EPS of $-0.22 decreased by 83.3% from previous year
Gross margin of 20.7%
Net income of -19.66M
"N/A" - N/A
The Hain Celestial Group Inc (0J2I.L) QQ1 2025 Earnings Analysis: Margin Stabilization Amid Revenue Decline and Leverage Challenges
Executive Summary
The Hain Celestial Group reported QQ1 2025 revenue of $394.6 million, a year-over-year decline of 7.2% and a sequential decline of 5.8%. The quarter yielded a positive operating income of $3.05 million, with an operating margin of 0.77%, marking a notable improvement from the prior year’s period, but the company still posted a net loss of $19.66 million and an EPS of -$0.22. The negative net income was driven by a sizable non-operating expense line (total other income/expenses net of -$19.04 million) despite modest EBITDA of $9.19 million and an EBITDA margin of roughly 2.3%. Cash flow from operations was negative at $10.79 million and free cash flow stood at -$16.54 million, contributing to a cash balance of $56.85 million and net debt of $762.42 million. Liquidity remains adequate (current ratio 2.01) but leverage remains a constraint (long-term debt $811.70 million; debt-to-capitalization ~0.46; interest coverage ~1.03x). Management commentary for QQ1 2025 was not captured in the provided transcript dataset, limiting direct quote-based insights. The quarterly performance shows operating profitability returning to positive territory on a small base, but the ongoing losses from non-operating items and weak cash generation pose continued challenges for near-term profitability and balance sheet strength. Investors should monitor margin progression, deleveraging efforts, and working capital trends as catalysts for a potential earnings improvement path.
Key Performance Indicators
Revenue
394.60M
QoQ: -5.78% | YoY:-7.16%
Gross Profit
81.61M
20.68% margin
QoQ: -16.73% | YoY:-2.78%
Operating Income
3.05M
QoQ: -74.58% | YoY:234.02%
Net Income
-19.66M
QoQ: -569.49% | YoY:-89.50%
EPS
-0.22
QoQ: -572.78% | YoY:-83.33%
Revenue Trend
Margin Analysis
Key Insights
Revenue: $394.6m; YoY -7.16%, QoQ -5.78%
Gross Profit: $81.61m; Gross Margin ~20.68%
EBITDA: $9.19m; EBITDA Margin ~2.33%
Operating Income: $3.05m; Operating Margin ~0.77%
Net Income: -$19.66m; Net Margin -4.98%
Financial Highlights
Revenue and profitability snapshot (USD):
- Revenue: $394.6m; YoY -7.16%, QoQ -5.78%
- Gross Profit: $81.61m; Gross Margin ~20.68%
- EBITDA: $9.19m; EBITDA Margin ~2.33%
- Operating Income: $3.05m; Operating Margin ~0.77%
- Net Income: -$19.66m; Net Margin -4.98%
- EPS: -$0.22; Diluted EPS -$0.22
Cash flow and balance sheet:
- Net Cash Provided by Operating Activities: -$10.79m; Free Cash Flow: -$16.54m
- Cash and Cash Equivalents: $56.85m; Net Debt: $762.42m
- Total Assets: $2,134.81m; Total Liabilities: $1,171.15m; Total Equity: $963.66m
- Current Ratio: 2.01; Quick Ratio: 1.05; Cash Ratio: 0.20
- Debt: Total Debt $819.27m; Long-Term Debt $811.70m; Interest Coverage ~1.03x
Notes: All figures in USD unless stated; numbers reflect QQ1 2025 quarter results as reported.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
394.60M
-7.16%
-5.78%
Gross Profit
81.61M
-2.78%
-16.73%
Operating Income
3.05M
234.02%
-74.58%
Net Income
-19.66M
-89.50%
-569.49%
EPS
-0.22
-83.33%
-572.78%
Key Financial Ratios
currentRatio
2.01
grossProfitMargin
20.1%
operatingProfitMargin
2.28%
netProfitMargin
-4.98%
returnOnAssets
-0.92%
returnOnEquity
-2.04%
debtEquityRatio
0.85
operatingCashFlowPerShare
$-0.12
freeCashFlowPerShare
$-0.18
priceToBookRatio
0.8
priceEarningsRatio
-9.79
Net Income vs. Revenue
Expense Breakdown
Management Commentary
No earnings call transcript data provided in the current dataset. As a result, thematic synthesis and management quotes from the QQ1 2025 earnings call could not be extracted. The analysis below therefore relies on the published financial results and historical balance sheet/ratio context. If/when transcript data become available, they should be incorporated to enrich themes around strategy execution, cost discipline, and growth initiatives.
N/A
— N/A
N/A
— N/A
Forward Guidance
No formal forward guidance was published in the QQ1 2025 release. Given the revenue decline vs. the prior year and a thin positive operating margin, the near-term focus implied by the results is likely on margin stabilization, cost control, and balance sheet optimization to support deleveraging. Investors should monitor: (i) trajectory of revenue stabilization or growth in core brands and channels (especially organic/natural positioning and e-commerce), (ii) gross margin improvements toward the mid-to-upper teens/low 20s range through pricing, mix, and cost efficiencies, (iii) reduction of non-operating expenses or one-time items that suppress net profitability, (iv) deleveraging progress and interest coverage improvements, and (v) working capital efficiency (receivables and inventory turnover). In scenarios where these factors improve, the stock could re-rate on earnings visibility; downside risk persists if revenue decline accelerates or if non-operating costs remain a drag.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
0J2I.L Focus
20.68%
2.28%
-2.04%
-9.79%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Medium-term investment thesis hinges on revenue stabilization and margin normalization. The QQ1 2025 results show operating profitability returning to positive territory, but the company remains net-lossful with negative free cash flow and a debt-heavy balance sheet. If Hain Celestial can sustain a modest revenue base while driving gross margin improvements and reduce non-operating costs, the path to earnings recovery could gain traction. The key catalysts to watch include deleveraging progress, working capital optimization, and sustained margin expansion. Given current leverage and cash flow dynamics, investors should apply a conservative stance until a durable improvement in profitability and cash generation is evident. The stock’s valuation should be weighed against the balance sheet and the ability to sustain margin improvements, with attention to potential multiple expansion only as visibility on earnings turns positive.
Key Investment Factors
Growth Potential
Growth opportunities rest in expanding the organic/natural product portfolio, international distribution, and e-commerce channels. If revenue stabilizes and gross margins improve toward the low-20s, operating leverage could drive a more favorable earnings trajectory.
Profitability Risk
Key risks include sustained net losses driven by non-operating expenses, high leverage with limited interest coverage, commodity and currency volatility, and competition in the packaged foods space that could pressure pricing and margins.
Financial Position
Balanced asset base with meaningful goodwill/intangible assets and a debt-heavy capital structure. Liquidity is adequate but leverage and negative free cash flow pose intermediate-term financial risk.
SWOT Analysis
Strengths
Diversified organic and natural product portfolio across North America and International markets.
Positive quarterly operating income (Q1 2025) despite revenue decline, indicating some margin discipline and operating leverage.
Moderate liquidity with current ratio around 2.0 and a cash balance of approximately $56.9m.
Established brand portfolio (e.g., Celestial Seasonings, Goddess) and multi-channel distribution
Significant scale with total assets near $2.13B and a broad non-current asset base supporting brand value.
Weaknesses
Net loss of $19.66m and negative free cash flow (-$16.54m) in QQ1 2025.
High leverage with net debt ~$762.4m and interest coverage ~1.03x.
Negative earnings per share and negative net income despite positive EBITDA, driven by non-operating expenses.
Reliance on non-operating items that erode net profitability; relatively modest EBITDA margin (~2.3%).
Weak near-term cash flow generation and ongoing capital expenditure pressure.
Opportunities
Expansion of core organic/natural product franchises into new geographies and channels (including e-commerce).
Margin expansion potential through mix optimization, pricing, and cost-savings initiatives.
Potential deleveraging through improved working capital management and potential strategic partnerships or optimization of discretionary spend.
Threats
Industry competition in packaged foods with pricing pressure and margin compression.
Commodity price volatility and currency risk affecting input costs and international sales.
Regulatory and labeling changes in organic/natural products impacting costs and go-to-market strategies.
Macro headwinds affecting consumer discretionary spend and demand for premium/natural products.
The Hain Celestial Group Inc (0J2I.L) QQ4 2025 Results: Operating Profitability Amid Non-Operating Headwinds in a Challenging Consumer Defensive Envir...