HAIN Q2 Deep Dive: Cost Restructuring and Portfolio Streamlining Dominate Turnaround Plan

September 16, 2025 at 17:00 PM EDT

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Natural food company Hain Celestial (NASDAQ: HAIN) missed Wall Street’s revenue expectations in Q2 CY2025, with sales falling 13.2% year on year to $363.3 million. Its non-GAAP loss of $0.02 per share was significantly below analysts’ consensus estimates.

Is now the time to buy HAIN? Find out in our full research report (it’s free).

Hain Celestial (HAIN) Q2 CY2025 Highlights:

Revenue: $363.3 million vs analyst estimates of $371.9 million (13.2% year-on-year decline, 2.3% miss)
Adjusted EPS: -$0.02 vs analyst estimates of $0.03 (significant miss)
Adjusted EBITDA: $19.91 million vs analyst estimates of $27.72 million (5.5% margin, 28.2% miss)
Operating Margin: 1.5%, down from 5.5% in the same quarter last year
Organic Revenue fell 11% year on year vs analyst estimates of 7.3% declines (365.7 basis point miss)
Market Capitalization: $146.3 million

StockStory’s Take

Hain Celestial’s second quarter results were met with a pronounced negative market reaction, driven by underperformance relative to Wall Street expectations. Management pointed to shortfalls across both North America and international segments, with velocity challenges and distribution losses in snacks, as well as softness in international categories like wet baby food and soup. Interim CEO Alison Lewis described the performance as “disappointing” and acknowledged that previous leadership’s focus on building structure had “inflated our cost structure and slowed down decision-making,” leading to reduced profitability. The company’s self-critical tone reflected urgent efforts to address these issues through immediate cost actions and a shift to a leaner regional operating model.

Looking ahead, Hain Celestial’s strategic priorities center on aggressive cost reduction, portfolio simplification, and reinvigorated innovation to stabilize sales and improve profitability. Management believes executing its five-point turnaround plan—including streamlining SKUs, accelerating brand renovation, and enhancing digital capabilities—will drive stronger performance, particularly in the second half of the year. CFO Lee Boyce noted, “We expect aggressive cost cutting and execution against our five actions to win in the marketplace to drive stronger top and bottom line performance in the second half of the year.” The company remains focused on generating positive free cash flow and reducing leverage through disciplined inventory management and ongoing restructuring.

Key Insights from Management’s Remarks

Management attributed the underperformance to operational complexity, limited pricing actions, and slow innovation, while highlighting decisive moves to simplify operations and focus on profitable growth.

Operating model overhaul: Hain Celestial is transitioning from a global to a leaner regional structure, eliminating layers of management and empowering local teams to accelerate decision-making and better align with consumer needs.
Cost reduction initiatives: The company committed to an incremental 12% reduction in people-related SG&A expenses and increased the scope of its restructuring program, aiming for faster financial flexibility and margin improvement.
Portfolio rationalization: Hain is exiting unprofitable or low-margin SKUs, including the discontinuation of the Yves product line and closure of its manufacturing facility, to concentrate resources on higher-growth, higher-margin brands.
Brand renovation and innovation: Management is prioritizing new product launches and renovations, such as revamping Garden Veggie snacks with cleaner ingredients and introducing new formats like Hartley’s Juicy Jelly pouches, to restore category momentum.
Revenue growth management: The company is implementing disciplined pricing and price-pack architecture across its portfolio, with recent pricing actions in tea, baby, and meal prep categories to offset inflation and enhance returns on promotional spend.

Drivers of Future Performance

Management expects that cost discipline, portfolio simplification, and improved innovation will be key to stabilizing sales and driving margin recovery in the coming quarters.

Cost structure reset: Hain Celestial’s restructuring efforts are designed to produce full run-rate SG&A savings by year-end, with additional productivity gains expected to supplement margin recovery. Management sees these savings as critical to funding reinvestment in brands and innovation.
Innovation pipeline expansion: With two dedicated innovation hubs and a broader product pipeline, the company is increasing the pace of new launches and renovations—especially in snacks, yogurts, and beverages—to address consumer demand and regain lost distribution.
E-commerce and digital focus: Management is accelerating digital and e-commerce investments, targeting above-category growth rates by improving assortment, marketing return on ad spend, and online share, particularly in the U.K. and North America.

Catalysts in Upcoming Quarters

In the upcoming quarters, the StockStory team will watch (1) the pace at which Hain Celestial executes its cost reductions and restructuring, (2) early signs of regained traction in snacks and other key categories from innovation and marketing efforts, and (3) progress on portfolio simplification and divestiture of non-core assets. Sustained improvements in digital and e-commerce performance will also be important markers for tracking management’s turnaround execution.

Hain Celestial currently trades at $1.50, down from $2.16 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).

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