US natural and organic food company Hain Celestial has reported lower net income due to higher costs and investment in a reduced-carb range of products.
The company posted net income of US$5.0m, or 14 cents per share, for the third quarter to 31 March, compared to $7.9m, or 23 cents per share, in the third quarter of the prior year. Net sales rose almost 6% to $136.9m.
“In the quarter, we had higher costs, a soup supply issue, and we took advantage of our investment opportunities behind the launch of CarbFit,” said CEO Irwin Simon.
“These events, which impacted earnings, do not obscure the underlying health of our brands and business. The performance of our key brands and business this quarter demonstrates that we maintain and continue to improve our ability to meet the demand for natural and organic products,” he added.
The company said most of its key brands posted positive sales gains. In the third quarter the company experienced 21% growth in its snacks business, 6% growth at Celestial Seasonings, and 24% growth at Earth’s Best. Its Canadian business grew 24% while its European business grew 36%.
Hain Celestial said it had laid a strong foundation for CarbFit, which had been well-received by consumers.
“With the continuing increases in costs, the time it will take to rebuild our soup position despite having our co-packer issues resolved – including securing opportunities to strategically invest in our soup business to ensure it is well positioned for next soup season – and with our recently announced price adjustments not effective until July, we anticipate that our fourth quarter earnings this year will be in the range of 13 to 15 cents per share on revenues of $127m to $130m,” Simon added.