Can Hain Celestial Group Maintain Its Organic Firepower?

The Hain Celestial Group Inc. stock has been running in place so far in 2014, but that could change if it comes through with strong quarterly results on Wednesday.

Aug 18, 2014 at 5:08PM

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. 

Top dividend stocks for the next decade
The smartest investors know that dividend stocks simply crush their non-dividend-paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

John Mackey, co-CEO of Whole Foods Market, is a member of The Motley Fool's board of directors. Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Hain Celestial and Whole Foods Market. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers