Maybe the company's new name should be "Hain Celestial 3.0," as the 28-year-old diversified wellness company becomes a pure-play but more global food company.
Mark Schiller, CEO of just three years, explained in a Sept. 28 investor day webcast that the company is embarking on its second and presumably final transition. With mostly divestitures but a few acquisitions plus attention to detail within the organization, Hain is becoming a smaller, focused but more profitable food-only company.
Since he took over in 2018, Hain has sold or eliminated 23 brands and 1,000 SKUs with almost $1 billion in sales.
EVP and CFO Javier Idrovo said fiscal year 2022, which just began July 1, "is a bridge year as we pivot to Hain 3.0, spanning FY 23-25."
This final transformation will require shedding the personal care business – such brands as Jason, Alba Botanicals and Live Clean. That business already is being separated from the company with the goal of spinning them off or selling them.
Schiller explained the three iterations. Hain 1.0, as built by founder and former CEO Irwin Simon, was a "one-stop shop for all things health and wellness." That included domestic and European operations and businesses in packaged foods, fresh chicken and personal care. He said guiding principles included "growth at any cost" driven by sometimes disparate acquisitions with "complexity encouraged."
The low point for the company was 2016, when questionable accounting issues became public, the company failed to file an annual report and Form 10-K on time and the stock was delisted by the Nasdaq Stock Market.
When Schiller took over in 2018, he embarked on Hain 2.0, which "transformed Hain North America from a holding company to an operating company," he said. Assets were evaluated with an eye toward focus, profitability and simplification, and somewhat with an emphasis on North America.
He singled out Earth's Best organic baby food as a brand with high potential but little investment.
Despite a recent focus on North America, "We have an exceptional, and often overlooked, international food business," he added.
Hain 2.0 may be working. While sales have shrunk from $2.1 billion in FY2019 to $2.0 billion to $1.97 billion for FY 2021, net income went from an $80 million loss in FY20 to a $77 million profit in 2021. The stock has been up around $40 a share, quite an improvement from $15 on Dec 21, 2018. Debt has been cut substantially.
