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
third-quarter 2012 financial results on Thursday, May 3, 2012.
The current Zacks Consensus Estimate for the quarter is 50 cents
a share that reflects a growth of 38.9% from the prior-year
quarter's earnings. The estimates in the current Zacks Consensus
range between a low of 49 cents and a high of 52 cents a share. The
Zacks Consensus revenue estimate is pegged at $405 million for the
quarter under discussion.
Recap of Second-Quarter 2012
Rise in consumption, innovative marketing and expanded
distribution facilitated Hain Celestial to register the
historically highest sales and EPS numbers. The second-quarter
earnings of 52 cents a share beat the Zacks Consensus Estimate of
49 cents, and surged 33.3% from 39 cents delivered in the
prior-year quarter.
Rise in demand for natural organic products proved to be boon
for the company as revenue in the quarter rose 32.1% to $385.6
million from $291.9 million delivered in the prior-year
quarter. Moreover, the results were backed by healthy
performances by the United States and Canadian operations as well
as its recent acquisitions. The company's reported revenue came
almost in line with the Zacks Consensus Estimate of $386
million.
Hain Celestial stood by its earlier projection and expects
revenue between $1,455 million and $1,480 million and earnings in
the range of $1.63 to $1.73 per share for fiscal 2012.
Zacks Agreement & Magnitude
No movement was noticed in the Zacks Consensus Estimate for the
third quarter of 2012, either in the last 7 or 30 days, as the
upward and downward revisions in the estimates made by the analysts
have neutralized each other. In the last 30 days, 1 out of 10
analysts covering the stock increased the estimate and another
analyst lowered the same. In the last 7 days as well, a similar
movement was noticed.
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 5.4%. This suggests
that Hain Celestial has beaten the Zacks Consensus Estimate by an
average of 5.4% in the previous four quarters. Given the past
performance, we expect the company to outperform the Zacks
Consensus Estimate in the upcoming quarterly results.
Closing Comment
Hain Celestial offers investors one of the strongest growth
profiles in the industry. The stock is poised to surge as the
economy gradually revives and the appetite for organic foods gets
bigger. We believe that the company remains well positioned to
capitalize on the growing global demand for organic products.
During the second-quarter 2012 earnings call, management hinted
that consumption in the U.S. increased 7%, which is quite a good
number in this scenario.
Acquisitions have been a key part of the company's strategy to
build market share. Not only did buyouts expand Hain Celestial's
geographic reach, but 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 completed the
acquisition of U.K.-based marketer and manufacturer of fresh and
frozen foods, Daniels Group, which is expected to amplify the sales
of the company as it provides a gateway to a sturdy food and
grocery market that is swiftly gaining ground. The frozen category
represents over 50% of food sales in the U.K.
We currently have a long-term "Outperform" recommendation on the
stock. However, Hain Celestial, which competes with
General Mills Inc.
(
GIS
) and
Kraft Foods Inc.
(
KFT
), holds a Zacks #3 Rank that translates into a short-term "Hold"
rating.
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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