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Hain owns dozens of top-selling brands. Source: Hain Celestial Group.

Better-for-you and organic packaged foods company Hain Celestial Group (NASDAQ:HAIN) has grown at a tremendous -- dare I say Chipotle-esque -- rate over the past few years. In August, the company reported the most successful year in its history, with net sales up 24% year over year to $2.15 billion, adjusted earnings per share up 25%, and $143 million in operating cash flow -- the most in company history. 

This high rate of growth isn't new: Hain has increased sales by 126% over the past five years, earning it the 61st position on Fortune magazine's list of the 100 fastest-growing companies in America for 2014. Will the growth rate continue?

Competition growing, but so are Hain's brands and marketing efforts
Competition isn't something new for Hain Celestial, but it has certainly increased over the past year. Earlier this spring, Wild Oats signed a deal to sell about 100 different products in Wal-Mart stores, marking a major expansion of the selection of organic and healthier packaged foods available at the retail giant's locations. Wild Oats products are also available at Fresh & Easy, which operates around 160 locations. 

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Wild Oats Pineapple Salsa

New competition. Source: Wild Oats

urthermore, traditional packaged foods makers like General Mills aren't ignoring the change in consumer interests, as evidenced by its acquisition of Annie's in October. In short, competition is heating up, but that's because more consumers are looking for these kinds of products. Hain is just as active in expanding its portfolio, having made three significant acquisitions so far in 2014: Tilda, a leading international brand of packaged rice products, Rudi's Organic Bakery, one of the most popular brands of gluten-free and organic baked goods in the U.S., and the remaining 51% of Hain Pure Protein that it did not already own. 

Hain also announced on its earnings call last quarter that it would launch a new marketing campaign in the first quarter, and that it would increase spending in digital marketing on social media and point-of-purchase marketing. 

Leading position makes for high expectations 
In the first quarter of 2013, Hain Celestial produced $477 million in sales, and Wall Street is expecting between $625.8 and $648.8 million for the upcoming report -- meaning more than 30% growth from last year. Part of this is due to the strength of the recent acquisitions, which were all made after the first quarter a year ago. Hain management is projecting sales growth for the full year of about 27%, with revenue between $2.725 million and $2.8 billion. 

Analyst expectations for earnings per share are $0.67, a 28.8% increase from the year-ago quarter. Company guidance for EPS growth for the full year is between 17% and 23%. 

In short, if Hain Celestial does "miss" on earnings, be sure to take the numbers in their proper context. Did it miss Wall Street's expectations, or management's projections? 

Keeping the long view 
Whether the company crushes expectations or misses, the long-term trends are more important. Keep an eye on the bigger picture. 

The bigger picture for Hain? A solid company with great management, operating in an industry with growing demand for its products. Not a bad place to start, especially if growth remains strong. 

 

 

Jason Hall owns shares of Chipotle Mexican Grill and Hain Celestial. The Motley Fool recommends Chipotle Mexican Grill and Hain Celestial. The Motley Fool owns shares of Chipotle Mexican Grill and Hain Celestial. 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.