M in FY2024, and FY2025 FCF ≥$60M target provide flexibility to invest while reducing leverage .
  • Personal care and meat-free are still headwinds: portfolio exits and category softness persist; stabilization progress will influence consolidated mix and margins .
  • FY2025 setup: Expect organic net sales “flat or better,” mid-single-digit EBITDA growth, and ≥125 bps gross margin expansion; capex ~$50M implies continued investment in capabilities and growth initiatives .
  • Near-term trading lens: monitor scanner data in H1 for promo timing shifts and NA rebuild, and track infant formula distribution recapture; management flagged H1 softness with back-half acceleration .