Hain Celestial's Strategic Efforts Bode Well: Hold HAIN

The Hain Celestial Group, Inc. (NASDAQ:HAIN) , through strategic opportunities, constantly endeavors to expand its footprint in the organic and natural products category in order to offer “A Healthier Way of Life.” Acquisitions have played a vital role in the company’s strategy of building market share. In the recent past, Hain Celestial acquired Orchard House Foods Limited ("Orchard House"), one of the leading providers of prepared fruit, juices, fruit desserts and other ingredients, with facilities in Gateshead and Corby in the U.K.

The company had earlier acquired Tilda Limited, a renowned name in Basmati rice, and Rudi's Organic Bakery, one of the leading organic and gluten-free companies. It also purchased leading packaged grocery brands – Hartley's, Gale's Robertson's, Frank Cooper's and Sun-Pat – from Premier Foods plc. Additionally, it acquired Ella's Kitchen Group Limited that offers organic baby food products. Hain Celestial’s other acquisitions include those of leading plant-based food and beverage company, Mona Group, and Belvedere International, Inc. – provider of health and beauty care products, including the Live Clean brand with about 200 baby, body and hair care products.

Going forward, we believe that the company will remain focused on higher productivity and efficient pricing. Moreover, Hain Celestial has undertaken a number of initiatives to improve its performance and thus, positioned itself on the growth trajectory. The company’s Stock Keeping Unit (“SKU”) rationalization program has helped in eliminating SKUs which had lower sales volumes or weak margins.

Management now anticipates net sales in the band of $2.946–$2.966 billion for fiscal 2016, up 9%–10% year over year, while earnings per share are envisioned in the range of $2.00–$2.04, representing 6%–9% year-over-year growth.

Bottom Line

A leader in the natural food and personal care product categories, with an extensive portfolio of well-known brands and strong fundamentals, Hain Celestial is poised for a surge as the economy gradually revives and the demand for organic food increases. Hain Celestial’s strategic investments, coupled with its continued efforts to contain costs, boost productivity and enhance margins, enable it to deliver encouraging results. Further, its long-term earnings per share growth rate stands at a healthy 10.3%.

Zacks Rank

Hain Celestial currently carries a Zacks Rank #3 (Hold). Investors may consider better-ranked stocks such as Post Holdings, Inc. (NYSE:POST) and The J. M. Smucker Company (NYSE:SJM) , both sporting a Zacks Rank #1 (Strong Buy), and ConAgra Foods, Inc. (NYSE:CAG) , carrying a Zacks Rank #2 (Buy).