The Hain Celestial Group Inc. (HAIN), which distributes, markets, and sells various natural and organic foods as well as personal care products, will unveil its fourth-quarter 2011 financial results on Tuesday, August 23, 2011. The current Zacks Consensus Estimate for the quarter is 33 cents a share. The Zacks Consensus estimates revenue at $270 million for the quarter.
Third-Quarter 2011, a Synopsis
Hain Celestial’s third-quarter 2011 earnings of 36 cents a share beat the Zacks Consensus Estimate of 34 cents, and climbed 38.5% from 26 cents delivered in the prior-year quarter. On a reported basis, including one-time items, earnings came in at 38 cents compared with 6 cents a share earned in the year-ago quarter.
Revenue in the quarter increased by 29.8% to $288.4 million from $222.1 million delivered in the prior-year quarter, and also came well ahead of the Zacks Consensus Estimate of $263 million. Hain Celestial was able to post healthy sales aided by its operations in the United States, Canada and Europe as well as recent acquisitions.
Hain Celestial had forecasted total revenue between $1,095 million and $1,115 million, and earnings in the range of $1.30 to $1.34 per share for fiscal 2011.
Fourth-Quarter 2011 Consensus
The analysts surveyed by Zacks, expect Hain Celestial to post fourth-quarter 2011 earnings of 33 cents a share. The current Zacks Consensus Estimate compares with 26 cents a share earned in the year-ago quarter. The estimates in the current Zacks Consensus for the quarter range from a low of 32 cents to a high of 34 cents.
Zacks Agreement & Magnitude
Of the 9 analysts following the stock, none have revised their estimates in the last 30 or 7 days keeping the Zacks Consensus Estimate constant.
Mixed Earnings Surprise History
With respect to earnings surprises, Hain Celestial has met as well as topped the Zacks Consensus Estimate over the last four quarters in the range of 0.0% to 8.3%. The average remained at 6.5%. This suggests that Hain Celestial has beaten the Zacks Consensus Estimate by an average of 6.5% in the trailing four quarters.
Hain Celestial in Neutral Lane
A leader in natural food and personal care products categories with an array of well-known brands, Hain Celestial offers investors one of the strongest growth profiles in the industry. The company’s strategic investments, and sustained efforts to contain costs, increase productivity and enhance cash flows and margins, have enabled it to deliver healthy results.
Acquisitions have also been a key part of the company’s strategy to build market share, which have not only expanded the company’s geographical presence but have also provided opportunities to cross-sell products in the U.S., Canadian, and European markets. A healthy balance sheet enables the company to target strategic acquisition opportunities.
However, the company’s customers remain sensitive to macroeconomic factors including interest rate hikes, increase in fuel and energy costs, credit availability, unemployment levels, and high household debt levels, which may negatively impact their disposable income triggering a shift in focus from higher priced organic products to cheaper private label brands. This may adversely affect Hain’s top-line growth.
Moreover, the company faces strong competition in the natural and organic foods market and the personal care products segment. Big players such as Kellogg Company (K), Kraft Foods Inc. (KFT), Sara Lee Corporation (SLE) and General Mills Inc. (GIS), who have large resources, can give tough competition.
Currently, we have a long-term ‘Neutral’ rating on the stock. Moreover, Hain Celestial holds a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating.
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