Can Hain Celestial Group Maintain Its Organic Firepower?

The Hain Celestial Group  (NASDAQ: HAIN  )  reports fresh quarterly results on Wednesday morning, and it's easy to be scared. Whole Foods Market reported uninspiring quarterly results late last month, and if the leading organic supermarket chain isn't faring well, it's not much of a stretch to expect one of its key suppliers to also disappoint the market. 

Not so fast. Hain Celestial's growth over the years has come partly on shrewd acquisitions, but also on the growing number of outlets for natural and organic foodstuffs. It's not just Whole Foods Market these days. Many of the factors weighing on Whole Foods Market -- discounting of organics at the world's largest retailer and more grocers devoting additional shelf space to organics -- actually benefit Hain Celestial. 

We saw this play out three months ago in Hain Celestial's previous quarterly outing. Shortly after Whole Foods Market posted financial results that fell short of expectations, leading to yet another guidance revision lower at the former market darling, Hain Celestial chimed in with blowout results. 

Net sales and operating profits rose 22% and 25%, respectively, with the company's adjusted profit of $0.88 a share clocking in well ahead of the $0.86 a share analysts were targeting. Whole Foods Market, on the other hand, checked in with just 10% in top-line growth. Hain Celestial made a solid report even better by boosting its top- and bottom-line guidance, calling for a 24% gain in sales that implies accelerating growth during the balance of 2014.

Whole Foods Market went on to repeat that 10% top-line growth in its latest quarter. Wall Street sees Hain Celestial's net sales climbing 25% to $578.3 million. Analysts also see earnings per share climbing 37% to $0.89. That's ambitious, but Hain Celestial has beaten Wall Street profit forecasts in three of the past four quarters. 

It's not the only reason to head into Hain Celestial's upcoming report with some degree of confidence. Jim Cramer -- on CNBC's Mad Money last week -- named Hain Celestial as a logical buyout candidate. He sees General Mills or Kellogg as possibly benefiting from snapping it up in an era of consolidation to offset slowing growth.

"I can see either buying Hain," Cramer says. "An acquisition would give either company instant credibility in the natural and organic sections of the supermarket, the only real growth aisles out there."

Cramer's merely thinking out loud. Hain Celestial is unlikely to offer itself up as a buyout candidate unless a generous buyout premium is attached. However, investors buying into Cramer's logic will find solace in his argument if Hain Celestial disappoints investors on Wednesday morning, prompting the market to wonder if it would entertain buyout offers. 

Hain Celestial's stock is actually trading slightly lower in 2014 going into Wednesday morning's report, but the shares did pop 67% higher in 2013. A strong report could result in the stock turning positive year to date, but a bad report could trigger speculation of Hain Celestial as a logical buyout target again. 

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