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HAIN
Earnings call · Jun 2026 (Q4 FY26)

HAIN CELESTIAL GROUP Q4 FY26 earnings call HAIN

Sep 14, 2026 Source

Executive summary

The Hain Celestial Group, Inc. Q4 FY26 — Portfolio Simplification and Debt Reduction

Hain Celestial completed a pivotal FY26, simplifying its portfolio through divestitures and significantly reducing debt, notably with the pending sale of its international business. The company is now focused on its North American operations, which demonstrated improving momentum and profitability in Q4, driven by streamlined execution and cost discipline. The immediate priority is managing capital structure and aligning costs for the future North American business.

Highlights

5

  • North America organic net sales returned to growth, increasing 2% year-over-year in Q4.

  • North America adjusted gross margin expanded by nearly 1,200 basis points in Q4.

  • North America adjusted EBITDA increased by 55% year-over-year in Q4.

  • Full-year free cash flow was $58 million, compared to an outflow of $3 million in the prior year.

  • Net debt was reduced by $151 million in FY26, representing a 25% reduction.

Concerns

5

  • International organic net sales declined 4% year-over-year in Q4.

  • International adjusted gross margin decreased 555 basis points year-over-year in Q4.

  • International adjusted EBITDA decreased 41% year-over-year in Q4.

  • SG&A as a percentage of net sales increased to 23.8% in Q4 from 18.6% in the prior year, driven by strategic review costs and a lower sales base.

  • The international divestiture is contingent upon securing a credit agreement amendment to extend maturity, with a 30-day termination right for the buyer if not obtained.

Guidance & targets

CategoryTargetConfidence
International Divestiture Completion
fiscal second quarter
high materiality
Medium
Net Proceeds from International Divestiture
$305 million and $310 million
high materiality
High
Debt Reduction from Divestiture Proceeds
pay down the entirety of our outstanding term loan and more than 35% of the outstanding balance of our revolver
high materiality
High
Pro Forma Total Debt Outstanding
approximately $250 million
high materiality
High
Annual Run Rate Cost Improvement Completion
vast majority of that savings capture to be completed by the end of fiscal 2027
medium materiality
High
Pro Forma Gross Margin
approximately 30-plus percent
high materiality
High
Pro Forma Adjusted EBITDA Margin
low double-digit percentage
high materiality
High
Marketing Investment Increase
approximately 100 basis points of net sales
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
North America
Organic net sales returned to growth, primarily driven by meal prep and strong yogurt performance. Significant improvement in profitability following the Snacks divestiture, with gross margin expanding by nearly 1,200 basis points.
Organic net sales growth: 2% year-over-yearAdjusted gross margin: 31.1%Adjusted EBITDA: $16 millionAdjusted EBITDA as % of net sales: 14.4%Tariff refunds positive impact: $1.9 millionGrowth drivers: meal prep, yogurtOffsetting factors: lower sales in Baby & Kids
—2%—31.1% adjusted gross margin; 14.4% adjusted EBITDA as % of net sales
International
Organic net sales declined, but the decline moderated sequentially. Profitability was impacted by cost inflation, productivity shortfalls, and unfavorable mix, leading to a 555 basis point decrease in gross margin.
Organic net sales decline: 4% year-over-yearAdjusted gross margin: 16.6%Adjusted EBITDA: $12 millionAdjusted EBITDA as % of net sales: 8.1%Decline drivers: lower sales in meal prep and Baby and KidsOffsetting factors: growth in beveragesSequential improvement: 400 basis points moderation in decline vs Q3
—-4%—16.6% adjusted gross margin; 8.1% adjusted EBITDA as % of net sales

Product announcements

ProductTypeDetails
Hartley's renovation and innovationlaunch
Earth's Best Pures portfolio simplificationupdate
Snacks brand relaunchroadmap

Deals & partnerships

Aurelius Sale of international business $323 million in cash

The sale is contingent upon securing an amendment for the company's credit agreement to extend its maturity. If the amendment is not obtained within 30 days of signing, Aurelius has the right to terminate the agreement.

Undisclosed Sale of North American snacks business

Completed in fiscal Q3, marking a significant step in portfolio simplification.

Capital programs

Annual Run Rate Cost Improvement Program underway $16 million
Start: Summer 2026

Benefit:simplify our operating model and support the future growth of our North American business

Identified through a rigorous bottoms-up zero-based budgeting review. Expected to deliver more than $16 million of annual run rate cost improvement. One-time costs to implement are approximately $20 million, with 70% incurred in FY27 and the remainder in FY28.

Risks & headwinds

Credit agreement amendment contingency for international divestiture upcoming maturity date on the company's credit facilities in December

If the amendment is not obtained within 30 days of signing, Aurelius would have the right to terminate the agreement.

Mitigation:remain in active discussions with our lenders regarding an amendment of our credit agreement to extend the current maturity date

Dynamic environment and persistent challenges in certain categories ongoing

While the environment remains dynamic and challenges persist in certain categories

Mitigation:actions we are taking are beginning to strengthen the business and build the foundation for future growth

One-time costs associated with strategic plans FY27 and FY28

onetime costs to implement these savings will be approximately $20 million, with 70% of that incurred in fiscal 2027 and the remainder incurred in fiscal 2028.

Mitigation:balance these near-term requirements with disciplined capital allocation and our continued focus on exploring any and all opportunities to further reduce debt and address the upcoming maturity

What to watch in Q1 FY27

Credit agreement amendment

within 30 days of signing
Current active discussions with lenders
Target amendment secured

Why it matters

The international divestiture is contingent upon the company securing this amendment, and there can be no assurance that an amendment will be obtained. Failure to secure it could lead to termination of the divestiture agreement.

We remain in active discussions with our lenders regarding an amendment of our credit agreement to extend the current maturity date. If reached, the extension would be a near-term solution and an important step that provides additional flexibility as we continue to work on reducing our leverage.

2 min read 5 chapters

Detailed narrative

Portfolio Simplification and Debt Reduction

Hain Celestial reached a definitive agreement to sell its international business to Aurelius for $323 million in cash, following the fiscal Q3 divestiture of its North American snacks business. These actions represent significant milestones in simplifying the portfolio. The company reduced net debt by $151 million in FY26, a 25% reduction, through strategic actions and strong free cash flow generation of $58 million. Proceeds from the international sale are earmarked for further debt reduction, aiming for a pro forma total debt of approximately $250 million.

North America Performance Rebound

The North America business returned to organic net sales growth of 2% year-over-year in Q4 FY26. This segment also saw significant profitability improvements, with adjusted gross margin expanding by nearly 1,200 basis points and adjusted EBITDA increasing by 55% year-over-year. This performance reinforces confidence in the earnings power of the underlying North American portfolio, driven by streamlined execution, productivity initiatives, and disciplined cost management.

Strategic Priorities and Operational Improvements

The company made progress against its strategic priorities, including portfolio simplification, debt reduction, cash generation, and operational improvements. Key initiatives, dubbed '5 actions to win,' are gaining traction, leading to measurable results such as year-over-year expansion in innovation renewal rate (IRR) in both North America (high single-digit) and International (low teen percentage), and strong double-digit e-commerce sales growth in Q4.

Cost Structure Alignment and Future Profitability

A rigorous zero-based budgeting review identified specific actions to align the cost structure with the future North American business, expected to deliver over $16 million in annual run-rate cost improvement, mostly by the end of FY27. These actions are projected to support a pro forma gross margin of approximately 30-plus percent and a low double-digit adjusted EBITDA margin. The company also plans to increase marketing investment by approximately 100 basis points of net sales in FY27 to support key growth brands.

Capital Structure Management and Credit Agreement

Managing the capital structure and debt remains a top priority, especially with the upcoming maturity date of credit facilities in December. The international divestiture is contingent upon securing an amendment to the credit agreement to extend its maturity. The company is in active discussions with lenders, acknowledging that failure to obtain the amendment within 30 days of signing could grant the buyer the right to terminate the agreement.

AI-generated summary of the company's earnings call. Not investment advice.