The Hain Celestial Group Inc
. (
HAIN
), a leader in natural food and personal care products with an
extensive portfolio of well-known brands, is slated to report its
second-quarter 2012 financial results on February 1, 2012. The
current Zacks Consensus Estimate for the quarter is 49 cents per
share. Revenue as per the Zacks Consensus Estimate is $388
million.
First-Quarter 2012, a Synopsis
Hain Celestial posted healthy first-quarter 2012 financial
results. The quarterly earnings of 29 cents per share came a penny
ahead of the Zacks Consensus Estimate, and climbed 16% from 25
cents delivered in the prior-year quarter.
On a reported basis, including one-time items, earnings came in
at 26 cents compared with 21 cents per share earned in the year-ago
quarter.
Revenue in the quarter increased by 13.3% to $292.4 million from
$258 million delivered in the prior-year quarter, ahead of the
Zacks Consensus Estimate of $288 million.
Guidance
Hain Celestial forecasts revenue between $1,455 million to
$1,480 million and earnings in the range of $1.63 to $1.73 per
share for fiscal 2012.
Second-Quarter 2012 Zacks Consensus
The analysts considered by Zacks expect Hain Celestial to post
second-quarter 2012 earnings of 49 cents per share. The current
Zacks Consensus Estimate reflects a growth of 25.6% from the
prior-year quarter's earnings. The current Zacks Consensus Estimate
for the quarter ranges between 47 cents and 52 cents.
Zacks Agreement & Magnitude
Of the 10 analysts covering the stock, 1 analyst revised the
estimate upwards in the last 30 days leaving the Zacks Consensus
Estimate stable, while none of the analysts revised their estimates
in the downward direction.
Positive Earnings Surprise History
With respect to earnings surprises, Hain Celestial has topped
the Zacks Consensus Estimate over the last four quarters in the
range of 3.6% to 6.1%. The average remained at 5.2%, indicating
that the company has outperformed the Zacks Consensus Estimate by
an average of 5.2% in the trailing four quarters.
Our Take
We believe that the company remains well positioned to
capitalize on the growing global demand for organic products. The
U.S. alone has shown an approximately 20% jump in its consumption
of organic foods.
Acquisitions have been a key part of the company's strategy to
build market share. Acquisitions have not only expanded Hain
Celestial's geographic reach, but have also brought in
opportunities to cross-sell its products in the U.S., Canadian, and
European markets. Notably, a healthy balance sheet enables the
company to target strategic acquisition opportunities.
Following its growth plan, Hain Celestial announced the
acquisition of Daniels Group, the U.K. based marketer and
manufacturer of fresh and frozen foods. The acquisition offers Hain
Celestial a gateway to a sturdy food and grocery market that is
swiftly gaining ground. Currently, the frozen category represents
more than 50% of food sales in U.K.
Further, the company's strategic initiatives to enhance its
portfolio of global brands by acquiring Danival, the manufacturer
of certified organic food products with facilities in France, and
GG UniqueFiber, the manufacturer of all natural high fiber crackers
in Norway, is paying off.
The company's strong fundamentals and favorable outlook are
compelling. We, thus, maintain our bullish stance on the stock even
in a volatile market. Currently, we have a long-term Outperform
rating on the stock. However, Hain Celestial, which competes with
General Mills Inc.
(
GIS
) and
Kraft Foods Inc.
(
KFT
), holds a Zacks #2 Rank that translates into a short-term Buy
recommendation.
GENL MILLS (
GIS
): Free Stock Analysis Report
HAIN CELESTIAL (
HAIN
): Free Stock Analysis Report
KRAFT FOODS INC (
KFT
): Free Stock Analysis Report
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