Financial Data and Key Metrics Changes - The company reported an organic net sales decline of 7% year-over-year for the second quarter, driven by lower sales in both North America and international segments [15] - Adjusted gross margin decreased to 19.5%, a drop of approximately 340 basis points year-over-year, attributed to cost inflation and lower volume mix [15][16] - Adjusted EBITDA was $24 million, down from $38 million a year ago, reflecting lower gross margins [17][18] Business Line Data and Key Metrics Changes - In North America, organic net sales declined 10% year-over-year, primarily due to lower volume in snacks and baby formula, while beverages showed growth [18] - The adjusted gross margin in North America was 20.8%, a decrease of 440 basis points compared to the prior year [18] - International organic net sales declined 3%, with adjusted gross margin at 18.1%, a 200 basis point decrease year-over-year [19] Market Data and Key Metrics Changes - North American snacks represented 22% of the company's net sales in fiscal 2025, contributing negligible EBITDA over the last 12 months [8] - The core categories in North America, including tea, yogurt, and Baby & Kids, are expected to deliver stronger EBITDA margins in the low double digits [8][26] Company Strategy and Development Direction - The company is executing a strategic review aimed at simplifying its portfolio, enhancing financial flexibility, and maximizing shareholder value [5][9] - The divestiture of the North American snacks business for $115 million is a decisive step to focus on key categories and brands [6][7] - The company aims to drive sustainable, profitable growth through five key actions: streamlining the portfolio, accelerating brand innovation, strategic revenue management, productivity improvements, and strengthening digital capabilities [10][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's direction, emphasizing the importance of operational health and cash delivery [29] - The company anticipates sequential improvement in both top and bottom-line performance in the second half of the fiscal year, driven by innovation and pricing actions [27][62] - Management highlighted the need to focus on demand fulfillment categories where the company has demonstrated consistent delivery [51] Other Important Information - Free cash flow in the second quarter was $30 million, an increase of 22% compared to the previous year [22] - The company has reduced net debt by $32 million, bringing total net debt to $637 million [23][24] - The strategic review includes plans for further asset sales and operational improvements to enhance financial flexibility [25] Q&A Session Summary Question: Details on the decision to divest the snacks portfolio - Management explained that the decision was driven by the need to simplify the portfolio and focus on categories where the company can win, noting that snacks had become financially challenged [35][36] Question: Reallocation of innovations post-divestiture - Management confirmed that divesting snacks would free up resources for innovation in remaining categories, with plans to mitigate stranded costs within 6 to 12 months [41][42] Question: Cash generation from the snacks business - Management indicated that the snacks business was not a significant cash generator, and the divestiture would improve overall cash generation capabilities [45] Question: Future growth in Baby & Kids business - Management expressed confidence in returning to growth in the Baby & Kids segment, particularly after cycling past challenges and launching new products [85]

Financial Data and Key Metrics Changes - Organic net sales declined by 7% year-over-year, driven by lower sales in both North America and international segments [13] - Adjusted gross margin decreased to 19.5%, a drop of approximately 340 basis points year-over-year due to cost inflation and lower volume mix [14] - Adjusted EBITDA was $24 million, down from $38 million a year ago, reflecting lower gross margins [16][17] Business Line Data and Key Metrics Changes - North America organic net sales declined 10% year-over-year, primarily due to lower volume in snacks and baby formula [17] - International organic net sales declined 3%, an improvement from a 4% decline in the first quarter, driven by stabilization in baby and kids categories [18] - Snacks category saw a 20% decline in organic net sales year-over-year, while tea and yogurt showed growth [19][20] Market Data and Key Metrics Changes - North American snacks represented 22% of the company's net sales in fiscal 2025, with negligible EBITDA contribution over the last 12 months [6] - The international business showed a sequential improvement in cash flow and sales trends, particularly in tea and yogurt [11][12] Company Strategy and Development Direction - The company is executing a strategic review to simplify its portfolio, enhance financial flexibility, and maximize shareholder value [4][5] - A definitive agreement was reached to sell the North American snacks business for $115 million, aimed at reducing debt and strengthening the financial position [5][6] - The focus will shift to three flagship categories: tea, yogurt, and baby and kids, while continuing to develop the meal prep platform [6][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the turnaround strategy and the potential for improved top and bottom-line performance in the second half of the year [12][27] - The divestiture is expected to enhance gross margin and EBITDA, with the remaining North American portfolio anticipated to have gross margins above 30% [26] - Management highlighted the importance of innovation and operational discipline in driving future growth [9][41] Other Important Information - Free cash flow in the second quarter was $30 million, an increase of 22% compared to the previous year [22] - The company has reduced net debt by $32 million, bringing total net debt to $637 million [23][24] - The strategic review includes plans for further asset sales and operational improvements to enhance financial flexibility [25] Q&A Session Summary Question: Details on the decision to divest the snacks portfolio - Management explained that simplifying the portfolio was necessary to focus on growth areas, as snacks had become financially challenged and required capabilities that were not aligned with the company's strengths [36][37] Question: Reallocation of innovations post-divestiture - Management confirmed that divesting snacks would free up resources for innovation in remaining categories, with plans to mitigate stranded costs within 6-12 months [40][41] Question: Cash generation from the snacks business - Management indicated that the snacks business was not a significant cash generator, and the divestiture would improve overall cash generation capabilities [44][45] Question: Flexibility regarding upcoming debt maturity - Management stated that they are in constructive dialogue with their bank group and are evaluating options to refinance or extend maturities [46][47] Question: Future growth in the baby and kids business - Management highlighted that the business is expected to return to growth as they cycle past previous challenges and continue to innovate [84][85]

Hain Celestial Second Quarter Fiscal Year 2026 Financial Results Forward-Looking Statements assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, our results may differ materially from those expressed or implied by such forward-looking statements. The words "believe," "expect," "anticipate," "may," "should," "plan," "intend," "potential," "will" and similar expressions are intended to identify such forward-looking statements. Forward-looking statements include, amon ...

Financial Performance - Net sales for the three months ended December 31, 2025 were $384.1 million, a decrease of $27.4 million, or 6.7%, compared to the prior year quarter [175]. - Gross profit for the same period was $74.4 million, a decrease of $19.0 million, or 20.3%, with a gross profit margin of 19.4% compared to 22.7% in the prior year [177]. - Operating loss for the three months ended December 31, 2025 was $98.8 million, compared to $91.9 million in the prior year quarter [185]. - Net loss for the three months ended December 31, 2025 was $116.0 million, or $1.28 per diluted share, compared to a net loss of $104.0 million, or $1.15 per diluted share in the prior year quarter [193]. - Adjusted EBITDA for the three months ended December 31, 2025 was $24.3 million, a decrease of $13.6 million, or 35.9%, from $37.9 million in the prior year quarter [194]. - Net sales for the six months ended December 31, 2025 were $752.0 million, a decrease of $54.1 million, or 6.7%, including an unfavorable impact of $23.2 million related to held for sale businesses [207]. - Adjusted EBITDA for the six months ended December 31, 2025 was $44.0 million, a decrease of $16.3 million, or 27.0%, from $60.3 million in the prior year period [205]. - Net loss for the six months ended December 31, 2025 was $136.6 million, or $1.51 per diluted share, compared to $123.6 million, or $1.37 per diluted share, in the prior year period [224]. Expenses and Charges - The Company recognized non-cash goodwill impairment charges of $119.9 million during the three months ended December 31, 2025, compared to $91.3 million in the prior year [180]. - Selling, general and administrative expenses decreased by $9.3 million, or 13.2%, to $60.9 million for the three months ended December 31, 2025 [179]. - The Company incurred pretax charges of $3.8 million and $17.3 million for the three and six months ended December 31, 2025, respectively, related to the Restructuring Program [172]. - Goodwill impairment charges for the six months ended December 31, 2025 totaled $119.9 million, compared to $91.3 million in the prior year period [211]. - Selling, general and administrative expenses for the six months ended December 31, 2025 were $126.4 million, a decrease of $15.1 million, or 10.7%, from $141.5 million in the prior year period [210]. Sales Performance - Organic net sales decreased by $26.2 million, or 6.7%, from the prior year quarter, driven by a 9.0% decrease in volume/mix [176]. - North America net sales for the three months ended December 31, 2025 were $197.8 million, a decrease of $31.5 million, or 13.7%, compared to the prior year quarter [197]. - International net sales for the three months ended December 31, 2025 were $186.3 million, an increase of $4.1 million, or 2.3%, including a favorable impact of $8.9 million from foreign exchange [201]. - North America net sales for the six months ended December 31, 2025 were $401.7 million, a decrease of $58.7 million, or 12.7%, compared to the prior year period [227]. - International net sales for the six months ended December 31, 2025 were $350.3 million, an increase of $4.6 million, or 1.3%, compared to the prior year period [230]. Debt and Liquidity - As of December 31, 2025, the company had $705.8 million of debt obligations maturing on December 22, 2026 [235]. - The company announced a strategic review to evaluate options to improve liquidity and reduce leverage, including the sale of its North American Snacks Business for $115 million [236]. - There is substantial doubt about the company's ability to continue as a going concern for at least one year following the issuance of these financial statements due to uncertainty regarding debt repayment [238]. - As of September 30, 2025, the Company's consolidated secured leverage ratio was 4.81:1.00, and the consolidated interest coverage ratio was 2.92:1.00, in compliance with all associated covenants [242]. - The maximum consolidated secured leverage ratio was amended to 5.00:1.00 for the quarter ending June 30, 2025, and 5.50:1.00 for the quarter ending September 30, 2025 [246]. Cash Flow - Cash and cash equivalents increased by $13.6 million to $68.0 million as of December 31, 2025, compared to $54.4 million at June 30, 2025 [249]. - Cash provided by operating activities was $28.5 million for the six months ended December 31, 2025, an increase of $8.4 million from the prior year [251]. - Free cash flow was $16.3 million for the six months ended December 31, 2025, an increase of $8.3 million from $8.0 million in the prior year [255]. - Cash used in investing activities was $10.4 million for the six months ended December 31, 2025, a change of $14.6 million from cash provided by investing activities in the prior year [252]. Impairment and Asset Valuation - The U.S. reporting unit's carrying amount exceeded its estimated fair value of $459,000, resulting in a non-cash impairment charge of $38,495, reducing goodwill to $273,826 [269]. - The U.K. reporting unit's carrying amount exceeded its estimated fair value of $270,525, leading to a non-cash impairment charge of $81,413, reducing goodwill to $32,331 [269]. - The impairment charge for the Hartley's® jelly indefinite-lived tradename was $11,917, recorded within intangibles and long-lived asset impairment [276]. - The Ella's Kitchen® baby and kids foods indefinite-lived tradename's estimated fair value exceeded its carrying amount by 12.8%, with a carrying value of $35,801 as of December 31, 2025 [275]. - The company performed a qualitative assessment of indefinite-lived intangible assets and determined that further quantitative testing was necessary for specific tradenames [274]. Share Repurchase and Stock Information - The Company did not repurchase any shares under the share repurchase program during the six months ended December 31, 2025, leaving $173.5 million of remaining authorization [256]. - The weighted average interest rate on outstanding borrowings was 8.26% at December 31, 2025, and 7.71% when including the impact of hedges [248]. Seasonal Impact - The company noted that certain product lines experience seasonal fluctuations, impacting quarterly results and cash flows [279].

Financial Performance - Net sales for the fiscal second quarter were $384 million, a decrease of 7% year-over-year, with organic net sales also down 7%[4] - The gross profit margin was 19.4%, reflecting a 330-basis point decrease from the prior year period[4] - The net loss for the quarter was $116 million, compared to a net loss of $104 million in the prior year, including pre-tax non-cash impairment charges of $132 million[4] - Adjusted EBITDA was $24 million, down from $38 million in the prior year period, representing a decrease of 37%[4] - The company reported a net loss of $116.0 million in Q2 2026, compared to a net loss of $104.0 million in Q2 2025, reflecting an increase in losses of 10.1%[31] - Adjusted EBITDA for Q2 2026 was not explicitly stated but is calculated as net loss before various adjustments, indicating ongoing financial challenges[31] - The company reported a GAAP operating loss of $98,822 thousand in Q2 FY26, compared to a loss of $91,899 thousand in Q2 FY25[42] - The company reported a GAAP net loss of $116,006 in Q2 FY26, compared to a net loss of $103,975 in Q2 FY25, reflecting a year-over-year increase of 10.4%[45] - Adjusted net loss for Q2 FY26 was $(2,735), a significant decline from an adjusted net income of $7,506 in Q2 FY25, indicating a shift in financial performance[45] Sales Performance - North America segment organic net sales decreased by 10% year-over-year, primarily driven by declines in snacks and baby formula[8] - International segment organic net sales decreased by 3% year-over-year, showing sequential improvement from a 4% decrease in the previous quarter[11] - Organic net sales for Q2 2026 were $384.1 million, a decrease of 6.6% compared to $411.5 million in Q2 2025[31] - Q2 FY26 consolidated net sales decreased by 6.7% to $384,120 thousand compared to Q2 FY25, which was $411,485 thousand[37] - North America net sales in Q2 FY26 were $197,821 thousand, down 13.7% from $229,289 thousand in Q2 FY25[37] - The company experienced a net sales decline of 12.7% in North America for the year-to-date period compared to the previous year[47] - The impact of divestitures and discontinued brands accounted for a reduction of $22,932 in net sales for Q2 FY25, highlighting the effect of strategic business decisions[47] - The company reported a negative impact of $13.484 million from divestitures and exited product categories on net sales in Q2 FY26[49] - The impact of foreign currency exchange on net sales was $9.036 million in Q2 FY26[49] Cash Flow and Debt - Net cash provided by operating activities was $37 million, an increase from $31 million in the prior year period[12] - Free cash flow for the quarter was $30 million, compared to $25 million in the prior year[12] - Total debt remained stable at $705 million, with net debt decreasing to $637 million from $650 million at the beginning of the fiscal year[12] - Free cash flow for Q2 2026 was $36.97 million, an increase from $30.91 million in Q2 2025, showing improved cash generation from operations[35] - Net debt as of December 31, 2025, was $636.686 million, a decrease from $650.466 million as of June 30, 2025[55] Impairment and Goodwill - Goodwill impairment for Q2 2026 was $119.9 million, significantly higher than $91.3 million in Q2 2025, impacting overall financial performance[31] - The company incurred goodwill impairment charges of $119.908 million in Q2 FY26[51] Strategic Initiatives - The company is advancing its turnaround strategy, including the divestiture of its North American snack business to improve financial flexibility and margins[2] - The company continues to focus on organic net sales growth, excluding the impact of acquisitions and divestitures, to provide clearer insights into operational performance[29] - The company is focusing on productivity and transformation costs, which amounted to $5,234 thousand in Q2 FY26[42]

Core Insights - The Hain Celestial Group reported a net cash provided by operations increase of 20% year-over-year, indicating strong cash delivery for the fiscal second quarter ended December 31, 2025 [1][2]. Financial Highlights - Net sales for the fiscal second quarter were $384 million, a decrease of 7% year-over-year, with organic net sales also down by 7% [7][8]. - The gross profit margin was 19.4%, reflecting a 330-basis point decrease from the prior year, while the adjusted gross profit margin was 19.5%, a 340-basis point decrease [7][10]. - The company reported a net loss of $116 million, compared to a net loss of $104 million in the prior year period, which included pre-tax non-cash impairment charges of $132 million [7][11]. - Adjusted EBITDA was $24 million, down from $38 million in the prior year period, marking a 57% decrease [11][14]. Cash Flow and Balance Sheet Highlights - Net cash provided by operating activities was $37 million, up from $31 million in the prior year period, while free cash flow increased to $30 million from $25 million [7][39]. - Total debt remained stable at $705 million, with net debt decreasing to $637 million from $650 million at the beginning of the fiscal year [7][39]. Segment Highlights - North America segment net sales were $198 million, down 14% year-over-year, primarily due to a 10% decrease in organic net sales driven by snacks and baby formula [8][9]. - International segment net sales were $186 million, reflecting a 2% increase year-over-year, although organic net sales decreased by 3% [8][12]. - The gross profit for the North America segment was $41 million, a decrease of 28% year-over-year, while the international segment gross profit was $34 million, an 8% decrease [10][13]. Category Highlights - Snacks experienced a significant organic net sales decline of 20% year-over-year, attributed to distribution losses and velocity challenges [19]. - Baby & Kids category saw a 14% decline in organic net sales, primarily due to industry-wide volume softness [20]. - Beverages category reported a 3% increase in organic net sales, driven by growth in tea in North America [21].

Core Insights - Hain Celestial Group, Inc. has agreed to sell its North American Snacks business to Snackruptors Inc. for $115 million in cash, marking a significant step in its portfolio optimization strategy [1][9] - The North American segment experienced a 12% decline in net sales and a 7% decrease in organic net sales in Q1 of fiscal 2026, primarily due to weaker snack volumes [2] - The North American snacks business contributed 22% to fiscal 2025 consolidated net sales but generated minimal EBITDA, indicating limited profitability [2][9] - Post-divestiture, Hain Celestial will concentrate on higher-margin categories such as tea, yogurt, baby and kids nutrition, and meal preparation platforms [3][9] - CEO Alison Lewis emphasized that the proceeds from the sale will be used to reduce debt, enhancing financial flexibility and supporting sustainable growth [4] - The transaction is expected to close by February 28, 2026, and is seen as a pivotal milestone for the company in enhancing shareholder value [5] Financial Performance - Hain Celestial's remaining North American portfolio shows stronger financial performance with low double-digit EBITDA margins and gross margins above 30% [3] - Hain's shares have decreased by 19.1% over the past six months, contrasting with the industry's growth of 10.4% [6] - The company currently has a forward price-to-earnings ratio of 17.66, which is higher than the industry average of 15.02 [7] Earnings Estimates - The Zacks Consensus Estimate for Hain Celestial's current fiscal-year earnings implies a year-over-year decline of 122.2% [10][15] - Current estimates for the upcoming quarters show a projected earnings per share of -0.03 for Q4 2025 and 0.06 for Q1 2026 [10]

Core Viewpoint - Hain Celestial Group has agreed to sell its North American Snacks business to Snackruptors Inc. for $115 million in cash, aiming to strengthen its financial position and focus on core categories with better growth potential [1][2][5]. Financial Impact - The North American Snacks portfolio accounted for 22% of Hain Celestial's net sales in fiscal 2025 and 38% of the North America segment's net sales, but contributed negligibly to EBITDA over the past year [3]. - The remaining North American portfolio is expected to deliver EBITDA margins in the low double digits, supported by gross margins exceeding 30% [3]. Strategic Focus - Post-transaction, Hain Celestial will concentrate on flagship categories such as tea, yogurt, and baby/kids products, along with meal preparation platforms [4]. - Key brands in North America include Celestial Seasonings teas, The Greek Gods yogurt, Earth's Best Organic baby foods, and Spectrum Organic culinary oils [4]. Leadership Commentary - Alison Lewis, President and CEO of Hain Celestial, emphasized that the sale is a strategic move to sharpen focus on key markets and categories, with proceeds aimed at debt reduction to enhance financial flexibility and support sustainable growth [5]. - Rick Taborda, President of Snackruptors, expressed enthusiasm about acquiring the snack brands, highlighting their growth potential and fit with Snackruptors' existing business [5]. Transaction Details - The transaction is expected to close by February 28, 2026, pending customary closing conditions, with further details to be discussed in the upcoming Q2 Fiscal Year 2026 earnings call [5]. - Goldman Sachs & Co. LLC is acting as the financial advisor for Hain Celestial, while Cravath, Swaine & Moore LLP is providing legal counsel [6].

Core Viewpoint - Hain Celestial Group, Inc. will release its fiscal second quarter financial results on February 9, 2026, and will host a conference call to discuss these results [1]. Group 1: Financial Results Announcement - The financial results will be released before the market opens on February 9, 2026 [1]. - A conference call will be held at 8:00 AM ET to discuss the results [1]. Group 2: Accessing the Conference Call - The conference call can be accessed by dialing (800) 715-9871 or (646) 307-1963 with conference ID: 5099081 [2]. - A replay of the call will be available until February 16, 2026, accessible by dialing (800) 770-2030 or (609) 800-9909 with the same conference access ID [2]. Group 3: Company Overview - Hain Celestial is a leading health and wellness company focused on inspiring healthier living through better-for-you brands [3]. - The company has been delivering nutrition and well-being for over 30 years and markets products in over 70 countries [3]. - Key brands include Garden Veggie Snacks™, Terra® chips, Earth's Best® Organic, and Celestial Seasonings® teas among others [3].

Core Viewpoint - Hain Celestial Group has appointed Alison E. Lewis as President and Chief Executive Officer, effective immediately, following her role as Interim CEO since May 2025 [1][2]. Group 1: Leadership Changes - Alison E. Lewis has been confirmed as the CEO after demonstrating effective leadership and strategic initiatives during her interim period [1][2]. - The Board of Directors expressed confidence in Lewis's ability to create shareholder value and lead the company through a turnaround agenda focused on cost reduction and growth [2]. Group 2: Strategic Focus - The company is concentrating on stabilizing sales, improving profitability, optimizing cash flow, and deleveraging its balance sheet [2]. - Lewis emphasized the importance of a strategic review in collaboration with Goldman Sachs to reposition the company for future success [2]. Group 3: Background of Alison E. Lewis - Alison E. Lewis has extensive experience in the consumer-packaged goods industry, having held significant roles at Kimberly-Clark, Johnson & Johnson, and Coca-Cola [3]. - Her expertise includes driving growth strategies, market execution, and innovation, particularly in digital-first marketing and e-commerce [3]. Group 4: Company Overview - Hain Celestial is a leading health and wellness company focused on inspiring healthier living through its diverse range of brands [4]. - The company markets products in over 70 countries, including well-known brands such as Garden Veggie Snacks™, Earth's Best® Organic, and Celestial Seasonings® teas [4].