However, the new guidance slashed adjusted EPS estimates in half, and the company now says profit will fall 40% to 48% in fiscal 2019.Īt the high end of that guidance - $0.70 per share - Hain shares trade for 23 times 2019 adjusted earnings. Only three months ago, management was expecting adjusted earnings per share to actually go up this year - as much as 19%. The impacts of these numbers become really compounded on the bottom line. The company cut fiscal 2019 guidance sharply in the Q2 earnings release it now expects full-year sales to fall 4% to 6%, or double the prior guidance, and adjusted EBITDA to fall 22% to 28% from last year, versus its original guidance of a 7% to 17% decline. While the cash influx and removal of the operating expense of that business should help Hain focus on its remaining core packaged-foods business, its other segments are in for continued struggles. Hain Pure Protein - which is reported under "discontinued operations" - generated a $59.6 million operating loss in the quarter. The company's long-planned sale of its poultry business, Hain Pure Protein, is nearing a conclusion in "the coming months" this will both result in a cash infusion from the proceeds, and help stem the company's operating losses. However, there are some potential positives on the horizon.
Any way you slice it the profit free#
And the fact that it continues to generate operating losses, now burning through cash instead of generating free cash flow, is concerning. This time around, it reported a $29.3 million net loss, and $15.4 million operating loss.Īny way you slice it, Hain's quarter wasn't pretty. Last year Hain made $43.1 million and generated $31 million in operating income in its second quarter. The steady erosion of the operating results over the past year caused the company to report both a net loss and an operating loss. Hain provides adjusted gross margin that excludes those items, and while its 20.3% adjusted gross margin was better, this number was actually down even more - 240 basis points - than GAAP gross margin. Gross margin was down 210 basis points to 19.6%, and not because of one-time events or expenses related to ongoing strategic changes. Man looking at a line on a chart crashing through the floorįurthermore, its profitability continues to contract.
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