Natural and organic food distributor Hain Celestial Group, Inc. (HAIN), Tuesday revealed a drop in profit for the fourth quarter from a year ago, primarily due to a decline in gross margin as well as one-time charges. Quarterly revenues also declined from the same quarter last year, below Street estimates. Looking ahead, the company also provided its forecast for the year 2010, expected to come in below current street estimates.
Melville, New York-based Hain Celestial Group's quarterly net profit declined to $1.265 million or $0.03 per share from $6.504 million or $0.16 per share in the corresponding quarter last year.
On an adjusted basis, quarterly non-GAAP net income declined to $11.320 million or $0.28 per share from $14.000 million or $0.34 per share in the same quarter last year, below analysts ' expectations.
On average, nine analysts polled by Thomson financial expected the company to earn $0.30 per share for the quarter. Analysts' estimate typically excludes special items.
Revenues for the fourth quarter dropped to $262.705 million from $278.261 million in the comparable quarter last year, below Street estimates of $287.43 million. Quarterly revenues, however, was negatively impacted by foreign exchange rates.
The company reported an operating loss of $3.352 million, compared to operating income of $11.758 million in the same quarter last year, as gross margin for the quarter declined to 19.4% from 24.3% in the same quarter last year, impacted principally by charges from the SKU Rationalization and HPP.
The company also restarted consumption growth in tea as it increased its focus on selling core Stock Keeping Units or SKUs and also initiated an SKU program at its Celestial Seasonings, after SKU rationalizations in grocery, snacks and personal care. The company also concluded the consolidation of its personal care operations and distribution centers. Owing to such actions, Hain Celestial recorded fourth-quarter pre-tax charges of $7.8 million, or $0.12 per share, which also included a charge of $7.1 million as cost of sales for inventory and related items and a charge of $0.7 million as general and administrative expenses for severance and other costs.
For the full year, the company slipped to a loss of $24.723 million or $0.61 per share from a profit of $41.221 million or $0.99 per share in the same quarter last year. The Street expected earnings of $1.26 per share for the full year.
Revenues for the period, however, increased to $1.135 billion from $1.056 billion last year. Analysts anticipated revenues of $1.16 billion for the year.
Looking forward to the year 2010, the company expects earnings in the range of $1.19 to $1.28 per share. Revenues for the year are expected in the range of $1.010 billion to $1.030 billion, an increase in the range of 4% to 6% of fiscal year 2009 sales base, less sales of HPP and items discontinued in the SKU rationalization.
The Street currently expects the Hain Celestial to report earnings of $1.36 per share on revenues of $1.22 billion.
HAIN closed Tuesday's trading at $18.00, down $0.23 or 1.26%, on a volume of 0.459 million shares on the Nasdaq. In the after hours, the stock lost $0.15 or 0.825 to trade at 18.08.
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