The Hain Celestial Group Inc
), a leader in natural food and personal care products with an
extensive portfolio of well-known brands, is slated to report its
fourth quarter and fiscal 2012 financial results on Wednesday,
August 22, 2012.
The current Zacks Consensus Estimate for the quarter is 45 cents
a share that reflects a growth of 28.6% from the prior-year
quarter's earnings. The estimates in the current Zacks Consensus
range between a low of 43 cents and a high of 48 cents a share. The
Zacks Consensus estimates revenue to be at $366 million for the
quarter under review.
For fiscal 2012, analysts polled by Zacks are projecting
earnings of $1.80 per share and revenue of $1,419 million.
Recap of Third-Quarter 2012
Rise in consumption coupled with expanded distribution
facilitated Hain Celestial to post third-quarter 2012 earnings per
share of 54 cents that surpassed the Zacks Consensus Estimate of 50
cents. The reported earnings jumped 50% from 36 cents a share
delivered in the prior-year quarter.
Rise in demand for natural organic products has proven to be a
boon for the company, as revenue in the quarter rose 31.5% year
over year to $379.4 million. However, including sales of the United
Kingdom private label chilled ready meals operations (discontinued
business), revenue came in at $400.3 million, up 39% year over
year. The Zacks Consensus Estimate was $405 million for the
At its third quarter earnings call, Hain Celestial raised its
fiscal 2012 earnings guidance to a range of $1.76 to $1.80 per
share from its previous projection of $1.63 to $1.73. The company
also forecasted sales to be in the range of $1.40 billion to $1.41
billion, reflecting adjustment for the discontinued operations of
private label chilled ready meals.
Zacks Agreement & Magnitude
No movement was noticed in the Zacks Consensus Estimate for the
fourth quarter of 2012, either in the last 7 or 30 days, as none of
the 15 analysts covering the stock revised their estimates.
The Zacks Consensus Estimate for fiscal 2012 also remains
constant as none of the analysts revisited their estimates in the
last 7 days. Moreover, an upward revision in estimate made by one
analyst in the last 30 days did not materially impact the current
Zacks Consensus Estimate, thereby keeping it stable.
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 8%. The average remained at 5.9%, suggesting that
Hain Celestial has outpaced the Zacks Consensus Estimate by the
same magnitude in the trailing four quarters. Given the past
performance, we expect the company to outperform the Zacks
Consensus Estimate in the upcoming quarterly results.
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 popularity of organic food rises.
We believe that the company remains well positioned to capitalize
on the growing global demand for organic products. During
third-quarter 2012 earnings call, management hinted that
consumption in the U.S. increased 9%, which is quite impressive in
Acquisitions have played a major role in 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
Additionally, the company announced the acquisition of Cully
& Sully Limited in Ireland. The acquisition 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.
We currently have a long-term "Outperform" recommendation on the
stock. However, Hain Celestial, which competes with
General Mills Inc.
Kraft Foods Inc.
), holds a Zacks #3 Rank that translates into a short-term "Hold"
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HAIN CELESTIAL (HAIN): Free Stock Analysis
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