Organic and natural foods company The Hain Celestial Group, Inc. (NASDAQ:HAIN) has improved the health of its shareholders’ portfolio by 50% this year. Its growth rate has been fantastic despite some inconsistent performances over the past few quarters when The Hain Celestial Group, Inc. (NASDAQ:HAIN) failed to satisfy consensus estimates.
But the company finally managed to top Street expectations in the fourth quarter. In addition, The Hain Celestial Group, Inc. (NASDAQ:HAIN)’s outlook turned out to be better than expected, and this sent shares soaring.
Solid growth with more to come
The Hain Celestial Group, Inc. (NASDAQ:HAIN) witnessed terrific revenue growth of 32% in the previous quarter, while net income and operating margin both improved. With the global organic food market expected to be worth around $105 billion by 2015, there is enough room for The Hain Celestial Group, Inc. (NASDAQ:HAIN) to grow further.
The Hain Celestial Group, Inc. (NASDAQ:HAIN) has grown on the back of acquisitions so far, but its own brands have also been doing well. Its in-house brands were up in the high single digits in the previous quarter, and Hain expects many of its brands, which are currently worth $100 million and $50 million annually, to double in size going forward.
Hain’s private label brands in the U.K., a market that accounts for a fourth of its revenue, are gaining traction and contributed 51% of overall food sales in the nation. The company is planning to introduce more private label products and kicked off the initiative by launching eight products in May. Hain has 10 brands in the U.K. that are in the top two in their respective categories.
Hain is still integrating the three acquisitions it made last year. Management is optimistic about BluePrint and Ella’s Kitchen, two of these acquisitions. With BluePrint, Hain expanded its product portfolio to include the juice category, while with Ella’s Kitchen it formed a global infant, toddler and kids division.
In the U.S., Hain saw robust gains with revenue up almost 18% from the year-ago period. More importantly, product sales in the U.S. are up an impressive 36% this year, and Hain credits its innovation for this terrific performance. The company has launched 150 new products this year, including the MaraNatha coconut almond butter, organic veggie and protein pouches, barbecued chicken nuggets, etc.
It expects these products to continue to gain traction and lead to better revenue in the future. Apart from new product launches, Hain is also focused on trimming down costs and driving productivity savings. Through initiatives such as producing Earth’s Best pouches internally and increasing throughput at certain manufacturing facilities, Hain was able to achieve $30 million in productivity savings in fiscal 2013.
