Hain Celestial, the US group behind brands including Tilda rice and Ella’s Kitchen baby food, has pushed back the publication of its annual results, with the company reviewing the payment of concessions to distributors in the US.
The company said it had “identified concessions that were granted to certain distributors in the United States” during its fourth quarter, which ran until the end of June.
Hain Celestial said it is “evaluating whether the revenue associated with those concessions was accounted for in the correct period”. It added it is reviewing “its internal control over financial reporting”.
In its statement to the market, Hain Celestial also said it “does not expect” to achieve its previously announced guidance for its 2016 fiscal year.
The group, which also owns Greek Gods yogurt and Linda McCartney vegetarian foods, said in the past it had recognised revenue on the sale of its products to certain distributors at the time the products are shipped to them. Hain Celestial said it is weighing up whether the revenue associated with the concessions granted to certain distributors should instead have been recognised at the time the products sell through its distributors to the end customers.
“The company expects that any potential changes in the timing of the recognition of revenue with respect to these transactions should not impact the total amount of revenue ultimately recognized by the company with respect to such distributors and does not reflect on the validity of the underlying transactions with respect to such distributors.”
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The Earth’s Best baby food owner expects its net sales to grow by around 9-10% to US$2.95bn to US$2.97bn and its earnings per diluted share to grow approximately 6-9% to US$2.00 to US$2.04.
In January, Hain Celestial cut its forecasts after a challenging start to its financial year. It then estimated full-year net sales would US$2.9bn to US$3.04bn, with earnings per share in the range of US$1.95 to US$2.10.