LAKE SUCCESS, N.Y. — He may be less than a week into the job, but Mark L. Schiller, president and CEO of The Hain Celestial Group Inc., recognizes the opportunities laid out before him.
“As I reflect on the path ahead, I realize that I’m privileged to lead a multibillion-dollar company with branded products sold in over 80 countries at a time when consumer demand for organic, natural and better-for-you products continues to grow,” Schiller told analysts during his first earnings call on Nov. 8. “I see great potential and significant opportunity to accelerate the vision and mission started over 25 years ago, as we further build consumer awareness, loyalty and access to our portfolio of brands. It’s truly an honor to lead Hain Celestial, and I would like to thank all of our passionate employees and external stakeholders around the world for the warm welcome.”
Schiller, who succeeded Irwin D. Simon, said he will rely on his strong operating background to help deal with the roadblocks Hain will face. Hain is facing many of the same challenges that Pinnacle Foods dealt with during his time as chief commercial officer at the Parsippany, New Jersey-based company, he said.
“While the portfolio at Hain competes in more on-trend categories with better growth prospects (than Pinnacle), we have a similar need to reinvigorate and differentiate our brands with world-class marketing and innovation,” Schiller said. “We need to manage complexity and drive out costs. We need to expand our distribution, deliver smart pricing and improve efficiency.”
This week marks the beginning of Hain’s journey into a world-class operator, Schiller said, and over the next several weeks and months he intends to listen, learn and thoroughly evaluate and refine the company’s strategic priority.
“I intend to focus on bringing operational excellence in all key areas of the business, and I’m eager to accelerate our marketing and innovation efforts, execute Project Terra and refine our processes to ensure consistent and reliable earnings growth,” he said.
Schiller expects the situation assessment and corresponding strategy refinement at Hain to take about 90 days. He said he intends to provide details on his findings and clarify how Hain’s path will evolve early next year at the Consumer Analyst Group of New York conference in February.
In the meantime, Hain will look for ways to rejuvenate the business after a difficult start to fiscal 2019.
The company sustained a loss of $37,425,000 in the first quarter ended Sept. 30, which compared with income of $19,846,000, equal to 19 cents per share on the common stock, in the same period a year ago. The most recent quarterly results included a loss of $14,324,000 related to discontinued operations.
Adjusted EBITA totaled $34,057,000 in the quarter, down from $53,461,000 in the same period a year ago.
Net sales also slipped in the quarter, falling 5 percent to $560,833,000 from $589,219,000 in the same period a year ago.
Operating income at Hain Celestial United States totaled $2.2 million in the first quarter, down 90 percent from the same period a year ago, and adjusted operating income was $7.7 million, down 67 percent. The declines reflected higher planned trade investments to drive future period growth and increased freight and logistic costs, Hain said.
Net sales in Hain Celestial United States decreased 8 percent in the first quarter to $244 million.
“The decline in the United States segment was primarily driven by declines in the Pantry and Better-For-You Snacks platforms, partially offset by an increase in the Pure Personal Care platform,” Hain said. “The Pure Personal Care Platform’s strong growth for the first quarter was offset, in part, by production challenges within the quarter. United States net sales also were impacted by the previously disclosed strategic decision to no longer support certain lower margin SKUs and focus on the top 500 SKUs in order to reduce complexity and increase gross margin over time.”