Hain Celestial today (7 May) announced the start of a “comprehensive review” of its portfolio and the departure of its CEO.
The board of the US food and drinks group is embarking on a review “in light of recent performance”, chair Dawn Zier said.
Wendy Davidson, Hain Celestial’s president and CEO, is leaving the business “effective this morning”, a statement read.
Former Kimberly-Clark and Coca-Cola executive Alison Lewis, who has been on the Hain Celestial board since September, is stepping in on an interim basis.
The group, home to brands including Terra snacks and Celestial Seasonings teas, also reported a set of third-quarter and nine-month financial results that included lower sales and worsening profitability.
In the group’s last full financial year, which ran to 30 June, net sales were down and the company ran up a net loss of $75m, albeit lower than the $116.5m loss filed a year earlier.
Zier said today: “The board believes this is the right time to transition to new leadership. We appreciate that Alison Lewis, a seasoned executive with vast industry and leadership experience, has agreed to serve as interim president and CEO while we execute our succession plan. Alison has a track record of driving superior in-market execution, delivering disciplined and profitable revenue growth, and leveraging innovation to create value. During this transition period, we will remain focused on maximising the value of Hain.
"On behalf of the entire board, I want to thank Wendy for her contributions to the company and wish her the very best in the future.”
Davidson took the helm in 2023, setting about to make Hain Celestial a “bigger player” in the better-for-you category and centre resources on areas including snacks, kids’-focused products, meal prep and beverages.
Under Davidson, the company also sought to cut “lower margin” SKUs and sold brands including ParmCrisps and Thinsters.
Hain Celestial said today its review would “consider a broad range of strategic options to enhance value”.
Zier added: “In light of recent performance, the board has decided that a thorough evaluation of the company’s strategy and portfolio is warranted to determine the best approach to maximise shareholder value. With this review underway, we remain focused on operating our business effectively, ensuring we have a strong path to achieve sustainable growth and value creation.”
Third-quarter net sales, covering the period to the end of March, fell 11% to $390m. Organic net sales, excluding M&A, assets held for sale, categories exited and foreign exchange, decreased 5%.
Nine-month sales were down 9.2% at $1.20bn.
Hain Celestial booked a third-quarter operating loss of $121.1m, versus one of $27.9m a year earlier. Over the first nine months of the financial year, that meant an operating loss of $209.9m, against one of $31m in the corresponding period of the previous financial year.
The group posted a third-quarter net loss of $134.6m. A year earlier, it reported a net loss of $48.2m. Nine-month net losses were $258.2m, compared to $72.1m a year ago.
Hain Celestial said the third-quarter net loss included pre-tax, non-cash, impairment charges of $133m related to its US and Canada reporting units and assets held for sale.
“We are disappointed with our third-quarter results, which fell far short of our expectations primarily due to worse-than-expected performance in North America," Lewis said. "Despite the shortfall in net sales in the quarter, we are encouraged by a return to organic net sales growth in our international segment and continued progress in reducing net debt.
“Going forward, we are focused on five key drivers for improving value: simplifying our business and reducing overhead spending; accelerating renovation and innovation in our brands; implementing strategic revenue growth management and pricing actions; driving operational productivity and working capital reduction; and strengthening our digital capabilities.”
She added: “I look forward to leading Hain with the same level of commitment as if I were in the role permanently, with a goal of improving performance. We are fortunate to have a capable leadership team and we will continue to focus on enhancing our earnings power, strengthening our balance sheet and positioning the business for long-term success.”
