Why Hain Celestial (HAIN) Stock Is Trading Up Today

What Happened:

Shares of natural food company Hain Celestial (NASDAQ:HAIN) jumped 31.3% in the morning session after the company reported second-quarter earnings results. Hain Celestial blew past analysts' EPS expectations, and its organic revenue growth also outperformed Wall Street's estimates. Looking ahead, guidance was promising, with FY'25 organic sales expected to be flat (vs. -2% decline recorded in FY'24). Similarly, adjusted EBITDA is expected to grow by mid-single digits, year on year, while free cash flow is expected to be at least $60m. Zooming out, this was a fantastic quarter, which is being reflected in the significant stock move.

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What is the market telling us:

Hain Celestial’s shares are somewhat volatile and over the last year have had 28 moves greater than 5%. But moves this big are very rare even for Hain Celestial and that is indicating to us that this news had a significant impact on the market’s perception of the business. 

The biggest move we wrote about over the last year was 7 months ago, when the stock dropped 17.5% on the news that the company reported second-quarter results that missed analysts' expectations for revenue, EPS, and free cash flow. Revenue growth was flat year on year. Notably, growth in North America declined 5.2% year on year, led by weak baby formula sales, due to "continued industry-wide challenges in organic formula supply." 

In addition, the near-term growth outlook was revised with expectations for near-term headwinds due to its restructuring program. The company anticipates "a return to overall growth in the back half of the year." 

As a result, the company expects organic net sales growth of approximately 1% or more ( versus previous guidance of 2% to 4% growth) for the full year. Overall, it was a weaker quarter for the company, highlighting multiple challenges.

Hain Celestial is down 23.9% since the beginning of the year, and at $8.68 per share it is trading 26.6% below its 52-week high of $11.82 from November 2023. Investors who bought $1,000 worth of Hain Celestial’s shares 5 years ago would now be looking at an investment worth $478.00.

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