Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
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| So we feel really good that we'll have new news for Garden Veggie to add to the core news as we drive really good shelf assortments in all the potential points of distributions |
| We feel good about the distribution that we have across all of the club outlets |
| I'm pleased to report our first quarter results that deliver our second consecutive quarter of Promises Made, Promises Kept |
| Organic net sales were in line with our guidance of down low single digit, and adjusted EBITDA came in ahead of our expectations |
| So you wouldn't really expect to see a lot of tea growth at this particular point in time, but actually Celestial's done really nice |
| We now have better visibility into our innovation pipeline across our key categories and are excited about our innovation experience center that we are building out at our new global headquarters location in Hoboken, New Jersey |
| We're growing in private label faster than we're growing in the branded business to recover, but the team's well positioned to have that in that marketplace |
| We are making notable progress in away-from-home channels like convenience, colleges and universities, and the travel segment, which are margins accretive portfolio and provide expanded brand visibility |
| I mean, we're making good progress in the payables area |
| So I feel like we will have some good news to share with you in the coming quarters |
| And recent distribution gains support our confidence in our ability to grow share as we progress throughout the year |
| And I feel really good seeing the early momentum that the team's driving in the points of distribution that they've gained in away-from-home |
| I feel very good that the team that we've put in place around away-from-home, both in the UK business and the team here in the US, I feel really good about the revenue growth management work that the team's done for what it will take with our portfolio to be well positioned to drive that distribution |
| In better-for-you baby & kids, Earth’s Best continues to demonstrate robust growth of 12% in dollars in the last 12 weeks, excluding formula, supported by strong retailer partnerships and share gains in baby food and purees |
| Innovation in snacks and our investment in the brand building campaign Good Food Made Fun are helping drive Earth’s Best snacks up low single digits in dollars and a 20% expansion at total distribution points |
| Those are areas where we would see great opportunity |
| Our brand building investments are delivering us clients with the successful Magic in Your Mug campaign launched in the back half of fiscal 2023, and we have strong customer acceptance confirmed on innovation, including Sleepytime melatonin and throat cooler |
| Our International non-dairy beverage segment continues to gain momentum, building upon positive performance in June and growing 10.6% in the first quarter |
| So seeing that consumer recovery in category and the growth of natural products outpacing conventional also gives us confidence as we go forward that we're well placed and we'll continue to monitor our pricing versus both other players and categories to ensure that we're covering inflation but we're not passing too much on to the consumer |
| We, as we said earlier this year, we felt really good about the revenue growth management initiatives that have been put in place and that most of the, I call it may be blunt force instrument around pricing, most of those large broad price actions had already been, had already taken place between International and North America |
| As we mentioned on Investor Day, we believe our portfolio combination of strong brands and private label in this category is an advantage for Hain across Europe |
| We have made good progress on a number of revenue growth management initiatives, ranging from pricing to trade efficiency in the mix |
| You are instrumental in delivering on our strategy, but more importantly our purpose in inspiring healthier living and I am proud to work alongside you |
| We are well positioned and see strong growth within discounters and private label internationally as the consumer responds to the macro environment |
| Our private label jams and spreads are both up double digits, gaining share in the latest 12 weeks |
| In better-for-you beverages, Celestial Seasonings bagged tea grew 1.3% in dollars in the latest 12 weeks, with both dollar and unit velocity pacing ahead of the category, and we gained share across both herbal and wellness segments |
| Also in the meal prep category, our soup brands continue to perform well, of 15% in dollars in the last 12 weeks, gaining 200 basis points of share |
| But we've had very strong retailer receptivity to it and the consumer research has been incredibly positive |
| And as we mentioned in our opening remarks, we have some very strong innovation coming in quarter three that's actually had really great acceptance from our retail environment |
| We are also seeing encouraging signs of stabilization in our global meat-free category |
| Statement |
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| Organic net sales decreased by 9.3% versus the prior year period due to a sales decline in baby & kids, which as we mentioned last quarter, is a function of continued industry-wide challenges in organic formula supply |
| And now to our outlook, while a number of the top nine headwinds we faced in the first quarter were isolated to the period, the industry-wide challenges in organic baby formula supply will continue to adversely affect our sales volume in the near term |
| As anticipated, first quarter consolidated net sales decreased 3.3% versus the prior period to $425 million |
| In North America, reported net sales decreased 9.8% to $260.1 million in the first quarter |
| On our last earnings call, we described headlines that we expected to face in the first quarter, the largest being baby formula, but the entire industry has experienced supply constraints |
| So what I'm hearing from some investors this morning is a little bit of concern that this decision to become less transparent, is not necessarily in the direction that people had hoped for, and that it becomes a little harder to analyze your financials |
| As we highlighted previously, the net sales decline in the first quarter was driven predominantly by baby & kids |
| Adjusted EBITDA in North America was $18.7 million, a 39.2% decrease versus the prior period, and adjusted EBITDA margin was 7.2%, a 350 basis point decrease from the prior year period |
| Adjusted gross margin was 20.5% in the first quarter and decreased by approximately 95 basis points versus the prior year period, driven by the leverage on lower sales volume and by cost inflation partially offset by pricing and productivity savings |
| We see that playing out as we go into the back half of the year, but I would tell you that we've tempered our expectations based on consumer response to category, the challenges around some of the geopolitical conflicts that we're seeing, especially in Ukraine and now in the Middle East, and so I think we've been appropriately prudent as we look at what the outlook is in the back half of the year |
| Organic net sales for the first quarter adjusted to exclude the effects of divestitures and discontinued brands decreased 2.9% versus the prior year period, consistent with our guidance of a low single digit decline |
| First quarter adjusted gross margin in North America was 20.8%, a 190 basis point decrease versus the prior period that was driven by a deleverage on lower sales volume and cost inflation, partially offset by pricing and productivity savings |
| The challenges around formula, obviously, we outlined for quarter one |
| These year-over-year declines resulted from lower gross profits and margin on roughly flat SG&A spending |
| Going into Q2, we do see a continued drag on formula, probably around $10 million on the revenue side but then pivoting back as we go through the balance of the year |
| While we are working closely with industry partners to accelerate availability and bring on additional supply, we are now expecting these challenges in supply to continue into the second quarter, and to begin to recover sometime in the second half of the year |
| The decrease was primarily due to lower sales in the North American segment partially offset by sales growth in the International segment, as expected |
| Those are, however, offset by the challenges we see in the marketplace |
| On the formula side in our baby kids category, all of the decline in the baby category was driven by formula |
| All of these factors combine to produce a net loss for the quarter of $10.4 million, or $0.12 per diluted share, compared to net income of $6.9 million, or $0.08 per diluted share in the prior year period |
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