What Happened?
Shares of natural food company Hain Celestial (NASDAQ: HAIN) fell 4.3% in the morning session after the stock's negative momentum continued as the company reported third-quarter results that showed a significant earnings miss and a drop in year-over-year sales.
While revenue of $367.9 million slightly beat analyst estimates, it marked a 6.8% decline from the same quarter in the previous year. The main concern for investors was the adjusted earnings per share, which registered a loss of $0.08, missing expectations of a $0.05 loss. Furthermore, the company's organic revenue fell by 6% year-on-year, which was a larger drop than the 5.4% decline analysts had anticipated. The combination of falling sales and a wider-than-expected loss appeared to drive the negative market reaction.
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What Is The Market Telling Us
Hain Celestial’s shares are extremely volatile and have had 59 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock gained 13.1% on the news that the company reported mixed third-quarter financial results, where a revenue beat and a positive outlook seemed to outweigh a wider-than-expected loss. The natural food company posted an adjusted loss of eight cents per share, which missed analyst expectations for a five-cent loss. However, quarterly sales of $367.9 million came in ahead of the $360.5 million Wall Street had anticipated, even though sales declined by 6.8% compared to the previous year. Despite the earnings miss, management provided an encouraging outlook. The company noted it was seeing benefits from cost discipline and pricing actions. Furthermore, Hain Celestial expected stronger revenue and profit in the second half of its fiscal year and anticipated generating positive free cash flow for the full year, which appeared to boost investor confidence.
Hain Celestial is down 77.6% since the beginning of the year, and at $1.35 per share, it is trading 84.4% below its 52-week high of $8.63 from December 2024. Investors who bought $1,000 worth of Hain Celestial’s shares 5 years ago would now be looking at an investment worth $35.76.
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